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You may think you’ve read this story before. Perhaps you have. But it bears repeating because billions of dollars are at stake. And some of those dollars are yours!
In 2023, adults aged 60 and over worldwide lost $3.4 billion to fraud, according to FBI reports. We are not talking about mischievous basement-dwelling coders. Defrauding elders is big business, it’s growing quickly, it’s international, and it’s constantly innovating with AI and other tools to take advantage of the trusting.
One new scam, the FBI reported in July, is a complex scheme called the Phantom Hacker Scam that already has robbed more than $1 billion from older Americans over the past 18 months. It starts with a text, phone call, or email from a “tech support” person purporting to be from Google, Apple, Microsoft, or another known company, who tells the unsuspecting victim there’s a problem with her account and asks her to download “helpful” software – which gives the scammer remote access to the victim’s computer. Then the “tech” asks the victim to open her online financial accounts so he can “determine whether there have been any unauthorized charges.” This lets the scammer see which accounts will be most lucrative. The “tech” tells the victim to expect a call from the bank’s fraud department with further instructions.
In step two, the “bank representative” calls and tells the victim her funds have been accessed by a foreign hacker, and she must transfer her funds to a safe third-party account by wire transfer, cash, or cryptocurrency. If she complies, voila! Her valuable nest egg has just been transferred overseas to thieves.
A spokesperson for a Cybersecurity firm says victims rarely get their Money back, even after reporting the crime to authorities. Victims with the best chance of recovering some funds are those who report the scam on the same day it occurs.
If this were the only scam out there, it would be bad enough. But it’s only one of many schemes aimed at older adults, who make promising targets because they are likely (1) to have sizeable assets and (2) to be less savvy about online Technology.
Maybe you know better. But do your parents? Does dear Aunt Marcy, who may be experiencing cognitive decline?
J.P. Morgan Wealth Management has produced a useful publication on this topic called Supporting Aging Parents: A Guide to Financial Planning and Preventing Senior Exploitation. (You can download it from the link above.) In addition to presenting solid steps to prevent elder fraud, it highlights other common fraud schemes:
Grandparent – Using AI, scammers impersonate a relative who claims they need money immediately to solve a personal crisis. (This scheme was dramatized in the hit movie Thelma.)
Investment – scammers promise a high return investment with minimal risk.
Tech support – a variant on the Phantom Hacker Scam, this one begins with pop-up messages saying the computer is infected. Call the telephone number on the pop-up, and a scammer promises to fix the problem remotely by installing software (which he uses to steal personal information). Note: I fell for this when I was younger and more naïve.
Phishing – impersonating banks or government agencies, scammers ask for personal information, passwords, or financial details. Sophisticated AI is making the phonies harder to detect.
Romance – scammers pose as potential romantic partners on social media or Dating websites. Eventually they ask for money.
“It’s a heartbreaking fact that scams have wiped out people’s retirement savings,” said Lois Greisman, associate director of the Marketing Practices Division at the Federal Trade Commission (FTC). Her advice is to determine the identity of the person you are dealing with. “Never panic or react quickly. Contact them at a number you know is real to verify.”
You can report scams online to the FTC and/or to the National Elder Fraud Hotline.
Here are other helpful sources of information to help you recognize scams and prevent them.
The Elder Justice Initiative at the U.S. Department of Justice has detailed warnings about scammers impersonating IRS and Social Security employees.
Consumer Financial Protection Bureau – information to help prevent, recognize, and report fraud, plus guidance on identity theft and protection strategies.
U.S. Securities and Exchange Commission – useful tools and information to help protect investments and stay informed on potential scams.
National Adult Protective Services Association – information on recognizing and reporting financial exploitation and stopping elder mistreatment.
You’ve worked hard for your money. Don’t let an international criminal conspiracy deceive you or your loved ones into letting it disappear without a trace.
