Financial fraud is the fastest-growing form of elder abuse. Broadly defined, financial elder abuse is when someone illegally or improperly uses a vulnerable senior's money or other property. Most states now have laws that make elder financial abuse a crime and provide ways to help seniors who are victims of fraud and punish scammers.
You can protect yourself or your loved ones from elder fraud and financial abuse by becoming familiar with the most common scams and learning what to do if you suspect foul play.
Scammers target people they perceive to be vulnerable. Their victims are most often seniors who are:
Scam artists often pose as trustworthy helpers. They can be strangers, like telemarketers and tradespeople, or have a relationship with the targeted victim, such as:
Family members who commit financial abuse of an elderly relative often have money troubles. The abuser might also be struggling with any of the following:
Elder fraud abuse scammers can be tough to catch. Many scammers have paperwork that appears to give them legal authority to act, including any of the following:
Some scammers work at a bank or other financial institution and have intricate ways of hiding their tracks by manipulating electronic records and such.
Financial scams perpetrated against older people include a broad range of conduct. Elder fraud could involve any or all of the following:
Elder fraud scams can take a variety of forms. Keep an eye out for these common scams.
Catfishing is when someone steals from a person that they've "met" online. Today, many seniors turn to online services and social media to make romantic or friendly connections. However, some alleged suitors or friends are really just people hanging around the web waiting to prey on elderly people who are lonely.
These scammers often try to endear themselves to the elderly person—and then ask them for money to help with an emergency like:
Most often, catfishing scammers will never meet the elderly person and are actually located someplace other than where they claim to be.
The U.S. Department of Justice estimates that dishonest telemarketers take in an estimated $40 billion each year, bilking one in six American consumers. And the AARP claims that about 80% of the victims are 50 or older. Scammers use the phone to commit several types of elder fraud, such as:
Another form of this senior citizen fraud is when scammers use the phone to sell seniors goods that either never arrive or are worthless junk.
Phishing is when a criminal uses fake emails, calls, or texts to steal a victim's personal information. In one common phishing scam, an elderly person will receive an email that says it's from the person's bank or investment account and that the senior needs to update their information.
These emails can include bank logos and other information that makes them appear genuine. But this is really just a ploy to get the victim's login and account information and steal their identity.
Scammers contact elderly people by phone and claim that the victim's Social Security number has been suspended due to suspicious activity. The scammers then ask the victim to confirm their number or risk the possibility that the number will be seized.
Social Security scammers are sophisticated and might use caller ID spoofing to make it look like they're actually calling from the Social Security Administration—or, at the very least, to hide their phone numbers.
Some older people are slow to embrace new technology, which is why they're sometimes targeted in internet scams. Seniors might download a fake anti-virus program—or a virus—by clicking on pop-up windows. These downloads allow scammers to extract personal information about the senior.
Many scammers cloak their actions in legal authority, obtaining legal documents, such as:
They get seniors to sign these documents by lying to them or by threatening or intimidating their victims.
Another form of elder fraud involves scammers sending deceptive text messages to the victim in an attempt to get the senior to provide their personal or financial information. For example, the scammer might promise a prize to the first 100 people who respond to the message. The scammer then uses the information to steal the elderly victim's identity or to commit fraud.
In this situation, a scammer calls the elderly person and pretends to be their grandchild. The "grandchild" will then ask for money for an unexpected financial problem like not having money for:
The scammer will plead with the grandparent not to tell their parent about the call.
Many seniors have been duped into parting with their homes or other property because a scammer convinces them it's for their own good. In one infamous case, three officials from the Detroit-based Guardian Inc. were found guilty of embezzlement and fraud after selling a client's house for $500—to the mother of a company officer. The company also collected excessive fees from its wards, sometimes as high as 70% of their Social Security checks.
Scammers inform elderly victims that they've won the lottery or sweepstakes—but then claim they need to pay taxes or other fees before the rest of the money is released. They might even send a check to the victim to make it seem more real, but the check will just bounce.
In one of these scams in Canada, the U.S. Attorney General and the Solicitor General of Canada estimated that scammers were able to steal about $1 billion a year from victims.
Typically working in teams of two or more, scammers scour neighborhoods with a high concentration of older residents or even track recent widows and widowers through obituaries and death notices. The scammers then appear on their target's doorstep, claiming to spot something in need of fixing—a hole in the roof or clogged drainpipe, for example.
The scammers demand payment upfront. Then they often claim that their initial investigation reveals a more serious problem with a more expensive solution. The "work" they do is unlicensed and often shoddy, such as applying paint to a roof to make it appear as if it has been tangibly fixed.
In a twist on this scam, one "worker" might distract the elder while another enters the house to steal money and other valuables.
Look out for certain factors that might indicate that a loved one is a likely target of financial abuse. Of course, no single sign is conclusive proof, but staying aware will help you avoid or limit the fallout if there are any problems. Any of the following should raise a red flag:
A number of individuals and groups are dedicated to investigating suspected elder fraud and finding and stopping the culprits. Here are some options for taking action.
Depending on the type and extent of financial abuse involved, giving a heads-up to the bank tellers and officers who commonly handle the senior's accounts might be enough to stop the wrongdoing. Bank employees are often in a good position to note suspicious activity, such as a sudden withdrawal of large sums of money or the use of an ATM card by an elderly person who's housebound.
The laws in most states encourage or require bank officials to report suspected elder financial abuse. And federal law requires financial institutions to file a Suspicious Activity Report with the federal government when they suspect elder financial abuse.
The Eldercare Locator at 800-677-1116 directs callers to local programs and services that help prevent elder fraud and financial abuse, though the services offered—from counseling to legal assistance—vary widely depending on the location.
The VictimConnect Resource Center at 855-484-2846 helps arrange and coordinate assistance with crimes. Services are confidential.
Adult Protective Services (APS) is the government-affiliated agency charged with investigating reports of elder fraud and financial abuse and offering assistance to victims. To find your state APS office, visit the National Center on Elder Abuse website.
The police or the local prosecutor's office will often intervene when there's good evidence that a crime is being committed.
Elder fraud—the theft or misuse of someone's money or property—is a growing problem. To protect your loved one from scammers, you must first understand that:
Understanding the most common types of scams and knowing what to watch for can help protect you or your elderly loved one from would-be thieves. Discussing the risks of elder fraud with the seniors in your family can help shield them from scammers. Learn more about helping seniors protect their finances.
To learn more about elder abuse and how to find reliable long-term care, get Long-Term Care: How to Plan & Pay For It by Joseph L. Matthews (Nolo).
Updated March 6, 2023