Louise was taken aback when she saw a bunch of cheap candles on her 98-year-old grandma’s table. Her grandma had bought them thinking she was supporting a charity she regularly donated to. But a quick internet search revealed the charity was a scam. This is just one of many scams that prey on the elderly. The U.S. Securities and Exchange Commission estimates that about 5 million seniors fall victim to fraud or financial abuse each year, losing a staggering $12.48 billion annually according to a 2015 report by True Link Financial.
Why are seniors targeted? Well, the Federal Bureau of Investigation points out several reasons. Firstly, seniors often have more money. They’ve had a lifetime to save and are more likely to own their homes outright. In fact, a 2017 Federal Reserve study found that the average net worth of American households headed by someone aged 65 and older is $1.067 million, 1.5 times higher than the average for all households.
However, not all seniors are wealthy. A 2018 Kaiser Family Foundation report found that 14% of all seniors live in poverty. Scams targeting the elderly often ensnare those living on fixed incomes who can ill afford the financial loss.
Secondly, seniors are often more trusting. Many are lonely, their children having moved out and their friends passing away or moving into nursing homes. This makes them prime targets for telephone scammers who can easily form a bond with them and gain their trust. Older people are often more inclined to trust strangers, making them less likely to interrupt a sales pitch or hang up on a scammer.
Thirdly, seniors often have memory problems. A 2018 report from the Federal Trade Commission found that senior citizens are more likely to report scams than younger people. However, scammers know that even if their elderly victims report the crime, there’s a good chance they won’t remember the details. This is because memory and cognitive function often decline with age, making it difficult for older victims to provide investigators with the details they need to find the criminals.
Some scams specifically target seniors known to suffer from memory loss. For instance, True Link Financial outlines a scam where victims receive three free issues of a popular magazine, followed by a bill for the "subscription" they never requested. Another scam involves calling up seniors to request donations to real charities, except the fraudsters call several times over the course of one day, counting on the victim to forget about the earlier calls. They then pass on 10% of the money collected to the charity and pocket the rest.
Many health scams also target seniors because they’re more likely to suffer from specific health problems. This makes them prime targets for fake remedies promising to treat or prevent cancer, improve cognitive function, reverse visible signs of aging, and more. Older adults are also vulnerable to scams related to Social Security or Medicare, fake investments for retirement income, and cons that prey on the recently widowed.
There are many common scams that target seniors, including Social Security scams, Medicare scams, counterfeit prescription drugs, fake anti-aging products, funeral fraud, phone scams, internet scams, investment scams, reverse mortgage scams, lottery or sweepstakes scams, grandparent scams, and charity scams.
The best defense against these scams is awareness and vigilance. Seniors should be suspicious of unsolicited contact, protect their personal information, read the fine print, do their homework on new companies, take their time making financial decisions, talk over large investments with someone they trust, avoid paying in advance for any service, use traceable payments, and report scams. If you have older relatives, you can help protect them by staying informed, helping them unlist their phone number and cut out junk mail, checking their credit reports, explaining scams to them, using reverse psychology, not blaming them if they fall victim to a scam, helping them share their experiences to help others, and monitoring their accounts.
