Top 10 Scams Targeting Seniors That You Need to Watch Out For

Retirees Should Watch Out for Scams

Scams targeting seniors have grown significantly over the years.

“It is imperative that we detect and prevent senior financial fraud before criminals, who prey on our most vulnerable citizens, steal from and devastate them,” said Mike Rothman, president of the North American Securities Administrators Association (NASAA).

Some 29% of members say their agency has seen an increase in senior fraud cases and almost none have seen a decrease in complaints.

The greatest generation is a reference to those who grew up in the U.S. during the deprivation of the Great Depression and then went on to fight in World War II.

Trust cautiously…

“We’ve discovered from the last 15 months that it’s not only a matter of retirees being targeted by a particular scammer but being taken advantage of by turning their trusting nature against them,” said Joseph Berg, director of the Alabama Securities Commission. “To most of the ‘greatest generation,’ someone’s word was their bond.”

Common Scams Targeting Seniors Statistics

Here are several statistics on scams targeting the elderly population in the U.S. according to the Federal Trade Commission Report 2023.

• Bank transfers and cryptocurrency were the payment methods with the highest losses among older adults, while credit cards and gift cards were the most frequently used methods in reported scams​.
• Text scams targeting older adults saw increasing losses from $90 million in 2022 to $130 million in 2023, mostly through messages impersonating well-known businesses.
• Older adults reported $311 million in losses to business impersonation, $254 million to government impersonation, and $36 million to friend and family impersonation scams in 2023.
• Among those 80 and over, the median reported loss was $1,450, much higher than for younger adults in 2023.

Top Fraud Types Reported by Elderly to FBI in 2023

The following graph highlights the top reported elder fraud types in 2023, organized by the number of complaints received to the FBI.gov Internet Crime Complaint Center (or IC3).

Seniors’ Attitudes Toward Scams

Despite the real threat of harm, most seniors don’t feel threatened by scams. 

In a sample conducted by Retirement Living staff among seniors 65+ during September 2017, 52.24% of respondents answered “no” to the question “Are you worried about being scammed or taken advantage of financially?”

Not surprisingly, those who had personally been impacted by a financial scam were more than four times more likely (81%) to be worried about being scammed again compared to those who had not (19%).

But most interestingly, those who reportedly knew someone who had been scammed were much less likely to feel worried themselves. 

Our explanation for this inverse knowledge-fear relationship may have to do with confidence level after learning about scams, a byproduct of learning about the unknown.

So in response and to raise awareness, we have identified the top 10 scams that plague senior citizens in retirement, along with examples for each.

Top 10 Scams Targeting Seniors

Scam #1: Ponzi/Pyramid Schemes

In Birmingham, Alabama, a gentleman offered free tax work to a church whose members were largely 60 years and older. After he gained the trust of the congregation, he sold them shares in a pyramid, Ponzi scheme by claiming that a portion of returns would be given to the church and that without buying into his guaranteed and secure investment plan, they could outlive their savings.

In short, 

Beware of loaning friends large amounts of money in exchange for some larger future sum.

The fraudster also reportedly used scare tactics such as telling the faithful that their social security benefits would be cut off and that their healthcare costs would be too expensive for them. In some cases, ministers of certain churches have been convicted for complicity and promotion of such schemes.

“In this type of fraud it depends on the particular facts of each case whether the pastors, ministers, or elders of the church were unwillingly taken in or became part of the con later on in exchange for compensation, love offerings, or future promises,” said Berg.

According to FTC, Investment scams caused the most financial harm to older adults, with losses rising from $400 million in 2022 to $538 million in 2023.

Scam #2: International Scams

Reportedly run by a U.K. company, Profitable Sunrise instructs investors to wire money to Eastern Europe in exchange for risk-free returns of up to 2.7% per day for periods of six months to two years. 

The company’s slogan is ‘Get Richer With Every Sunrise’ however neither the principals nor the proposed investments are registered with any State or Federal authorities.

 In all 50 states, the sale of unregistered securities is illegal unless the securities fall under a specific exemption. “The promises being made by this company appear to fall into the ‘too good to be true’ category,” said Patricia Struck, administrator of the Division of Securities.

Scam #3: Fake Marriage Schemes

Older adults (60+) are 10% more likely to report losses from romance scams compared to younger adults.

Single, retired military veteran men who live in nursing homes and have no family are particularly vulnerable to romance or marriage scams, a form of elder abuse. 

Susan Hodges, a former nursing facility administrator, says she’s observed R.N.s who work in retirement homes marry these isolated, vulnerable veterans for their war pay and benefits. While the elderly veteran is living in the nursing home, Hodges alleges that their newlywed younger wives are eating off their pensions, living in their homes, and driving their cars.

In the 2023 FTC report, romance scams ranked as the third highest in reported losses for older people, with many victims reporting that their romantic partners convinced them to invest in fake cryptocurrencies.

Scam #4: Affinity Fraud

Scams that cater to a certain ethnic group such as Latinos, can strike any region of the country. These scams have also infiltrated fraternal organizations such as Kiwanis Clubs and Lions Clubs. 

This fraud occurs when a con artist manipulates the close relationship that one individual, such as a retired military veteran, has with another of the same group and uses that familiarity and trust to promote and sell unsuitable or fraudulent investment products.

Scam #5: Foreign Currency Swindle

The Securities and Exchange Commission (SEC) charged a Cache County, Utah man for soliciting investors in a fraudulent scheme involving investments in top secret Iraqi currency and oil contracts. John Scott Clark pled guilty to bank fraud, money laundering, and illegal gambling.

Lesson learned
Beware of get-rich-quick currency schemes.

“These con artists are telling aging retirees that they can buy the Iraqi dinar for pennies and that it is ‘imminent’ that the dinar will be on par with the U.S. dollar and that they should load up now to earn a ton of money,” said Berg.

In the process, victims pay commissions, exchange fees, or arbitrage fees to the seller.

Scam #6: Real Estate Scams

After a natural disaster, fraudulent promoters typically come along trying to sell damaged buildings or land lots allegedly available at rock bottom prices and that can be rehabbed or re-developed.

 Too often after the retiree has invested $5,000, $10,000, their entire savings or retirement account, it’s revealed that 46 others are on that mortgage list, which renders it worthless or in many cases, the mortgage or land title doesn’t even exist. 

The elder generation tends to fall for fraudulent real estate scams due to the tangibility of land.

Scam #7: Securities Fraud

An 86-year-old retired U.S. Air Force pilot and a 91-year-old retired World War II U.S. Navy veteran lost several hundred thousand dollars in a bogus investment opportunity offered by an attorney. 

An Alabama Securities Commission investigation revealed that both veterans were offered promissory notes in exchange for their money which was to be invested in real estate and medical technology ventures with an 8% to 12% return on their investments to be paid at a specified time.

Remember this

“As long as there’s money around, there will be thieves”

“The first line of defense is for the investor to determine whether the offer is too good to be true.” The defendant pled guilty to three counts of securities fraud, was sentenced to 20 years imprisonment, split to serve five years in the state penitentiary, and ordered to pay more than $4 million in restitution to multiple victims.

Scam #8: Guardianship Abuse

Some 11 years ago, Hodges admitted three new residents who were different than others who lived at the nursing home where she worked. The seasoned administrator discovered they were wards of the state of Texas whose assets were under the control of a guardianship company after a Tarrant County Probate Judge deemed them incompetent.

“One lady told me the Court had stolen more than a million dollars from her bank account,” said Hodges. Since 2006, the licensed nursing facility administrator has noticed a rising number of the elderly enduring the same fate. “It seemed that the Court and the lawyers were complicit in the fraud,” said Hodges who is no longer working at a nursing facility but is instead working as a consultant and wrote a book about guardianship abuse called A Breach of Trust.

Scam #9: High Yield Prime Bank Accounts

Using complicated and reportedly phony documents, this scam promises retirees that they can participate in high-yield prime bank investments connected to secretive accounts only available to ultra-high-net-worth families at Swiss, French, English, or other overseas banks. 

Although prime bank accounts don’t exist, seniors aren’t often unaware of that fact. “It all sounds good at the point of purchase but promising a retiree that they will be able to invest and enjoy “no risk no loss” returns in the same ballpark as an ultra-millionaire is a scam,” said Berg.

Scam #10: Funeral Scams

Criminals use funerals to carry out imposter scams targeting older Americans, scamming them out of money, and committing identity theft. 

Examples include scammers attending funerals to claim that the deceased owed them money, and then pressuring the deceased’s relatives to pay off the alleged debt.

Caution ahead
Scammers are getting more sophisticated.

Additionally, scammers use funeral notices to steal identities by emailing fake funeral notifications using real funeral home logos. These emails contain an attachment asking the recipient to open the attachment to see the funeral details. 

The victim triggers malware with no antivirus protection by opening the attachment, which enables the identity thieves to acquire personal information.

Other Popular Senior Scams to Know:

• Grandparent Scam: A fraudster phone calls an older adult and impersonates a grandchild or a family member in distress. The caller claims to be in urgent trouble—such as being in jail, needing medical assistance, or facing an emergency abroad.
• Medicare scam: Older adults who qualify for Medicare often fall victim to fake Medicare representatives who manipulate them with fake service packages to extract sensitive financial information. 
• Tech Support Scams: Older adults were five times more likely than younger adults to report losing money via tech support scams in 2023. These scams led to $175 million in losses, marking a 10% increase from the previous year.
• Lottery Scams: For adults over the age of 80, prizes, sweepstakes, and lottery scams represented the costliest type of fraud, with reported losses totaling about $48 million in 2023​.
• Government agency scams: Government impersonation scams rose sharply among older adults, with losses increasing by 39% in 2023. The most frequent scams involved impersonations of the Social Security Administration, Internal Revenue Service, and the FTC.
• Voice Phishing: Imposters fake caller IDs to appear as loved ones or trusted organizations, using fear tactics via text messages or phone calls to extract sensitive information from seniors.

Stay Vigilant

If you think you’ve been targeted by a scammer, you should contact local police or law enforcement. You can also contact the AARP’s ElderWatch hotline at 1-800-222-4444 (option 2) or go to www.aarpelderwatch.org.

For fraud prevention, consider buying from the identity theft protection service providers.

Bottom Line

Elder fraud is a big concern in America, causing a billion-dollar loss each year. In 2023, reported losses reached $1.9 billion, with actual losses estimated at $61.5 billion, according to FTC. Scam artists exploit older people’s trust and social isolation, with investment scams proving most financially damaging. Key risk factors include bank wire transfers, cryptocurrency, and underestimating potential threats. 

Recognizing the types of scams, especially online scams like social media apps, telemarketing via robocalls, or involving Social Security numbers, is crucial for finding warning signs. By staying informed and vigilant, you can better protect yourself against financial fraud.

To stay up to date on news for retirees and seniors, join our Retirement Living Newsletter.

Fair Use Statement

If you’d like to share our findings with other businesses or for any other non-commercial purpose, please include a link to this research by RetirementLiving.com.

Sources

1. "Seniors at Risk of Financial Fraud." North American Securities Administrators Association, Evaluated on Nov. 6, 2024.
   Link Here
2. "Elder Fraud in Focus." FBI, Evaluated on Nov. 6, 2024.
   Link Here
3. "Consumer Sentinel Network Data Book 2023." Federal Trade Commission, Evaluated on Nov. 6, 2024.
   Link Here
4. "Financial Fraud and Cognitive Function: Correlates of Susceptibility in Older Adults." PMC, Evaluated on Nov. 6, 2024.
   Link Here
5. "Top 5 Financial Scams Targeting Older Adults." National Council on Aging, Evaluated on Nov. 6, 2024.
   Link Here
6. "Protecting Older Consumers: 2023-2024 Report." Federal Trade Commission, Evaluated on Nov. 6, 2024.
   Link Here