Protecting Your Money: Fraud Prevention Tips for Older Adults

Older adults are being targeted by fraud at alarming rates, and the losses are climbing fast. 

According to the Federal Trade Commission (FTC), fraud losses reported by adults aged 60 and over increased from approximately $600 million in 2020 to $2.4 billion in 2024¹. Two common forms of financial harm drive these losses: financial abuse and financial exploitation fraud.
 

Financial Abuse

Often times, older adults become targets of financial abuse due to their income, the amount of savings they have accumulated through the years, and the likelihood they may have declining cognitive or physical abilities. 

In some cases, older adults may have limited contact with family and friends, are unfamiliar or uncomfortable with technology, or rely on others for advice on how to manage their finances. As a result, they fall victim to investment scams, romance scams, and impersonations of other individuals or organizations. 

When financial abuse happens to an older adult, the perpetrator is usually someone who is close to the victim. This can be a family member, neighbor, caregiver, or a friend or acquaintance. The criminals use charm, persuasion, threats, or even prey on social isolation or loneliness to convince victims to part ways with their money. 

Many of the financial abuse incidents are not reported to authorities because the victim may be in fear of harm happening to their well-being, embarrassment that the situation occurred, or they simply do not know what to do.
 

Financial Exploitation Fraud

Each year, older adults in this country fall victim to financial abuse, costing seniors an estimated $27 billion² in financial losses.

Financial exploitation occurs when money, property, or assets are stolen. Financial fraud, which is usually committed by a stranger, is typically the result of a scam.
 

Five Types of Financial Exploitation Scams:

Government Imposter Scams - Scammers frequently pose as representatives from U.S. government agencies that are well-known and provide services to older adults, such as the Social Security Administration (SSA), Medicare or Medicaid, and the Internal Revenue Service (IRS). These imposters may threaten the older adult with penalties such as arrest, fines, or seizure of their bank accounts for crimes supposedly committed.
 

Investment Scams - Scammers will pose as professionals offering financial or retirement planning services. They may reach out to develop a relationship using social media platforms or mail invitations to high-end dinners to pitch unsuitable or fraudulent investment products, promising high guaranteed returns from, for example, cryptocurrency or foreign companies.
 

Romance Scams - Scammers will create fake profiles on online dating sites to establish a close or romantic relationship with older adults to later exploit their confidence and trust. They will ask the older adult to send money for travel expenses so that they can meet in person, though they almost never do, to help with a sudden “hardship” such as a medical emergency or legal fees, or as part of an investment or business deal. This type of scam can continue much longer than typical scams, and it’s often difficult for older adults to accept that they are victims of a scam.
 

Grandparent / Emergency / Person-in-need Scam - Scammers will impersonate an older adult’s loved ones or some other official such as an attorney, medical professional, or law enforcement officer, to convince the victim that their loved one is in an emergency situation and needs funds sent immediately to resolve the situation.
 

Lottery / Sweepstakes Scams - Victims are contacted by a scammer claiming that they have won a lottery, prize or sweepstakes, despite not previously playing the lottery or entering a sweepstakes. The scammer will request payment to cover taxes, shipping, or other fees in order for the victim to claim their prize. Victims never receive the prize and are often re-victimized until they run out of money.
 

Steps for Preventing Financial Fraud

Credit Card and Bank Account - Closely monitor bank account activity and statements to look for unauthorized or suspicious transactions. Keep your contact information current so your financial institution can alert you if they detect unusual activity.  Immediately initiate contact with your financial institution if you identify or are alerted to unauthorized or suspicious transactions
 

Personal and Financial Information - Be very cautious when sharing personal or financial account information.  Never enter personal information, such as your Social Security number, or financial account information, such as a personal identification number (PIN) or account login ID or password, unless you initiated contact with a legitimate website or phone number.  A financial institution employee should not ask you to provide them with your PIN or account login credentials.
 

Powers of Attorney - Be careful when selecting someone to be a power of attorney and exercise caution if someone offers to serve as your power of attorney. This representative will have legal authorization to transact business on your behalf.
 

Credit Report - Check to make sure all of the information on your credit report is accurate and complete. Check to see if companies you don’t recognize have obtained your credit report and contact the credit-reporting agency if you see anything suspicious. Consider contacting the credit reporting agencies to place a security freeze to prevent creditors from accessing your credit report and thus preventing someone impersonating you from obtaining credit.
 

Be Patient - When it comes to making a major financial decision or investment, make sure you understand what’s happening and ask questions. Using a known lawyer or financial advisor to help understand the documents and discuss what is in your best interest is a good safe step to take. 
 

Additional Information

American Bankers Association (ABA) offers a Safe Banking for Seniors program designed to help protect older adults from fraud and financial exploitation. The ABA also provides the Banks Never Ask That fraud prevention resource.

Consumer Financial Protection Bureau
Office for Older Americans
855-411-2372
[email protected]
www.consumerfinance.gov/practitioner-resources/resources-for-older-adults

Report Elder Financial Exploitation 
To report older adult fraud abuse or financial exploitation, contact the National Elder Fraud Hotline at 833-FRAUD-11 (833-372-8311).