Financial fraud costs many older adults $100,000 or more: FTC
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For older Americans, financial fraud can be a very costly mishap.
Scams reported to the Federal Trade Commission by adults 60 and older last year reached $2.4 billion, up 26.3% from $1.9 billion in 2023 and 300% from $600 million in 2020, according to the FTC. Annual report to CongressIt was released earlier this month. The increase was driven by scams involving individual losses of $100,000 or more, accounting for $1.6 billion, or 68%, of the total.
But because most scams go unreported, the agency estimates the actual losses experienced by older adults in 2024 could be as much as $81.5 billion. Most of the money lost was due to investment scams.
These significant losses can contribute to financial insecurity at a time when many consumers are struggling to keep up with rising costs and worry about running out of money in retirement.
“This crime is not just financial,” said Kathy Stokes, director of fraud prevention programs. AARP Fraud Tracking Network. “Some people have everything taken away from them and yet they say the emotional impact is the hardest.”
Banks and lawmakers target financial fraud
Although older adults are more likely to report large losses, financial fraud against consumers of all ages is increasing over time. Last year, total losses of $12.8 billion were reported to the FTC, up from $3.4 billion in 2020. But still, underreporting means the real amount in 2024 could be much higher: up to $195.9 billion, according to the FTC report.
At the same time, financial institutions and lawmakers are paying more attention to the issue.
Many banks and other financial institutions require account holders to have a “trusted person” who can be contacted in certain situations, including when financial exploitation is suspected. The Financial Industry Regulatory Authority, or FINRA, is a trustworthy person accounts, although investors are not required to provide this.
Also pending in Congress is a proposal aimed at helping combat elder fraud. called Financial Exploitation Prevention ActThe proposed legislation, among other provisions, would allow some financial institutions to delay processing suspicious transactions that could result from financial exploitation. The House version (H.R. 2478) cleared the committee in September; The Senate bill (S. 2840) is awaiting consideration by the Banking Committee.
How do scammers find money?
As technology has evolved, criminals have taken advantage of expanded avenues to reach potential victims, such as emails, texts, social media and online advertisements.
For example, a seemingly innocent message from a stranger can turn into a relationship of trust, and when the scammer offers to put money into a large investment, the truster now sends money to an account he believes will return big profits.
“It can be really difficult to get the money back,” said Kathleen Daffan, deputy director of the FTC’s Bureau of Consumer Protection. “Scammers move very quickly to get the money and move it elsewhere, often abroad.”
Older adults are also more likely than younger adults to report losing money to tech support scams; prize, sweepstakes and sweepstakes scams; Romance scams and government impersonation scams, according to FTC report.
Still, there are ways to help elderly parents or other loved ones avoid becoming victims.
How to talk to victims: Avoid blaming
For starters, you can discuss the potential for fraud and how scammers try to find new victims.
For example, “if [a stranger] If they contact you out of the blue and it’s an emergency, that’s a really good sign that someone is trying to scam you,” Stokes said.
You can also sign up to receive consumer alerts. FTC’s website so you stay up to date on the latest scams and can share the information with others.
When it comes to a scam involving a victim who trusts the scammer, there’s a good chance their loved ones won’t know unless they notice that the person seems busy or their behavior otherwise seems off.
“I would say that if an older adult is in a relationship like that that involves trust and money, the criminals are telling them not to tell anyone,” Stokes said.
Daffan said that if the victim is asked to pay via gift card, cryptocurrency, cash, wire transfer and wire transfer, these transactions can be very difficult to reverse.
“We always advise people to immediately call the institution involved in transferring the money,” Daffan said.
“If it’s a gift card, call the card issuer. If it’s a bank, call the bank. Ask for the transaction to be suspended and ask if it’s possible to get the money back,” he said. “But we often find that this doesn’t work.”
Stokes said it’s important for the victim not to feel guilty if the fraud has already occurred and the money is irretrievably gone.
AARP recommends Talking to victims with empathy rather than mocking or blaming them.
