Five Common Elder Financial Fraud Scams – and how to prevent them

April 20, 2021 | Advice

Five Common Elder Financial Fraud Scams – and how to prevent them

Year over year, older adults find themselves victims of some type of financial fraud. All told, according to a 2019 Senate Special Committee on Aging, seniors lose an estimated $2.9 billion each year to fraud schemes.

No matter your age, many people may feel confident in their ability to spot a scam. (Who hasn’t gotten that email announcing the “Crown Prince of Astrodemus” has left you $1 million and all you need to do to claim it is share your bank information?) Despite the obviousness of some of these tactics, fraudsters are clever. Read on for more information on some of the most common elder financial fraud schemes, and how to prevent them.

1. FRAUD: Impersonating the IRS. Millions of Americans, young and old, have been targeted by scammers fraudulently representing the IRS. In many cases, criminals claim victims owe back taxes, warn of foreclosure or wage garnishment, or worse, threaten prison.

PREVENTION: Know your rights. The IRS will never:

Contact for more information on reporting IRS scams. 

2. FRAUD: Unusual bank account activity. Many older adults rely on caregivers or family members to provide for them. This support ranges from day-to-day caregiving, to companionship, to handling bills. Red flags go up when large, unexplainable withdrawals occur, new accounts are opened, or non-sufficient funds notifications arise.

PREVENTION: Begin a family conversation.

: Telemarketing scams. Bogus charity solicitations, high-pressure sales techniques, and aggressive callers can make victims feel it’s easier to say “yes” than just hang up.

PREVENTION: Don’t buy from an unfamiliar company.

Ask to be removed from telemarketers’ lists by signing up for the National Do Not Call Registry.

4. FRAUD: The grandparent con. In this scam, victims receive a call from someone impersonating a grandchild in distress who “doesn’t want their parents to know.” The grandparent scam has been around for a few years. Have you gotten a call like this? The phone rings, a scared voice asks, “Is that you, Grandpa/Grandma?” The caller identifies himself as your college age grandchild. He’s in Boise (or any other city in the world); he’s been arrested, and he needs bail money immediately. “Could you wire $5,000 immediately? Don’t tell Mom and Dad; they’ll be mad.”

PREVENTION: Trust but verify!

 5. FRAUD: The romance scam. You’re lonely and go on a dating site to meet someone. Soon, a connection blossoms, and with that comes requests for money for travel, hotels, visas, and more.

PREVENTION: Talk to someone you trust.

If you think it’s a scam, report it to the Federal Trade Commission. Notify the website or app where you met the scammer, too.

For more information on preventing elder financial fraud, visit the AARP Fraud Watch Network or consult with your financial advisor or trusted family or friend.