Elder Fraud
Elder fraud, also known as elder financial exploitation, has been called the “Crime of the 21st Century” and deploying effective countermeasures have never been more important to protect our senior citizens.
What is Elder Fraud?
Put simply, elder fraud is the illegal or improper use of an older person’s funds, property or assets. This most common form of elder abuse targets victims generally over the age of 60 and usually involves making false promises about financial benefits, commodities, or services that either do not exist, were never intended to be offered, or were misinterpreted. In 2023, the FBI’s IC3 recorded that investment scams against elders were responsible for over $1.2 billion in total financial losses. Seniors are typically targeted by cybercriminals for a multitude of reasons, some common reasons are listed below:
Seniors have higher average net worth, usually have a regular source of income such as Social Security, and typically own assets such as properties, savings accounts, and retirement accounts
Seniors are especially vulnerable due to isolation, declining mental and physical health, and may be more trusting than the average adult
More susceptible to internet fraud due to technological barriers and literacy
Seniors looking to retire may find themselves more open to alternative investments to safeguard their wealth
Elder Fraud Red Flags to Spot
Elder Fraud can take many forms, from scams targeting seniors directly to financial abuse by “trusted” individuals. Here are some key red flags to look out for to protect elders:
Unusual Financial Activity
Look out for large, unexpected withdrawals or transfers from bank accounts
Sudden changes in spending patterns, such as frequent purchases of gift cards or unusual online transactions
Isolation or Fear
Increased isolation from family and friends
Fear or anxiety when discussing financial matters
Unpaid Bills or Notices
Unpaid bills or notices of overdue payments despite having sufficient funds
Utilities or services being cut off unexpectedly
Strange Communication
Frequent phone calls or emails from unknown individuals or organizations, especially those requesting personal information or money
Pressure to make immediate decisions regarding finances, donations, or investments
Unfamiliar Businesses or Charities
Donations to unfamiliar charities or causes that the elder has no history of supporting
Payments to business or for services that the elder does not need or use
How to avoid Elder Fraud?
Elder fraud can be perpetrated by a stranger and many times even someone close to the victim, such as a family member or caregiver. LPL Financial advisors frequently work with retirement age adults and/or may be of retirement age themselves. To protect yourself against elder fraud, there are a few steps you can take to ensure that you are protected:
Simplify your finances
Designate someone as power of attorney
Limit access to financial accounts to only trusted individuals
Keep up to date on local scams and understand common scams
Stay informed on the lates scams targeting seniors, such as lottery scams, investment scams, and phishing scams
Educate seniors about the dangers of sharing personal information, especially over the phone, online, or with strangers
Monitor and strengthen your financial and investment accounts
Set up account alerts with banks and financial institutions to monitor suspicious activity
Check credit reports annually to ensure no unauthorized accounts have been opened
Verify credentials before giving out confidential information
Never wire money without verifying person or organization
Do not provide any personal information unless the person is verified, and you were expecting the request
What to do if you are a victim of Elder Fraud:
If you or someone you know has fallen victim to elder fraud, immediately stop all communication with the scammer. If the scammer obtained any sensitive information such as your Social Security number, contact the credit bureaus as well as the Social Security Administration. If they have compromised any banking information, contact the financial institution as soon as possible so that they can assist with the situation.
If you would like to report a case of elder fraud to the FBI Internet Crime Complaint Center, please use this link: https://www.ic3.gov/Home/EF
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This material is for general information only and is not intended to provide specific advice or recommendations for any individual. This material was prepared by LPL Financial, LLC
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