Marjorie Bloom is a widow who retired from her civil service employment. At the age of 77, a fraud investigator at her bank told her that criminals used stolen personal information to hack her account. The investigator urged her to wire her money — about $661,000 — to a different account to protect it from theft. Only after she lost her life savings did Marjorie realize that she had followed the instructions of a thief posing as a fraud investigator.
At the age of 80, Judith Boivin, a retired psychotherapist, received a call that appeared to come from the Rockville, Maryland Police Department. The caller told her that her Social Security had been deposited into three accounts that a cartel was using to launder money from drug sales. Believing she was working with the FBI, Judith converted her savings to cash and made a series of drops in parking lots, supposedly to assist in arresting the cartel members. Judith lost almost $600,000 to scammers because she believed she was “doing something good.”
Marjorie and Judith are not alone. Swindlers, con artists, and other financial criminals target America’s seniors. The FBI’s 2023 Senior Fraud Report breaks down complaints of financial crimes against Americans who are over the age of 60. In that year, more than 100,000 complaints involved total losses of more than $3.4 billion, with an average loss of almost $34,000. Those statistics reflect an 11% increase from 2022 in financial crimes against seniors.
The largest dollar losses involving victims over 60 resulted from fraudulent investment schemes, criminals impersonating tech support or customer service agents, email scammers who convince victims to make wire transfer payments, con artists pretending to have a romantic interest in the victim, and grifters posing as government agents. Financial crimes are often committed by strangers, but trustees, investment managers, and relatives who have access to a senior’s accounts are also in a position to steal money from older victims.
Seniors are targeted for several reasons. Older people tend to be trusting. They often have substantial savings. Many are lonely and thus more likely to welcome attention from strangers than younger adults might be. Some older Americans are not as mentally sharp as they once were, making them vulnerable to manipulation. Because they fear embarrassment or shame if they disclose that they were swindled, older victims are also less likely to report financial crimes.
Talking About Fraud
A New York Times article notes that it is better to prevent a crime than to hope that law enforcement can catch the criminal and recover the victim’s loss. Adult children can help their parents guard against fraud, but they aren’t likely to succeed unless they approach the subject with empathy. Making condescending statements that suggest a superior ability to evaluate investments isn’t likely to encourage the parent to welcome a child’s advice.
Jilenne Gunther, the director of AARP’s BankSafe Initiative, told the Times that a conversation about a potential investment is likely to come to a quick halt if an adult child says, “That would be a horrible decision.” A better approach is to gather information. “What attracts you to this investment?” and “What kind of return are you expecting to achieve?” are questions that will keep the conversation in motion.
If something seems off about the investment, the adult child might say, “I’ve never heard of this firm” or “That investment is new to me.” Tell the parent that you want to do some research to satisfy your curiosity. You might say that you’re always looking for new investments but want to perform due diligence before making a decision.
A useful strategy may be to acknowledge the wisdom that your parent has imparted over the years. Make clear that you want to return the favor by sharing information that you have gleaned from your reading. “I know more about this than you do” is an attitude that will turn off parents. “I learned some really interesting things from reading about scammers. Did you know …” is an approach that won’t end the conversation before it starts.
Peter Lichtenberg, a former director of the Institute of Gerontology at Wayne State University, told the Times that parents may resist offers of help. In particular, parents are in the early stages of dementia may have difficulty accepting that they are being scammed.
Lichtenberg explains that “one of the mistakes that people make is they think: OK, well, I’ll just show the person that they’re involved in a scam, and then they’ll logically realize, ‘I guess I have to give that up.’ But that’s not, of course, what happens. And so you’re really in a negotiation.”
The negotiation begins by asking the parent why her relationship with the potential scammer is so important to her. Developing a deeper understanding of the relationship will help the adult child identify desires (such as relief from loneliness) that the scammer may be exploiting. Offering alternatives that satisfy those desires may protect the parent from further victimization.
Preventing Victimization
In addition to having protective conversations, adult children can take concrete actions to protect their parents from financial fraud. Children might persuade their parents to activate protective features of financial accounts, such as daily withdrawal limits or automatic notification of a trusted child when financial transactions above a certain dollar limit occur.
A child might also ask for “view only” access to financial accounts. That access allows the child to monitor activity on a financial account but gives the child no authority to make withdrawals or transfers. A parent who is reluctant to give children that access might instead subscribe to an account monitoring service that flags suspicious transactions.
Using a few research tools might shed light on a potentially shady investment’s value. The Securities and Exchange Commission’s Electronic Data Gathering, Analysis and Retrieval System contains a wealth of information about publicly traded companies. Legitimate financial advisors should be listed with the Financial Industry Regulatory Authority’s BrokerCheck tool. Complaints about financial products and services can be researched at the Consumer Financial Protection Bureau database.
Suspected fraud can be reported to the FBI or the AARP Fraud Watch Network Helpline. Helpline advisers can help identify a scam and can provide advice to seniors who may have been victimized.