MP Dunleavey is an award-winning personal finance journalist and author. For several years she was the Cost of Living columnist for The New York Times, covering real-life financial, behavioral finance, and investing issues. She was also the founding editor-in-chief of DailyWorth.com, the first financial e-newsletter for women.
Incidents of elder fraud and senior identity theft are on the rise. The number of adults over 65 who experienced at least one incident of fraud increased to 78% in 2022 from 69% in 2021, according to AARP.
Although some types of scams target seniors by definition (those involving Social Security or Medicare, for example), the reality is that older adults can fall victim to any type of fraud. What makes seniors truly more vulnerable to elder fraud is that they have so much to lose: Years of savings, retirement funds, home equity, pensions, and more.
Incidents of elder fraud are on the rise, but being familiar with scams makes you less likely to fall for them.
Many scams follow a pattern: Scammers rile up your emotions and then pressure you to share personal data or send money.
To avoid losses: Stay calm, get help, and take your time before you act.
When you factor in all types of scams (including estimates of crimes that go unreported), older adults lost about $28.3 billion in 2022, according to data analyzed by the National Opinion Research Center at the University of Chicago and AARP.
Luckily, one of the most effective ways older adults—or anyone—can protect themselves from fraud is to become familiar with common scam scenarios. It sounds simple, but research shows that if you’ve heard about a particular scam, you are 80% less likely to engage with it—and even if you do engage, you’re 40% less likely to become a victim.
The basic elements of scams and where they overlap
Details vary from one con to the next, but most scams fall into two broad categories:
Emotional manipulation. The scammer presents a fake scenario that provokes extreme fear or excitement (e.g., losing money or winning money). Next, the victim is coaxed to share personal data or send money to “solve” the problem or “win” a prize.
Deception. These crimes are harder to detect because they involve deeper levels of deceit and disinformation. They include fraudulent emails, phone calls, websites, and social media posts that seem to come from a legitimate source, such as your real estate agent, boss, or bank. Ultimately, there’s a request for personal data or some kind of payment.
The best protection is to remain calm and cultivate a high degree of skepticism and caution. Always take the time to double-check phone numbers, email addresses, the spelling of an app or website, and any other identifiers that could tip you off to potential fraud.
So many scams go unreported that it’s difficult to tally the number and the cost of each type of fraud, but the data that is available shows just how varied and vast such crimes are.
1. Investment scams.
Investment scams were among the most common and the most costly in 2022, according to the Federal Bureau of Investigation (FBI) Internet Crime Complaint Center. Investment fraud complaints increased to $3.31 billion in 2022 from $1.45 billion in 2021, a 127% increase.
Crypto scams. These ploys may involve paying for real estate, gaining access to your crypto wallet, using hacked social media accounts to perpetrate fraudulent crypto investments, and even romance (see romance scams below).
Investment scams. These solicitations may come via standard mail, email, or even a door-to-door salesperson. The hallmark of these scams is a complex, fast-talking pitch that promises some kind of jackpot.
Any account—such as a pension, 401(k), or Roth IRA—where you keep money for retirement or investment is a potential target for scams. Bad actors may impersonate administrators or set up fraudulent websites to trick you into divulging information or routing payments to them.
2. Imposter scams
The range of imposter scams knows no limit and includes:
Government employees. Fraudsters posing as federal workers was the most commonly reported scam by older adults from 2015–20, according to the Senate Special Committee on Aging. These imposters claim to be contacting you from Social Security, Medicare or Medicaid, the IRS, or another government agency and get you to share personal data.
Family members. These scammers claim to be in trouble, or they impersonate a police officer claiming your loved one is in a crisis. Then they ask you to send money.
3. Romance scams
According to the Federal Trade Commission, some 70,000 people reported romance scams in 2022; losses hit $1.3 billion, with a median reported loss of $4,400. Here a new love interest—often someone you met on a dating app—asks you for money. They may claim they are sick or in jail and need help, or say they have an investment opportunity for you.
4. Tech support hacks
These hackers also rely on impersonation, but this type of crime deserves to be called out separately because it’s so insidious.
Typically, cybercriminals claim to be troubleshooting a tech problem and ask for remote access to your computer. In other cases, there might be a pop-up alert on your phone or computer that urges you to click to prevent a security breach. Once the hacker accesses your device, they can steal your data, install malware, and more.
Fifty percent of those targeted by these “phantom hacker” scams in the first six months of 2023 were over 60 years old—and accounted for 66% of total losses reported, about $357.7 million, according to the FBI.
5. Sweepstakes and lottery scams
These scams begin with an unsolicited call, text, or email that announces you’ve won a prize, but you need to take a few steps to collect it. Next, you’ll be prompted to divulge personal data or bank account information.
Scammers may impersonate well-known organizations, like Publishers Clearing House, or try to convince you that you recently entered a contest and forgot about it.
The bottom line
Although a growing number of older adults are targeted by scammers, younger adults fall for scams more often, according to the FBI. But seniors are more vulnerable to elder fraud because their life savings can be wiped out and there is no recourse or restitution once that money is gone.
For that reason, sharing information about fraud is key because talking about such incidents can benefit others. Simply becoming familiar with common tactics can prevent older adults—or anyone—from becoming victims of these crimes.