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Helping Seniors Protect Against Fraud

Fraud is an ongoing threat facing seniors. COVID-19 has made it worse.

William Webster, a former director of the FBI and CIA, was targeted by a Jamaican lottery scam in 2014. The caller told Webster, who is now 96, he had won $72 million in the lottery but needed to send $50,000 to pay taxes on the award before receiving it. When Webster didn’t pay, he received repeated calls from the man, who seemed to know where Webster lived, threatening to harm him and his wife.

Webster assisted in an FBI investigation of the caller, Keniel Thomas, who was convicted of the cybercrime in 2019 and sentenced to six years in prison.

Seniors, regardless of their socioeconomic status, are common targets of online and telephone fraud. These incidents are accelerating during the coronavirus pandemic, which Director Robert Redfield of the Centers for Disease Control and Prevention has called the worst public health crisis in a century.

And most fraud cases don’t end as well as Webster’s. Older Americans lose nearly $3 billion a year to internet and telephone scams, according to a 2019 U.S. Senate Special Committee on Aging report.

COVID-19 leads to rise in scams

A Federal Trade Commission report found that Americans had lost more than $160 million from January through mid-October of 2020 in COVID-related scams involving federal stimulus payments, health care products, personal protective equipment, online shopping and financial schemes.

The FTC said it had fielded nearly 120,000 complaints of coronavirus-related fraud as of mid-October.

“While people are scared about their health and finances, con artists are having a field day,” said Lucy Baker in a statement posted on the U.S. Public Interest Research Group website, where Baker is consumer education associate.

These scams often involve fake COVID treatments or cures and fraudulent coronavirus antibody tests. Scammers attempt to ensnare victims with robocalls, text messages and emails. Those who respond to such communications can fall victim to identity theft, medical insurance fraud and financial loss.

Scam artists increasingly fool people through “spoofing,” in which the caller falsifies the information that shows up on the target’s caller ID display in order to disguise their identity. These scam calls can appear to be from a local number, or even from a company or a government agency that you may already know and trust. Online scammers similarly spoof email addresses.

But online fraud perpetrated against older Americans goes far beyond coronavirus cons to an increasing number of financial exploitation schemes and scams, according to the Senate report.

Common fraud schemes targeting seniors

According to the Senate report, the following are the top 10 most reported scams meant to defraud seniors:

  1. IRS impersonation scams, in which a caller posing as an IRS agent says you’re under investigation for a tax matter and you must make an immediate payment, often using a prepaid debit card, to resolve it.
  2. Robocalls and unsolicited phone calls offering to sell you a product or service, such as an extended car warranty.
  3. Lottery scams in which you receive a phone call telling you you’ve won a large lottery prize but must send in a payment to pay taxes or other fees before receiving the prize. A particularly dangerous one is the Jamaican lottery scam in which callers can become threatening.
  4. Computer tech support scams. In this one, someone posing as a tech support person says there is something wrong with your computer and gives instructions on how to fix it. The scam is designed to gain access to your computer and steal personal information.
  5. Elder financial abuse. This involves financial theft from a senior by family members, paid homecare providers or financial advisers, or by strangers who defraud seniors through mail, phone and internet scams.
  6. The grandparent scam. In this fraud, someone claiming to be a grandchild or a person holding the grandchild calls the grandparent and says the grandchild needs money to get out of jail, pay a hospital bill or get out of a foreign country. Scammers play on victims’ emotion and trick the grandparent to wire money to them.
  7. Romance scams. Single victims are contacted by potential paramours by phone, text or email who engage them in online or telephone relationships, sometimes for months. After they build trust with their victims, the con artists inevitably ask for money and then disappear when they get it.
  8. Social Security impersonation scams. Callers posing as Social Security Administration agents ask you to provide personal information, such as your Social Security number, date of birth and bank account numbers.
  9. Impending lawsuit scams. This is one of the fastest-growing scams, according to the Senate report. Victims are contacted by people claiming to be federal, state or local law enforcement officers, telling them they have outstanding warrants for their arrest. The scammers say victims will be arrested unless they make immediate payments over the phone.
  10. Identity theft. Online thieves steal Social Security numbers, financial information and other data to steal a person’s identity. They then commit a variety of crimes, including filing fake tax returns to get refunds, submitting fraudulent medical claims to Medicare or Medicaid, and applying for jobs.

While insurance-related scams didn’t make this top-10 list, they do exist. Most insurance-related scams are attempts to get personal information in order to steal a person’s identity. Be aware of the following:

  • Emails that appear to be from your life insurance company and ask for personal information. Do not reply to these emails. Instead, call your insurance company and report the email.
  • Phony life insurance websites. These sites typically promote insurance rates that are much lower than the norm, or make it easy to sign up with no health underwriting. Do not provide personal information on these sites or buy a policy without verifying the company.
  • If you’re not sure whether a website, company or agent is legitimate, contact your state’s insurance department. They can verify whether a company actually exists and if it’s allowed to sell in your area.

How to help avoid and prevent fraud against seniors

Here are some tips for seniors to avoid online and telephone fraud:

  • Never give your credit card, banking, Social Security, Medicare or other personal information over the phone unless you initiated the call.
  • Don’t click on links or download files from unexpected emails, even if the email address looks like it’s from a company or person you recognize. The same goes for text messages and unfamiliar websites.
  • Avoid online offers for coronavirus-related vaccines or cures. They’re bogus.
  • Be skeptical of fundraising calls or emails for COVID-19 victims or research, especially if they pressure you to act quickly and request payment via debit or gift cards.
  • Make sure all computer antivirus software, security software and malware protections are up to date.
  • Beware of offers for free travel.
  • Don’t respond to calls or texts from unknown phone numbers or those that appear suspicious.

Here are some suspicious signs seniors’ loved ones should look out for:

  • Recent changes in a senior’s bank account, including unusual withdrawals, new names added to the account, and a sudden use of the senior’s ATM or credit card.
  • The senior suddenly appears confused, unkempt or afraid.
  • Bills aren’t being paid despite adequate financial resources.
  • Piled-up magazine subscriptions, sweepstakes mailings and “free” gifts that indicate the senior could be on “sucker lists” containing personal information sold to scammers.

Scammers have no shame, and not even a global health crisis is off-limits for them. But the increasing number of scams, especially those targeting seniors, have led state and federal authorities to more aggressively investigate these instances of attempted fraud and to step up prevention measures. And an abundance of resources is available to consumers to learn how to protect themselves.

The Federal Trade Commission website is an exceptionally helpful source for tips and information on how to spot fraud, avoid fraud, and report it.

The FTC site has a PDF available with five quick tips on how to protect yourself, titled Keep Calm and Avoid Coronavirus Scams.


SOURCES
Senate Committee on Aging Report; Nov. 1, 2019: https://www.collins.senate.gov/sites/default/files/2019%20Fraud%20Book.pdf

FTC COVID-19 and Stimulus Report; Nov. 23, 2020: https://public.tableau.com/profile/federal.trade.commission#!/vizhome/COVID-19andStimulusReports/FraudLosses

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