First Take - Blog
Financial exploitation is the #1 crime against those over the age of 65. The predators in this form of elder abuse cover a broad spectrum, from strangers on the internet to close family members. These schemes take advantage of a vulnerable population and can leave them in difficult and heartbreaking financial situations. Overall, $36.5 billion is lost every year to financial elder abuse, leaving 5 million victims annually. Not only that, but over 95% of these cases go unreported.
A few factors contribute to underreporting of financial exploitation. Some predictable reasons include shame, embarrassment, denial, and self-blame. Arguably, these factors impact underreporting of financial exploitation of all ages. However, there are a few specific to the older population: fear of consequences, dependence on the perpetrator, or in cases where family suspects abuse, loyalty to the victim. These reasons may seem good enough to talk yourself out of reporting, but the truth is that reporting not only empowers victims, but also prevents future scams.
There are three common scams to look out for when it comes to elder abuse: Romance Scams, Grandparent Scams, and Phishing Scams. Becoming familiar with these tricks can make your loved ones less likely to fall victim.
The first, romance scams, costs consumers $304 million in 2020, up 50% from the year before. These scammers prey on ages 65 and above, meeting them online and forming romantic connections with them. Throughout the pandemic, social distancing led to an increased vulnerability in the elderly population.
Next are grandparent scams. We all know the information a simple social media account can provide a scammer. Predators use public social media information to learn about loved ones – their names, where they work, and more. Scammers then call the individual claiming their family member (most popularly, their grandchild) is in trouble, using information found on social media sites to sound credible.
Finally, we have phishing scams. In these situations, phishers are, well, “fishing” for information. Let’s set the scene: Scammers spoof a familiar e-mail address, changing 1-2 letters. They then e-mail saying there has been fraudulent activity on one of your accounts, and you need to call a given number to get your money back. When you call, they ask for your online banking password to verify your identity. Scammers then transfer money from the account.
As a financial institution, we feel a responsibility to be proactive in warning our customers about these scams. Thanks to the SAFER AR Act, there are steps our government takes to investigate cases of elder abuse. However, if we want to eradicate financial exploitation of our elderly population, it will take educating all ages on how to safeguard themselves and their loved ones from financial predators.