“Susan” from Boulder lost $21,000 through an IRS impersonation scam. She received a call from someone claiming to work for the IRS. The scammer directed her to send several electronic money transfers in various amounts until the “outstanding debt” was paid off. 

“George,” from Denver lost $6,000 to a grandparent scam. George received a call from someone claiming to be his grandson, saying he had been in an accident. The caller instructed George to purchase iTunes gift cards. After purchasing them, George read the numbers on the back of the cards to the person on the phone. This allowed the scammer to steal the money on the cards. George became suspicious when the person on the phone began requesting more money. 

Thousands of stories like these happen every year. According to research by the Stanford Center on Longevity and the Financial Industry Regulatory Authority’s Investor Education Foundation, adults over 65 are more likely to have lost money through a financial scam than an adult in their 40s. In addition, only 1 in 44 victims of financial fraud report the crime, often out of embarrassment or fear that their children will take control of their finances.

The typical victim of senior scams and fraud is a white woman aged 70 to 89, according to a study by MetLife. She is likely to be lonely or isolated and suffers from some cognitive impairment. Criminals target older adults because they are trusting, believe them to be not very familiar with computers and tech, and are more likely to have large savings accounts and credit card limits. Older adults seem to be most vulnerable to scams involving charities, home improvements, credit cards, health products, sweepstakes or contests, banking, investments, and insurance.

Let’s look at five common scams used to commit fraud against senior citizens. Pay attention. There may be a quiz at the end. 

Identity Theft

The most common form of fraud against senior citizens is identity theft. It is a growing problem in the United States. According to the Federal Trade Commission (FTC), more than 20% of reported identity theft victims were 60 years old or older. These numbers are probably not complete because many victims do not report the crime. They either don’t know how to report the crime or didn’t out of embarrassment. They also might refrain from reporting the crime because the thief could be someone they know, like a relative or a medical professional.

Here’s an example of identity theft. “Mark,” from Aurora believed his father was the victim of identity theft. Mark said his father began receiving multiple letters from collection agencies about credit cards opened in his name. 

Identity theft happens when a scammer steals some or all of your personal information and uses it to steal money, products, or services. Personal information could include your social security number, your bank account number, your credit card account numbers, or insurance information. 

Once the scammer has your personal information, they can empty your bank account, purchase items on your credit cards, open new credit cards, open new bank accounts, file a tax form in your name, and pocket your refund.

According to the Federal Trade Commission, here are some clues to spotting identity theft

  • Withdrawals from your bank account you can’t explain.
  • You are not receiving your bills or other mail.
  • Merchants refuse your checks or your credit cards
  • Debt collectors call you about debts that aren’t yours.
  • You find unfamiliar charges on your credit cards
  • Your receive medical bills for services you didn’t use.

The Federal Trade Commission offers great online resources for victims of identity theft. There are also hints to avoid being a victim. 

IRS Scams

Dealing with the IRS is scary for almost everyone. Sue’s story is a classic IRS scam. The scammer made her believe she was talking to an IRS agent and that she had to comply. Most IRS scams take the form of a phone call in which the scammer tells the victim they owe money to the IRS, and they must pay the money immediately or risk arrest. 

It’s important to remember that the IRS will never call to demand immediate payment using a specific payment method such as a prepaid debit card, gift card, or wire transfer. The IRS will always mail a bill to anyone who owes taxes first. The IRS will also never threaten to bring in local police, immigration officers, or other law enforcement to have you arrested. These threats are common practice for thieves to create fear in victims. 

The IRS offers tips to avoid scams on their website and explains what to do if you feel you’ve been scammed. 

The Grandparent Scam

This one is especially cruel. George’s story at the beginning of this article is heartbreaking. Can you imagine how George must have felt, thinking his grandson was hurt and needed help? 

Grandparent scams work like this: the victim receives a phone call from someone who says they are their grandchild. This person explains they are in trouble. There’s been an accident, or an arrest, or a robbery. To increase the urgency, the caller might say they are hospitalized or stuck in a foreign country. The thief offers just enough detail to make the story seem plausible and may even give the phone to another scammer who pretends to be a doctor, police officer, or lawyer to back up the story. The “grandchild” begs the grandparent to send money or gift cards immediately. 

The FTC took more than 91,000 reports of a thief posing as a relative or friend of the victim from 2015 through 2020. If you think you were a victim of a grandparent scam, file a complaint with the Federal Communications Commission immediately. 

Computer Tech Scam

Computer technical support scams prey on older people’s assumed lack of knowledge about computers and cybersecurity. A pop-up message or blank screen usually appears on a computer or phone, telling the victim that their device is compromised and needs fixing. If the victim calls the number for help, the scammer will request remote access to their computer and insist the victim pay a charge to repair it. 

The Federal Trade Commission (FTC) found that seniors who fell for this scam lost an average of $500 each in 2018. But money isn’t the only thing older people lose with this scam. Once thieves have access to a victim’s device, they can steal sensitive personal information or install spyware – a form of malware that gathers information. The crime then becomes an identity theft as well as a computer theft. 

If you’ve been scammed, report your case to the Federal Trade Commission, change any passwords you shared, and scan your computer for malware. If you gave the thief your credit card number, contact the credit card company to freeze your card. If the scammer calls back, hang up immediately.

Sweepstakes or Lottery Scams

 “Helen,” from Pueblo, was a victim of a sweepstakes scam. The scammer told her she was a recipient of a $1 million prize, but to receive it she must wire $500 via Western Union. She did but never heard back about her prize. Since the scammer never gave Helen a name or a phone number, authorities were not able to help her get her money back.

Sweepstake scams continue to claim senior victims who believe they have won a lottery and only need to take a few actions to obtain their winnings. In this scam, fraudsters generally contact victims by phone or through the mail to tell them that they have won or have been entered to win a prize. Scammers then require the victims to pay a fee to either receive their winnings or improve the odds of winning.

According to the Federal Trade Commission (FTC), the number of reported sweepstakes scams increased by 44.5% between 2013 and 2016. If you think you are a victim of a sweepstakes scam, report it to the FTC immediately. 

Pop Quiz

In this article, we’ve outlined five ways seniors can be subjected to scams and frauds. The best way to avoid these crimes is to understand how the scams work and to be able to spot the signs of a scam. Let’s see if you can identify which scams your fellow older adults were subjected to in the following stories. Fill in the blank below. 

Case #1: “Al” from Denver got a call from an unknown number. The caller told Al that he had won $1 million, but would need to pay $200 in iTunes gift cards to receive his prize. After purchasing the gift card, Al read the numbers on the back of the cards to the person on the phone who pocketed the cash. This is an example of a ___________________________________ scam. 

Case #2: In February 2017, the Senate Aging Committee heard testimony from Philip Hatch, an 81-year-old resident of Portland, Maine, who lost $8,000 in a _______________ scam and just barely escaped losing another $15,000.The thief insisted Hatch owed $6,000 to the IRS because of a mistake on his tax returns.  He immediately offered to send a check via regular mail, but the caller insisted Hatch purchase iTunes gift cards, and the caller would call back to get the card numbers. Mr. Hatch did as the scammers asked. 

Case #3: “Molly” from Broomfield lost $3,800 when she received a call from someone claiming to be her granddaughter. This person told Molly she had been arrested in Mexico and needed bail money. Among other things, the scammer requested $1,860 for an appearance bond and $900 to pay a fine for negligence. In the end, Molly ended up paying approximately $3,800 via electronic wire transfers at Western Union. This is an example of a _____________________________________________scam. 

Case #4: “Brian” from Littleton, reported that he had fallen victim to a _________________scam. Brain said a pop-up appeared on his computer screen that prevented him from doing anything. The pop-up was masked as a Microsoft dialogue box and told him to call a number to get a virus removed. The first couple of times it appeared, Brian would restart his computer, but he eventually called the number on the dialogue box. The person on the phone identified himself as a Microsoft tech expert. The scammer told Brian his computer was infected with a virus. He said he needed to take control of Brian’s computer to clean it and install antivirus software. Brian paid the scammers $895 in “service fees, software, and damage repair costs.” He never heard back from the scammer. 

Case #5: “Sam” from Brighton hired a home health nurse to help him take care of his wife Sally who suffered from dementia. Anna was very helpful, and Sam trusted her completely. Anna had access to all of Sally’s medical records and insurance information. He also gave Anna his credit card to purchase groceries, which she would immediately give back to him after shopping. But then, he found a couple of very large purchases on his credit card, charges he did not make. Then Sally’s insurance reported a couple of procedures he knew were not for Sally. He was not sure what was happening, so he asked his son about it. His son immediately recognized the situation as a __________________________ scam. 

Don’t Be Scammed

There are many more than these 5 ways being used to scam older adults. These are just the most common ones. If you feel like you or a loved one has been a victim of fraud or scams, don’t be afraid or embarrassed to talk about it with someone you trust. There are organizations to help. Doing nothing could make it worse not only for you and your family but also for other potential victims. 

Visit the Federal Trade Commission website for more information and assistance. 

You can also contact the Colorado State Attorney General’s Office of Consumer Protection. Here: Consumer Protection – Colorado Attorney General | Colorado Attorney General | Colorado Attorney General (coag.gov)

Our thanks to The 1st Judicial District Attorney’s Office’s “Power Against Fraud” booklet, which was the source for much of this.