Financial Fraud Targeting Aging Parents Is Organized Crime

This month, the U.S. Senate’s Special Committee On Aging held a hearing to address elder financial fraud. It is entitled Fighting Fraud: How Scammers are Stealing from Older Adults.

Ranking member Senator Braun stated that Medicare fraud alone cost taxpayers $60B in 2023. The committee thoroughly explored the broad topic of financial elder abuse and solutions.

Here at AgingParents.com, where we see the vulnerability of elders firsthand, and repeatedly hear about clients’ aging parents being ripped off, we are glad to see the Senate paying attention. There was testimony from various qualified witnesses at the hearing, which is recorded. Among them was Kathy Stokes, Director of Fraud Prevention Programs AARP Fraud Watch Network.

Her testimony explained something that has colored society’s perception of fraud victims, in that the victim is often blamed for “getting tricked”. However, Ms. Stokes clarified AARP’s own research findings, beginning decades ago, tells us that it is not the victim’s fault. AARP unveiled what criminal scammers refer to as getting their targets “under the ether.” They have known since the beginning of time that “to trigger a heightened emotional state is to bypass logical thinking – it is how our brains work”. We can’t stop or control a sort of automatic response when we feel in danger. That is exactly what scammer do—get their targets to think that danger is upon them or someone they love.

The Breadth of the Criminal Networks

Ms. Stokes testimony revealed how widespread and organized the criminals are. They know that older persons are likely to have more wealth than a younger person, after a lifetime of working and saving or owning a home. She explained how transnational crime rings operate. They have corporate offices. They use enslaved prisoners to force frontline scammers to do their dirty work. They get lists of leads, hacked data from banks, hotels, and many other sources and they teach the prisoners working for them to turn a fraud target into a fraud victim using a playbook. AARP’s research found that identify fraud alone cost Americans $43B in 2023.

How Criminals Are Using AI to Be More Effective

It used to be that you could tell if an email supposedly from your bank or financial institution was phony because of misspelled words. Or if you got a phone call purporting to be from a family member, but their voice sounded different, you would be suspicious. But now, AI is already being leveraged by fraud criminals to turn grammatically incorrect emails and texts into perfectly formed and convincing messages. It’s being used to create realistic fake photos, videos and websites that are designed to make the target believe they’re real.

Ms.Stokes testified that AI is like the industrial revolution for fraud criminals. It enables them to make every possible scam harder to see. This is even more of a reason for us to be vigilant when we know how they work. And it is imperative that anyone with an aging loved one in your family takes responsibility to educate them the best you can about the red flags.

Common fraud tactics include the tech support scam. The consumer gets a message that their computer has been hacked. Scammers then lead them to give access to all their financial data and the consumer’s money is stolen. The same type of evil is in the bank impostor scam. Someone calls, texts or emails the bank customer that their account has a fraud report on it. The scammer uses this to get the customer to give up passwords, and other data. Once they get it the customer’s money immediately disappears. Numerous other common scams abound. The hearing provided numerous resources available to the public to increase awareness and encourage protective action.

How We Can Fight Fraud

From the testimony at the hearing, suggestions were put forth. We all can do the following, regardless of our age. Scammers are after everyone, not just elders.

1. Freeze credit with the credit reporting agencies. You an unfreeze it if you need to at any time.

2. Use a password manager and multifactor authentication for your online accounts.

3. Shred your financial documents, bills and other identifying correspondence.

4. Keep your device’s operating systems udated to protect against known vulnerabilities. Outdated systems on your computer or phone are more readily hackable.

5. Never engage with incoming messages from unknown persons.

6. Talk about the latest info on scams and sneaky methods these criminals use. Help aging parents understand how anyone can be approached in many ways by fraudsters.

The more we talk about these scams, the better protected we will be. Families need to help their vulnerable elders understand how vigilant they must be to stay safe.