Anthony, an older man from California, told ABC7 Los Angeles last October that he had been scammed out of $25,000 by means of a voice generated by artificial intelligence. Anthony, who declined to give his last name, got a call from his son, as he believed, who told him that he’d gotten into a car accident and hit a pregnant woman who was hospitalized. Soon after Anthony hung up, another person called claiming to be his son’s lawyer. This caller said that $9,200 was needed immediately for bail or else Anthony’s son would be jailed for a month and a half.
AI has brought to a boil a problem that has been simmering for several decades. Older adults report financial exploitation to be the most frequent form of abuse they experience, with estimated annual losses as high as $28 billion in the U.S. alone. As the fastest-growing and wealthiest segment of the population, currently controlling 65 percent of the U.S.’s total wealth and $13 trillion in home equity wealth, older adults are increasingly likely to be targeted by scammers. Their vulnerability to scams stems from the many and diverse challenges of aging. These include declines in cognition, alterations in life circumstances (such as the death of a spouse) and difficulty keeping up with the constantly changing technological landscape.
Scammers use sophisticated tactics that prey on the vulnerabilities of older adults, inciting panic and inducing isolation so that individuals make decisions alone and quickly. Anthony, for instance, rushed to the bank and withdrew the money demanded and gave it to someone who came to his home. Then he received another phone call from a person posturing as a second lawyer. The accident victim had passed away, the caller said, which meant Anthony’s son’s predicament had worsened, and the amount needed for bail had gone up—$15,800 was now required. Shaken, Anthony paid again. It was only after this second payment that his daughter suggested to him that he might have been scammed.
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No matter the amount of money lost, being scammed can damage mental and physical health, erode self-confidence and diminish one’s quality of life. It can even contribute to premature death, as found by Jason Burnett of the McGovern Medical School at the University of Texas Health Science Center at Houston and colleagues. Fortunately, however, many people are able to detect a scam and walk away. How do they do that, and can their methods be used by others?
We decided to find answers to these questions. In 2016 we began conducting town hall meetings, self-report surveys, focus group discussions and in-depth individual interviews with nearly 300 residents of a large retirement community in Florida about their experiences with financial exploitation. Most everyone we talked to said that they had moved to the retirement community because they believed that they would not have to worry about crime—they would be living behind security gates, and all their neighbors would be older people.
In fact, however, they were being targeted by scammers more often since they had moved to the retirement community, which provided a concentration of wealthy and vulnerable adults. Almost immediately after moving into their new homes, many received phone calls, e-mails, and knocks on the door offering fraudulent services for home and auto repair, prizes and sweepstakes, and financial planning. They quickly had to learn to be vigilant.
Their main strategies to avoid being scammed: maintaining a skeptical mindset and keeping well informed about fraud and the diverse tactics used by scammers, especially during stressful times when they were consumed with other factors, such as a serious illness. “I keep up to date about fraud or scams,” Richard, then age 64, told us in an interview during our research. “I read all articles on scams. You really have to educate yourself.” (We changed the names of those we interviewed for privacy.) Protection against scams comes from continual education that helps older people develop and sustain their skepticism while also increasing their confidence in their ability to make smart, informed decisions.
Scams Old And New
AI has introduced novel ways for fraudsters to trick older adults through replicated or altered voices, videos, photographs and documents. Recent and novel scams that affect older adults include calls, texts or e-mails that come as urgent messages from someone pretending to be a government official or law enforcement officer, requiring payment for what they claim is missed jury duty, unpaid highway tolls or parking and traffic tickets. Failure to send money immediately, individuals are told, will result in their arrest or deportation.
At the same time, some long-standing scams continue to occur—but more frequently and with greater sophistication, making them more difficult to avoid. Lottery and sweepstakes scams remain common. Offenders, typically impersonating well-known celebrities or organizations, contact a person out of the blue and tell them that they have won a prize. To claim winnings, the scammers stress, individuals must send the money right away—sometimes thousands of dollars—to cover “taxes,” “shipping” or “processing fees.” Even though no prize will ever arrive, scammers continue to contact their victims to convince them that more money must be sent.
Many variations on this theme exist. For example, the FBI first began receiving reports of the “grandparent scam” in 2008. This kind of fraud, resembling that experienced by Anthony, exploits a person’s emotions, inciting fear and anxiety, by impersonating a grandchild or other family member in distress. Offenders often demand that money be provided quickly and through gift cards or wire transfers, which don’t require identification to collect. Sometimes scammers have even sent couriers to their targets’ homes to collect money.
These scams have been around for decades but persist as significant threats to older adults. They regularly top lists provided by law enforcement and advocacy groups of the most common scams targeting older adults. (The lists also often include government impersonation, tech support and financial services scams.) Not least, older adults are also increasingly targeted for scams involving medical procedures, insurance, auto and home repair, and sales.
Ralph, a highly decorated war veteran from Florida, and his wife received a phone call selling unlimited cruise vacations for one year from a seemingly reputable company. After paying $2,000 from their limited fixed income and savings, the couple never received confirmation of their purchase or information about how to redeem their vacations. Months passed, and Ralph, then age 90, sought help from the police. Eventually, a law enforcement official met with Ralph to tell him the case had to be closed without a resolution. As tears ran down his face, Ralph told the official, “It’s not about the money. I just feel so stupid.” This sense of helplessness, embarrassment and utter misery is what so many scam victims report feeling.
Older adults can also be scammed by romantic partners, friends or family members. Tragically, nearly 50 percent of scams involve the people who are closest to older adults; these cases seldom get reported to law enforcement. Another common tactic: offenders scan obituary columns in local newspapers to befriend a widow or widower at a time when they are vulnerable. John, then age 67, told us that someone from local funeral homes “reminds women to never put an obituary [in the newspaper] because you are a target, and the minute that that goes in there, some crook is reading that to see if they can make a connection with you—‘Oh, your late husband was an Air Force pilot; I was a pilot, too’—and they use that to eventually get at their money.”
Why do people fall for these types of scams? The people with whom we talked reported that at the time of victimization—and regardless of whether the scam was routine or new—their judgement became so clouded that they lost their ability to be skeptical. They made spur-of-the moment decisions that were uncharacteristic of those they would have made in preceding months or years. Certain factors compound this problem.
Research suggests that older adults struggle more to anticipate financial losses, have higher levels of trust for strangers and have a lower ability to detect deceptions compared with younger adults. These differences, both cognitive and psychological, may reflect age-related changes to the brain. Older adults also face an increasing frequency of setbacks to their physical and emotional health, which can reduce their self-confidence and hinder their skepticism. “I was in the hospital, depressed, and couldn’t hear that well anymore. When a [financial] planner called, I just wasn’t in the right place,” Anne, then age 78, said to us. “I should have known better. I did know better, but … I was just so depressed.” Peter Lichtenberg, a researcher at Wayne State University, and colleagues reported in 2016 that symptoms of depression were associated with an increased risk of fraud among older adults.
Social isolation also constitutes a significant factor. The loss of loved ones that comes with aging can shrink social networks and add to people’s vulnerability. “I have nobody. I don’t have anybody,” Harold, then age 75, told us. “My brother passed away. My sister is lingering in a nursing home…, and that’s it…. Losing support systems is terrifying, especially for us older folks.” In 2018 Marti DeLiemaof the University of Minnesota observed that the lack of a trustworthy network of friends or family best distinguished the older adults who had been defrauded from those who had not.
Major life transitions, such as divorce or the loss of a spouse, can leave older adults alone and without skills that others had earlier provided. Several widows told us that their spouse had handled finances, for instance, and they did not know how to. Worse, unscrupulous people can prey upon the emotional turmoil that comes with death or divorce. “The [scammer] was really very slick, and I was going through a divorce, and he just made me feel like I was an okay person, where I was feeling really badly about myself at the time,” Cheryl, then age 66, told us. “So he got me in. They were long conversations. We’d stay on the phone for an hour. It was all about my life and that kind of stuff, and I just got sucked into it.”
How to Protect Yourself
In our research, we also found many people who, despite being targeted, had avoided scams. Their experiences offered invaluable insights about steps to protect against financial exploitation.
You can help reduce your risk of victimization by educating yourself on scams and staying informed about changes to the fraud landscape. Many reliable government agencies regularly publish information about old and new scams. These include the Consumer Financial Protection Bureau, Federal Trade Commission, FBI and U.S. Department of Justice. In addition, the Federal Deposit Insurance Corporation publishes a Money Smart for Older Adults resource guide that details numerous types of scams and prevention strategies.
Several large nonprofit organizations and advocacy groups also provide up-to-date information on scams and advise on strategies for prevention. The advocacy group AARP’s Fraud Watch Network and weekly The Perfect Scam podcast share real-life stories about scams, help older adults identify scams before they happen and provide guidance if they do become victims. Additionally, resources from the American Bankers Association, the Financial Industry Regulatory Authority (FINRA) and the National Council on Aging provide tools for preventing and responding to financial exploitation. Many local agencies and organizations also host in-person workshops on scams and prevention strategies in community centers across the country.
Older adults should also understandhow rapidly their judgment may change. Although you may currently be able to navigate life circumstances, including keeping up with potential scams, that may change tomorrow. “I understand how to protect myself now,” Brian, then age 79, said to us. “I wonder if I’ll understand and do it 10 years from now, if I live to be 90.” Brian frequently reminded his wife, who did not handle their household finances, that she needed to be careful and that if he were to pass away before she did, she should consult with their son before making any financial decisions.
Approaching all interactions with an underlying skepticism can assist older adults in asking questions, slowing down and seeking assistance. Taken together, these measures—remaining informed about scams, being skeptical, identifying and relying on trusted individuals, and being vigilant against overconfidence—can help you recognize and protect against potential scams and victimization. Do not be afraid to say no or to refuse to engage with someone, hang up the telephone, refuse to open the door, delete e-mails or destroy mail addressed to you. What’s more, you should never hurry when making a financial decision, especially when your instincts are telling you something feels off. Follow the age-old dictum—if it seems too good to be true, it probably is.
The following practical steps can help you protect yourself and your family from financial scams:
If you believe you are experiencing a potential financial scam, immediately end all communications with the suspected perpetrator.
Resist pressure to act quickly.
Be suspicious of unsolicited telephone calls, mailings, online interactions or door-to-door services.
Do not hesitate to call the police if you feel you or your family may be in danger.
If you receive an unexpected call, e-mail, or text message from someone claiming to be from your bank, hang up and call your bank’s number on your credit or debit card.
If you receive a questionable offer, search online for contact information on the offer.
Create a secret family password to verify the identity of a family member to use in the event you receive suspicious telephone or online requests for money for personal information.
Never send personal identifiable information, money, jewelry, gift cards, checks, or wire funds or information to unverified persons or businesses.
Never open an e-mail attachment or click a link in a text message from someone you do not know.
Keep your computer up to date with antivirus and security software.
Regularly check your financial accounts for unusual or unauthorized activity.
Immediately turn off your Internet access if you see a pop-up message that won’t go away or if your screen suddenly locks and can’t be unlocked.
Protect your identity, but should a fraudster gain access to your identity or accounts, immediately contact your bank to place protection on your accounts.
None of us, regardless of age, can fully protect against ever-changing and technology-aided scams, but employing these practical steps will reduce the likelihood of becoming a victim. If you do fall for a scam, do not be silent or feel ashamed. Instead, share and report your experience. You may report financial fraud and scams to your local law enforcement agency, state attorney general’s office, the Better Business Bureau, Federal Trade Commission, FINRA or the FBI’s Internet Crime Complaint Center.
In our collective effort to build awareness of these evolving threats and thereby protect ourselves and others, we cannot be complacent or silent. We must recognize what we know and do not know about financial exploitation. And we must be open to reporting and discussing our experiences to help build more effective responses. “You may not be able to prevent all [scams],” Paul, then age 87, told us. “But we need education. We need support. We need to communicate with people and let them know that they are not alone.”
