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While anyone can end up the victim of fraud, senior citizens are particularly at risk.
Older Americans in the U.S. lose $3 billion a year in financial scams, according to the U.S. Senate's Special Committee on Aging. The most common ways seniors fall victim to fraud are through technical support scams, fraudulent business opportunities, sweepstakes, and family or friend imposter scams.
Not all senior fraud is the same. Sadly, it is not uncommon for close family members or caregivers to scam money from trusting older individuals. But senior citizens are increasingly at risk of identity theft from scams conducted by professional fraudsters. To prevent senior identity theft, it helps to understand why they've become favorite targets, the types of scams most often used, and what steps they can take to protect their money and their identity.
Why Elderly Citizens Are Vulnerable to Identity Theft
While data breaches and other financial scams have exposed millions in the U.S. to identity fraud, senior citizens are often a favorite target of scam artists. There are several reasons for this. Many older Americans are at a point in their lives when they have an impressive nest egg of savings and investments, and many have also begun accessing their retirement funds. At the same time, they are spending more time in medical offices and using more government services, two industries that are highly targeted by cybercriminals, according to the Identity Theft Resource Center. And that means their personal information is more at risk of compromise in a data breach.
Most important from a fraudster's point of view, the aging process makes seniors more vulnerable than other age groups. Some severe changes that accompany the aging process, such as the onset of dementia, directly impact the ability to make good decisions. But senior citizens are also more likely to be isolated, if they are widowed or less mobile due to health reasons, for example, and this can be a factor in how they react to scams. Some seniors may respond to the emotion of the situation—worry for a "kidnapped" grandchild, fear of arrest by the IRS, attention from someone they met online—and without a strong support system that can provide reality checks, they can be lured in by fraud.
Types of Senior Identity Theft
According to the Federal Trade Commission (FTC), people over age 60 are more likely to report a tech scam and less likely to report retail-related scams, especially when they involve financial loss. But there are a variety of scams out there that specifically target older adults to steal their identity. Here are some of the most common types of senior identity theft:
- Tech scams: You receive a phone call warning that there is a virus on your computer or that your software is out of date and needs to be replaced. The caller may ask for credit card numbers or for email addresses and passwords in order to "fix" the problem.
- Medicare fraud or other medical identity theft: Someone claiming to be a representative with Medicare or your health care provider requests sensitive personal information that's "missing" from the medical records.
- IRS scams: Bogus IRS calls typically start to come in around tax time. The caller threatens you with arrest or foreclosure due to back taxes you supposedly haven't paid and demands payment immediately.
- Estate identity theft or funeral scams: Fraudsters follow obituaries to steal sensitive information from the deceased, using personally identifiable information (PII) such as birth dates, hometowns and any other information they can cull. Scammers may turn up at funerals to take advantage of grieving family members or rob the home while the family is attending services.
- Military identity theft: The scammer uses PII to take claim of your military benefits, or they contact you claiming to represent the Veteran's Administration and request personal information.
- Phone scams and robocalls: These callers may want you to claim a free vacation, donate to charity or get some other special offer, all with the goal of getting your credit card number and other pieces of personal information.
- Grandparent scam: You get a frantic phone call from your "grandchild," who needs you to bail them out of jail in a foreign country or give them money after they were mugged. Of course, your grandchild is at home, perfectly safe, but if you're not careful, your money could be on its way to a fraudster.
- Romance scams: Someone reaches out to you on a dating site and starts chatting. You two hit it off, and soon, the person is asking for intimate details about you. Suddenly a financial crisis comes up and the person needs to you send money or offer your credit card number. This scammer then disappears with your money and your information.
How to Prevent Senior Identity Theft
Healthy skepticism and greater awareness can help older adults avoid becoming victims of identity theft. Here are some tips to better protect yourself or your loved ones:
- Add contact information of family members, close friends, health providers or anyone who might call regularly. This will help you know if the call is legitimate.
- If you don't recognize a phone number, let it go to voicemail. Scammers rarely leave messages.
- Don't be afraid to hang up. If you do answer the phone, it's OK to hang up if a stranger asks for personal or financial information.
- Remember that government agencies send letters about important information. They don't call or send email.
- Check your financial records, credit card statements and bank accounts regularly to make sure everything is in order.
- Don't carry your Social Security card. Only carry your Medicare card and other PII when you need it.
- Have checks direct-deposited into your bank account. This reduces the risk of the check (and all the valuable information on it) getting into the hands of a thief.
- Ask for help. If you aren't sure about something, get another opinion from a trusted friend or family member or do some research.
- If it sounds too good to be true, it is probably a scam. If the contact is threatening, it is probably a scam.
What to Do in Case of Identity Fraud
If you believe you are the victim of senior identity fraud, contact the FTC to open an identity theft case file. The FTC will provide an affidavit, which you can then take to your local police to file a report. Also contact federal and state government agencies, such as the IRS and Medicare offices. Finally, check your credit report for suspicious or unfamiliar activity, and alert the credit agencies that your identity has been stolen. While the fraud may have already occurred, these steps will help you reduce the damage.