Fraud and how retirees are targeted

Older adults are disproportionately targeted by financial fraud and lose larger amounts per incident. The methods are consistent enough to describe.

Why the targeting

Not gullibility.

Older people are more likely to have accumulated assets, to own their homes outright, to be at home during the day, and to answer the telephone.

Isolation increases vulnerability, and someone with limited daily contact is more responsive to an unexpected caller.

And as discussed elsewhere on this site, financial decision-making ability tends to decline before confidence in it does.

The recurring patterns

Government impersonation. A caller claiming to be from a tax authority, Social Security or law enforcement, asserting a problem requiring immediate payment.

Real agencies do not telephone demanding immediate payment, do not threaten arrest over the phone, and do not request payment in gift cards or cryptocurrency.

The family emergency. A call claiming a grandchild is in trouble and needs money urgently, with a request not to tell their parents.

The secrecy request is the identifying feature. Voice cloning technology has made this more convincing.

The defence is a family arrangement: an agreed question, and a rule that any such call is verified by calling the person back on a known number.

Technical support. A pop-up or call claiming the computer is compromised, leading to remote access being granted and accounts being drained.

Romance fraud. A relationship developed over months online, followed by requests for money.

Losses here are frequently very large and it is substantially under-reported because of embarrassment.

Investment fraud. Guaranteed returns, urgency, exclusivity, and pressure not to consult anyone.

Affinity fraud — targeting members of a religious or community group through a trusted member — is a common variant.

Cryptocurrency and pig-butchering schemes, which combine relationship-building with a fraudulent investment platform showing fabricated gains.

These have grown enormously and the losses are typically total.

The common structure

Almost every scheme contains the same elements.

Urgency, so there is no time to think.

Secrecy, so nobody else can intervene.

An unusual payment method — gift cards, wire transfer, cryptocurrency — chosen because it is irreversible.

An emotional trigger, whether fear, love or greed.

Recognising the structure is more useful than memorising individual schemes, since the specific stories change constantly.

The rules that work

No financial decision during an unsolicited contact. Ever. Anything legitimate survives a delay.

Call back on a number you obtained independently. Never the number provided.

Tell someone. Secrecy is the mechanism that makes these work, and one conversation with a family member ends most of them.

Freeze credit files, which prevents new accounts being opened in your name and is free.

Never grant remote computer access to anyone who contacted you.

Treat gift cards and cryptocurrency requests as definitive. No legitimate organisation requests payment this way.

If it has happened

The immediate steps.

Contact financial institutions immediately, since some transfers can be stopped within a short window.

Report to law enforcement and to the relevant national fraud reporting body, which may assist and does contribute to enforcement.

Change passwords and enable additional authentication.

Consider a credit freeze if identity details were disclosed.

And be alert to recovery scams, which target previous victims by offering to retrieve lost funds for a fee. Victim lists are traded, and second approaches are common.

The shame problem

Worth addressing directly.

Fraud is under-reported because victims are embarrassed, and the embarrassment prevents both recovery and warning others.

These schemes are operated by organised professionals using well-refined psychological techniques. Being deceived by one reflects the quality of the deception rather than any deficiency in the person.

Families that treat it that way get told sooner, which is when something can still be done.

Setting up the defences in advance

A short list worth arranging while nothing is happening.

Agree a family verification question that would be used in any emergency call.

Freeze credit files at all major bureaus.

Name a trusted contact on financial accounts, which most institutions now permit.

Arrange that a second person receives duplicate statements, or reviews accounts periodically.

Enable transaction alerts on accounts and cards.

Each of these takes minutes and each removes a route that these schemes depend on.

General information only, not legal or security advice. Report suspected fraud to your financial institution and the relevant national reporting body.