Top Scams Targeting Retirees: Here’s All You Need to Know

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Financial scams are on the rise, especially targeting retirees. Such scams are so prevalent that they are considered to be the “crime of the 21st century.” Financial scams are difficult to prosecute and often go unreported, and thus, are considered to be low-risk crimes.

For retirees, however, it can be devastating, leaving them financially vulnerable. Moreover, fraudsters don’t just target wealthy retirees, low-income senior citizens are also at risk.

Thus, it is very important for retirees to be aware of scams so that they can save their hard earned money.  In this article, we will take a look at the top scams targeting retirees.

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Why Retirees?

Financial scams are a growing problem in the United States, and they hit people of all ages. Retirees, however, get hit hardest of all.

In 2022, Americans lost about $8.8 billion to scams, 30% more than the losses in 2021, according to data from the Federal Trade Commission. The median loss for all age groups was $650 last year, but for victims aged 80 and above, the median loss was $1,674.

A major reason for the growing number of scams against seniors is that they are less likely to be tech-savvy and more likely to be home during the day to answer phone calls and emails, including these scams.

Moreover, the scams targeting retirees don’t always come from strangers. In fact, many reported scams are committed by the retirees’ own family members, or someone whom they trust.

Top Scams Targeting Retirees

Here are the top scams targeting retirees:

Grandparent Scam

To execute this scam, fraudsters pretend to be police and claim that the victim's grandchild is in trouble, such as involved in an accident or a crime.

The scammer uses the real name of the victim's grandchild, along with other identifying information to make the call more believable. After this, scammers ask the target to transfer a certain amount of money to “save” their grandchild.

Healthcare Related Fraud

In these types of scams, fraudsters pretend to be a Medicare representative and ask older people to share their personal information. There have also been cases when fraudsters provide bogus services at makeshift mobile clinics, and then use the information that retirees provide there to bill Medicare and pocket the money.

Elder Romance Scams

Scammers executing this scam target lonely adults by creating fake profiles on dating apps or social media. Before contacting the retiree, fraudsters collect their publicly available information and use that to lure them in.

Once scammers establish a connection with the target, they start to request money, usually by way of travel expenses, healthcare costs and gift cards. In some scams, victims have also been pushed into fraudulent investments, including in cryptocurrencies.

Funeral Scams

There are two types of funeral scams. In the first one, scammers attend the funeral service of a complete stranger, claiming the deceased had an outstanding debt with them. The scammers then ask the relatives to settle the fake debt.  

In the second type of funeral scam, fraudsters takes advantage of family members’ unfamiliarity with the cost of funeral services by adding unnecessary costs to the bill.

Investment Schemes Fraud

Retirees often spend a lot of time selecting an efficient investment to park their investment funds, and this makes them easy targets. Scammers, who pose as financial advisors, offer lucrative investment schemes in an effort to extract fake transaction fees, as well as steal their investment money.

Over the years, several cases have been reported of fraudsters using Ponzi schemes, illegitimate bonds and certificates of deposits (CDs), Charitable gift annuities, Prime bank scams and more to lure in their targets.

Homeowner And Reverse Mortgage Scams

Scammers target retirees who own a home and are looking to make a reliable and steady income from it. They look for elderly with "For Rent" signs or ads, and then claim to offer help in getting tenants. In reality, however, they try to dupe the homeowner by stealing their money, or even committing deed fraud.

Separately, scammers also target seniors looking to use a reverse mortgage to avoid foreclosure. They target the elderly with false claims of fast approval on loans in exchange for some sort of fee.

There have also been cases when fraudsters visit retirees’ homes to offer free consultations. They encourage the homeowner to take out a reverse mortgage and pay for expensive and unnecessary repairs or home "updates."

Telemarketing

Scammers use fake telemarketing calls to lure older people, who are more likely to make purchases over the phone. Usually, the fake call claims to be from a company or group that retirees know and trust, such as a bank, government organization, or even companies like Netflix.

Over the call, scammers try to steal personal information or any other relevant financial account information from retirees. These scams are hard to trace as there is no face-to-face interaction and no paper trail.

Internet Fraud

Lack of internet awareness also makes older adults easier targets for automated Internet scams. Scammers, for instance, use pop-ups posing as fake anti-virus programs to fool victims into downloading a virus that steals vital information from the person's computer.

Also, older adults fall prey to email messages that appear to be from a legitimate company or institution, such as the IRS.  The emails ask the target to “update” or “verify” their personal information, but when they click the provided link, it installs a virus that steals vital information from their device.