In recent years, Americans have experienced financial fraud at the highest levels in history, according to the latest Federal Trade Commission (FTC) data. For example, in 2022, fraud complaints to the agency rose 30 percent over the previous year, with consumers reporting more than $8.8 billion in losses.
People over age 60 experienced the most staggering losses, FBI data shows. Scams against seniors rose 84 percent from 2021, to $3.1 billion in losses, with the average loss reported at more than $35,000. The most common types of financial fraud committed against seniors were government impersonation and investment fraud, such as cryptocurrency-related crimes, according to the FBI.
Because this type of fraud is so widespread and can be so financially and emotionally devastating, families and friends of seniors are a critical first line of defense, says Tara Ambrose, senior manager of client risk prevention at RBC Wealth Management–U.S.
"Not only is it important to be able to recognize the signs and red flags of scams, but being able to step in and provide support and resources when a scam is happening can save your loved one from potentially losing their life savings and experiencing emotional damage," Ambrose says.
Why seniors are frequently targeted for financial fraud
There are several factors that make seniors a common target for financial fraud, Ambrose explains. One, she says, is that “people assume [seniors] have money, because they are retired."
Another reason is seniors may simply answer the phone more than younger generations.
"They'll listen to somebody or engage with them, because they think they have to, or they don't want to be rude," Ambrose says. Often, people committing fraud establish relationships with seniors, particularly those experiencing loneliness.
"They'll call daily to 'check on them,' sometimes communicating multiple times a day," explains Ambrose. "This can make it really hard to recognize that the scammer is manipulating them, and even harder to end the communication." This is particularly true in romance scams, where there is a significant amount of emotion involved. Seniors lost $419 million to these types of schemes in 2022, according to the FBI.
Yet another risk factor, Ambrose says, is that many seniors may be tempted by technology they don't fully understand. Scammers can alter caller IDs, use fake online profiles and host fraudulent websites. They can trick seniors into compromising their login credentials with one-time passcodes, or into funding a crypto wallet using an ATM or QR code.
Cryptocurrency investment schemes are particularly sophisticated. Scammers use economic uncertainty and political ideology to convince seniors that they need an alternative to the stock market. "The senior may think they're on a legitimate cryptocurrency trading site when it's actually a fake site that looks almost identical," Ambrose adds.
How to help seniors recover from financial exploitation
Ambrose knows from experience in working with defrauded seniors that most are afraid and embarrassed to tell their friends and families. So if you discover that a loved one has been impacted by fraud, it's essential to consider how you react and act toward them—a negative response could have a lasting effect on the outcome and their well-being.
There are better ways to address the incident than shaming or blaming the senior. Ultimately, your goal should be to let your senior know you're there to help them take steps to resolve the situation. Ambrose, who says that part of her role is to figure out how to successfully intervene in cases of fraud or scams, recommends several key ways to respond.
The best way to approach someone in this situation, Ambrose says, "is with empathy—not judgment." When you begin discussing the financial fraud, consider aspects such as timing and audience. Sometimes seniors engage better in the morning or in their home setting, especially if they're experiencing some cognitive decline.
Refrain from broaching the subject in front of others or confronting your loved one when they're on the phone with the scammer; Ambrose says that generally puts your loved one on the defensive. If the scammer overhears, it could trigger them to step up their pressure tactics, which in some cases could include threats.
When you talk to your loved one, try to remain calm and emphasize their well-being instead of focusing on the amount of money. Fraud can be stressful and emotionally damaging, so your loved one might feel powerless, hopeless and overwhelmed.
"In general, empathy simply works better than shaming or pressuring," says Ambrose.
Consider your language
Additionally, it's important to make sure you don't make your senior loved one feel incompetent while discussing their experience. "I tell clients to avoid the words 'elderly,' 'victim' and 'vulnerable,'" says Ambrose, because those are loaded words that can make people feel judged.
Also, consider your tone of voice in these conversations. Talking down to seniors or raising your voice may cause them to shut down or not tell you the entire story, Ambrose says. Encourage them to open up by emphasizing you're there to help them, not to take away their freedom or their access to their money, which can be a big fear for many seniors.
Use curiosity to get their story
It might be hard for your loved one to connect the dots and understand the scam, especially if they're experiencing cognitive issues. Try asking them how the fraud started and about any early warning signs they saw or perhaps ignored. Take a gentle approach to helping them identify those signs, so that they don't feel bad if they missed or dismissed them. Reacting this way may help stop them from talking to the scammer and avoid future fraud.
Provide genuine support
Sometimes, Ambrose says, it may take multiple conversations to get through to your loved one. So if they don't confide in you initially, try again another day in another setting, or try having someone else whom they trust try speaking to them as well.
Avoid threatening to take away the senior's independence. Instead, offer partnership and oversight to prevent them from experiencing additional financial harm. Continue to emphasize that they were a target of a crime, and place blame where it belongs: with the criminal.
Let your loved one know you're there to talk about their feelings resulting from the crime. If they do not want to talk about their feelings with you, encourage them to talk to someone else, such as a trusted friend or counselor.
Direct them to resources
Suggesting useful resources can provide seniors with a sense of control and help them move on with their lives. Start by helping them contact their bank and other financial institutions and advisors to report any fraud and get help recovering money where possible.
Also, encourage your loved one to report the scam to the proper authorities, such as the FTC or other federal agencies, depending on the crime. Suggest they contact their local police if the scammer threatened them or their loved ones, or if the fraud took place locally.
RBC Wealth Management offers a guide
You can also help your loved one sign up for alerts and find education offered by AARP or other organizations focused on helping seniors avoid scams and fraud.
The experience of being scammed can be traumatic for seniors. By being able to recognize the signs of what's happening and intervening with empathy and caring, you can be there to support them when they need it the most.