Senior scams are on the rise — and banks and businesses can’t turn a blind eye

By Steve Cohen 

Jeffrey Maas thought he was being a good citizen, helping to fix a mistake that he was told was going to ruin someone’s career. His naivete led him into a common scam that cost him most of his life savings.

Maas, a 76-year-old retiree living in New Jersey, read the e-mail that millions of people have received: “Thank you for your order of Norton anti-virus software … for $691.85…If you would like to confirm or cancel this subscription, please call…”

Unfortunately, Maas did call to cancel the subscription he never ordered – and got sucked into a scheme that cost him hundreds of thousands of dollars. He was not alone: the FBI estimates that the “phantom hacker/courier scheme costs Americans — most of them senior citizens — more than $500 million annually. And sadly, that estimate is probably woefully understated, because most people are too embarrassed to admit they have been taken, and never report it to authorities.

Scams targeting senior citizens take many forms, including Medicare scams, “grandparent” schemes and more. WavebreakmediaMicro – stock.adobe.com

Jeffrey Maas is one of the very few victims willing to publicly admit they were taken.  And he is trying to help keep others from falling for such schemes: He identified one of the (low-level) scammers who was arrested and indicted. Maas has filed a civil lawsuit, not just against the conmen but against a major regional bank and a precious-metals-coin dealer who helped enable it.

Scams targeting senior citizens take many forms.

There are Medicare scams that get seniors to turn over personal information in exchange for “free” or unneeded medical equipment.

There are “grandparent” schemes that use texts or cloned voices supposedly from grandchildren who are in trouble and need bail money wired immediately; lottery scams that require the “winner” to first transfer taxes or fees prior to getting their prize; romance scams where fraudsters build fake relationships — often just online — over weeks or months, and then request money for emergencies, travel, or medical bills;  and IRS impersonation scams where “agents” threaten arrest for unpaid taxes unless immediate payment is made via gift cards or wire transfer.

Senior citizens are more likely to get scammed because they might not understand technology. Ezequiel MartÃÂnez – stock.adobe.com

While the scams take many forms and have numerous variations, there are some common denominators.  They target older adults who are less tech-savvy, perhaps more trusting, more gullible, but certainly more likely to fall for the scam — and lose more money — than their younger counterparts.  The AARP reports that people in their 70s reported a median loss of $1,000 per fraud incident, compared to a median of $417 for those in their 20s. Those in their 70s also reported losing a median of $20,000 to investment scams, versus $1,551 for victims in their 20s.  Sadly, the FBI estimates that Americans lost $4.9 billion to scams in 2024, up 43% from the year earlier.

Exactly why the problem is getting worse is unclear. Perhaps the scammers are becoming more sophisticated; or there are just more of them. Another reason may be that companies which are supposed to have processes in place to help protect the elderly either do not or are simply not following them. 

Those in their 70s also reported losing a median of $20,000 to investment scams, versus $1,551 for victims in their 20s. tan4ikk – stock.adobe.com

That’s what happened to Maas. After being convinced by the scammers that his bank account had been erroneously credited with several hundred thousand dollars — and the “proof” was eerily credible — they then convinced him that the only way he could return the money without causing the person who made the error to lose his job was to deliver gold coins to a certified messenger.

In retrospect, this “solution” was obviously preposterous, and Maas realized that just as he handed over a second tranche of coins — and then snapped a photo of the courier’s license plate. But in the moment, it seemed reasonable, and Maas was conned.  

As part of one scam, victims were told to deliver gold coins to a certified messenger. Thicha – stock.adobe.com

There were multiple checkpoints throughout the con where others could have intervened but didn’t. Maas had been instructed to go to his local bank and wire money to one of several precious-metal-coin companies recommended by the scammers. At the bank, Maas told the banker he wanted to wire nearly his entire life savings to the coin company — and all the while was on an open phone call with the scammer. The banker did not ask a single question of this obviously distressed, elderly man, such as,  “Why are you doing this? Did you get financial advice? Who is on the phone?”

Similarly, the coin company owner never asked him a single question. And here too, Maas was on an open phone call with the scammer. But perhaps most remarkably, this whole scheme happened twice — two days in a row — because the scammers knew they had a live fish on the line. And no one who could have stopped it — or even slowed it down — was doing anything. They were just treating it as business-as-usual.

To cut down on senior scams, businesses need to do more than the bare minimum to ensure that each transaction is sound. Liubomir – stock.adobe.com

Banks — and to a smaller extent coin companies — have a responsibility to know their customers and take precautions to prevent what is known in their industries as elder financial exploitation. There are federal regulations — about staff training and procedures — and specific red flags that employees are supposed to be on the lookout for. One is whether the elderly customer is taking directions from someone with whom they are speaking on a cellphone. In addition to the federal regulations, there are New Jersey statutes designed to help protect seniors. None of them were followed.

A judge and jury will determine whether the bank and coin company were negligent in Maas’ case. And a different jury will determine if the courier or anyone else was criminally liable. Until then, we need to get banks and coin companies to stop being complacent and helping to enable these scams. They need to slow down these transactions — even by a few minutes — and ask a few questions. Such delays won’t hobble the economy, and they might help save other seniors from the financial and emotional harms Maas has suffered. Criminals may be driving these scams, but lazy companies willing to look the other way are making them possible.

Steve Cohen is an attorney at Pollock Cohen LLP.

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Senior scams are on the rise — and banks and businesses can’t turn a blind eye 

Senior Scams Are More Sophisticated Than Ever. How to Protect People You Care About.

By Steve Garmhausen 

Financial exploitation of the elderly is nothing new: From the theft of Social Security checks to mail fraud schemes to romance scams, reprobates have long used their victims’ social isolation, loneliness, and cognitive decline to separate them from their money. Digital technology is making seniors more vulnerable than ever, says Adam Frank, head of wealth planning and advice at J.P. Morgan

JPM+0.70%  Wealth Management, who with his team recently wrote a white paper on senior exploitation.

 Using fake caller IDs and delivering increasingly legitimate-looking emails, scammers are harnessing modern technology for nefarious ends, says Frank, and the rise of artificial intelligence is likely to make it all worse. “The rise of AI is, for me, the most frightening aspect of all of this,” he says. 

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Senior Scams Are More Sophisticated Than Ever. How to Protect People You Care About.

Number Of Suspected Senior Scams Escalate

Fraudsters are increasingly trying to take financial advantage of the elderly, according to the U.S. Treasury Department, even as more protective measures are taken to protect seniors.

The Treasury Department said it received 24,454 reports from banks of suspected financial abuse of their elderly clients last year, double the number received five years ago and a 12% increase for the year. Banks are required to report suspected financial abuse.

The dramatic increase is probably attributable to both a rise in the number of scams and an increase in awareness and reporting, said Brie Williams, head of practice management at State Street Global Advisors, based in Boston.

“There is a louder voice in the media now about protecting the most vulnerable citizens,” Williams said. Federal and state legislation and regulations are being passed to help protect seniors from fraud and protect advisors and financial institutions from lawsuits if they report suspected financial abuse, she added.

The Government Accountability Office said seniors lose an estimated $2.9 billion annually from financial fraud. But the actual number is probably higher because fraud is an underreported crime—some victims don’t report it because they are embarrassed to have been a victim.

“As the population transfers from the workforce to retirement, too often elder investors are taken advantage of,” Williams said. “They are in a more vulnerable situation and may experience diminished capacities,” which increase the possibility of fraud. “But this is an opportunity for advisors to be more proactive.”

The Senior Safe Act passed last summer prevents advisors and financial institutions from being held liable for reporting suspected financial abuse to law enforcement or regulatory agencies. The new law also encourages firms and institutions to provide training for employees in how to spot financial abuse and what to do when they have suspicions. Many banks now have training courses and videos for employees to raise awareness.

In February, the Financial Industry Regulatory Authority adopted two new regulations that address the senior fraud issue.

Rule 2165 allows banks to place a temporary hold on disbursements from accounts if an employee suspects the account holder is being duped. Rule 4512 requires advisory firms and banks to make a reasonable effort to obtain the name of and contact information for a trusted contact of clients.

Williams said there are telltale signs of clients experiencing diminished mental capacity that advisors should be aware of, such as when clients forget information or they have problems keeping up with financial details.

“Advisors now are reaching out to the trusted contacts of their clients when they see the warning signs,” she said. “It also is important for advisors to be aware of how to educate clients’ families on what to look for. The family members will see first if the person has trouble with basic math or has mail piled up.

“We, as advisors, have a fiduciary duty to do the right thing in these situations,” Williams said. “This is a global challenge, and it is an emotional, as well as financial, problem for the client. Education of the client is the first step because fraud can have a devastating impact on the client’s financial plan.”

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Number Of Suspected Senior Scams Escalate

Senior Scams: A 'New Friend' May Signal a Big Problem

Your elderly mother has a new best friend who accompanies her everywhere. She has always been frugal but now lavishes pricey gifts on her new pal. And although you used to speak with her every few days, she never seems to answer your calls anymore. 

Are these simply the signs of a senior living it up in her later years? Or is something sinister happening? Those are the difficult questions that can arise in cases of “undue influence,” in which a perpetrator takes advantage of his position of trust or power to gain control over the victim's decision-making, usually to line his own pockets. The perpetrator could be a new “best friend,” financial adviser, adult child or someone else close to the victim. And while anyone can fall victim to undue influence, those most vulnerable include older, more isolated individuals.

Undue influence plays a role in many–if not most–cases of financial abuse, says Dr. Bennett Blum, a physician specializing in forensic and geriatric psychiatry who serves as an expert witness in elder abuse cases. Seniors lose about $6.7 billion a year to family members, friends, caregivers, financial advisers or other trusted associates who exploit their roles for financial gain, according to a report by San Francisco financial-services firm True Link Financial.

The problem is growing, elder abuse experts say, as the population ages. And it may be far greater than any statistics can demonstrate. “At best, 80% of cases are never reported to anyone–and at worst, 95%,” Blum says. In many cases, victims are only manipulated, rather than threatened or coerced, so they don't even realize they're victims. And if they do realize what's happening, they may be hesitant to speak up for fear of retribution from the perpetrator–or fear that government authorities or family members will think they can no longer take care of themselves, Blum says.

As concern over the issue grows, new rules may help prevent some of the financial fallout. Financial Industry Regulatory Authority rules that took effect this year, for example, require brokers to ask clients for the name of a trusted person they can contact and allow them to place a temporary hold on disbursements from an older client's account if they suspect the client is a victim of financial exploitation.

Such rules, of course, can't prevent every case of undue influence. John Waszolek was a broker at UBS when one of his elderly clients, a widow, was diagnosed with Alzheimer's disease in 2008. Shortly thereafter, Waszolek took the client to meet an estate-planning lawyer who prepared a health care power of attorney and living will naming Waszolek as the widow's agent, according to a 2015 FINRA complaint against Waszolek. In 2009, the complaint alleges, Waszolek referred the client to a second attorney, who prepared an amendment to her trust, naming Waszolek as beneficiary of about $1.3 million in trust assets. When Waszolek later went to work for Morgan Stanley, the widow's trust account moved with him–and after her death in 2010, Waszolek attempted to collect the cash, which by that time had grown to about $1.8 million, according to the complaint.

He didn't succeed. The trustee refused to distribute the cash without Morgan Stanley's approval–and Morgan Stanley did not approve, according to FINRA. In 2015, without admitting or denying the allegations, Waszolek consented to a settlement that barred him from the industry. He did not respond to our request for comment.

Safeguards to Help Thwart Senior Scammers

How can seniors and their loved ones prevent such a scenario? One defense is to stay connected, says Lisa Nerenberg, executive director of the California Elder Justice Coalition. If a loved one suddenly withdraws from social circles, or someone seems to be interfering–such as a caregiver telling visitors that the senior doesn't want to see them–that's a red flag, she says.

Watch for other changes in behavior, such as when someone who has always been cautious with money suddenly starts doling out large gifts. Be particularly vigilant if a senior has just lost a spouse. “There are scammers who follow death announcements” and try to befriend survivors, Nerenberg says.

Another preventive step: Create some checks and balances if you're asking other people to help manage your money as you age. When designating a financial power of attorney, for example, you can name two people to serve together–perhaps one family member and one trusted adviser, says Hyman Darling, an elder law attorney in Springfield, Mass. If someone is helping you with day-to-day money management, regularly review your bank and brokerage statements for any unusual transactions. Online services may help. EverSafe , for example, helps monitor financial accounts for changes in spending patterns or suspicious activity, and you can name a trusted friend or adviser to help you keep tabs on your accounts.

If you suspect a senior is falling victim to undue influence, try enlisting the help of a friend or relative whom the senior really trusts, Nerenberg says. Even when questioned by caring friends, the senior may deny anything is wrong and defend the influencer. If you're concerned the senior is being abused, report the issue to Adult Protective Services.

The growing prevalence of undue influence raises another issue for seniors who are not victims of abuse: False accusations of undue influence can derail your estate plan. Let's say your adult daughter quits her job to become your primary caregiver. You had originally intended to divide your estate equally between your daughter and son, but given your daughter's sacrifice, you later change your will to give her a bigger piece of the pie. Nobody has done anything wrong–but after you're gone, your son contests your will, claiming your daughter had undue influence over you.

Such issues can arise if seniors don't communicate their intentions when changing their estate plans, says Thomas West, partner at Signature Estate and Investment Advisors, in Tysons Corner, Va. “Make sure all the affected parties know what the decision is and how it was arrived at,” West says. In addition to discussing your decision with your heirs, you might include a brief explanation in your will and a longer explanation in a letter to your executor. In any case, West says, “try not to make it a secret.”

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Senior Scams: A 'New Friend' May Signal a Big Problem

Caregivers at Risk of Financial Fraud, Scams Targeting Elderly

Elder financial abuse and fraud is typically underreported and costs older Americans $36.5 billion per year, according to research from retirement robo-adviser firm True Link.

And it doesn’t just harm retirees and seniors, but also those who take care of them, as elder financial abuse has a profound financial impact on the caregivers of those who are victimized -- and can have a negative impact on their ability to save for their own retirement, according to a new study from Allianz Life Insurance Company of North America.

“As America’s population ages, more people will be caregivers,” said Allianz Life President and CEO Walter White. “Unfortunately, these caregivers will be at risk of experiencing the negative effects of elder financial abuse perpetrated against the person they’re caring for. While a focus on protecting seniors from financial exploitation is vital, we also need to provide resources to caregivers who increasingly will become collateral victims of the elder abuse.”

Katie Libbe, vice president of Consumer Insights for Allianz Life Insurance Company of North America, discussed the study with Fox Business and offered tips on how caregivers can protect themselves.

Boomer: Why are caregivers likely to experience a financial impact when their loved one is a victim of financial abuse?

Libbe: It is well established that elder financial abuse has a significant effect on the finances of elder victims. In fact, our recent Safeguarding Our Seniors Study found that each incident costs them an average of $36,000. Perhaps more surprising, however, is that this abuse has equally negative effects on the finances of caregivers, also costing them $36,000 on average.

Although we were surprised that this number was so high, it’s understandable given the responsibility caregivers feel to protect their elders and help manage all aspects of their lives, including finances.

Three-quarters of current caregivers in the study said that providing care for their elder is almost like a full time job, so it’s logical that caregivers would take on a great deal of the financial burden necessary to help make their elder whole again after a financial abuse incident.

Boomer: Why are those providing care for past victims spending more than those caring for elders with no history of financial abuse?

Libbe: Even without any history of financial abuse, we know that caregiving is expensive. The study found that the average caregiver spends more than $7,000 per year and provides more than 10 hours per week in noncash support (driving to appointments, paying for groceries and supplies, delivering meals, social engagement, etc.). Furthermore, less than half of current caregivers receive some form of financial assistance for that support.

When you add a calamity like elder financial abuse to this equation, it’s important to understand that the elder is now behind the eight ball, facing an uphill battle to stay afloat and manage daily expenses. So, it stands to reason that meeting financial obligations may be more difficult as that elder tries to dig themselves out of the financial hole that they’ve created. As a result, it’s common for caregivers to spend more – 56 percent, or $3,000 more each year on average – than caregivers caring for elders with no history of financial abuse.

Boomer: What drives the cost of care for these seniors that have been abused?

Libbe: In cases where the elder is a past victim, the need for those elders to receive some sort of direct financial assistance from their caregiver is more than double that of situations where financial abuse has not occurred. It’s difficult to say exactly what is driving these costs, but it’s safe to assume that it takes a significant amount of time, effort and money to get a past victim back to square one.

Another unfortunate aspect of elder financial abuse is that once a victim is on the radar of an abuser, that elder is very likely to be targeted again. In fact, four in 10 of the caregivers in our study confirmed that their elder has experienced financial abuse more than once. This is bound to have an effect on overall cost of care, putting both the elder and the caregiver in a more precarious financial position.

Boomer: How does caring for victims impact the caregiver’s ability to save for their own retirement?

Libbe: Two-thirds of active caregivers said the cost of providing care is having a significant effect on their finances, and they worry about having enough money to retire. As noted before, these caregivers feel a tremendous responsibility to manage every aspect of their elders’ lives, to the point that the vast majority say they’re often overwhelmed by the task. It’s also quite possible that caregiving is impacting their ability to work full time, which will have a negative effect on their retirement savings.

Once again, when past elder financial abuse is part of the equation, that anxiety is even greater. Nearly 80 percent of caregivers responsible for a past victim indicated concern about the effect caregiving is having on both their current finances and their retirement savings.

In addition, this financial stress has created a moral gray area that many caregivers are constantly struggling to reconcile. Although the majority of current caregivers agree that it’s okay to accept some of the elder’s money to cover expenses, if offered, significantly fewer agree that it’s okay for a caregiver to reimburse themselves for any expenses without informing the elder every time.

Boomer: What can caregiver’s do to better protect their financial security in retirement?

Libbe: There are three essential steps that caregivers should take to protect their own financial security in retirement: 1) Start planning now and build your emergency fund; 2) Make sure you understand your elder’s health insurance ; and 3) Talk to your elder about their finances, including a third party in the discussion.

If you are a caregiver now or know you will likely be one in the future, it’s crucial to have a long term financial plan that addresses your role as caregiver and the budget necessary to fulfill that role for as long as necessary. But, as our study reveals, it’s probably not enough to save only for expected costs. Boosting your emergency fund is a good idea in order to help deal with the unexpected, including the fallout from elder financial abuse.

In addition to understanding their own finances, it’s crucial that caregivers understand their elder’s health insurance and everything that Medicare covers. It may be possible to qualify for respite care or home health care under Medicare, which could provide significant cost savings. The good news is that more than 90 percent of current caregivers in the study said they were confident in understanding health insurance and Medicare rules.

Another smart move is for caregivers to begin having discussions with their elder about their finances – today. Seven in 10 caregivers are currently talking to their elder about financial abuse and scams, but many feel these discussions are challenging. As a result, they are hesitant to have frequent conversations for a variety of reasons, including the belief that it’s none of their business, feeling that the elder is capable of managing their own finances, or belief that it makes the elder uncomfortable.

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Caregivers at Risk of Financial Fraud, Scams Targeting Elderly

Scams Targeting Older Adults on the Rise: Report

Scam artists target all types of people: men, women, young people and senior citizens. A new report from the Senate Aging Committee zeroes in on the top scams victimizing our parents and grandparents.

Number one on the list: IRS impersonations.

That was followed by sweepstakes scams, robocalls, computer scams, financial abuse, grandparent scams, romance scams, government grant scams, check fraud and identity theft.

In 2016, the most scam reports came from Maine with 800 reports.

Texas had 271 reports.

The Senate Aging Committee says knowing about the reports is key to fighting these scams. That's why they have a "fraud hotline." More than 2,200 calls were made last year.

If you think you are a victim of fraud, report it to the hotline at 1-855-303-9470. They can offer tips on how to avoid becoming a victim.

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Scams Targeting Older Adults on the Rise: Report

New legislation to fight senior scams

CHEEKTOWAGA, N.Y. (WKBW) - It is a complaint that law enforcement is hearing more often: seniors becoming the victim of scams and fraud.  The criminal actions have also left countless seniors in financial distress with tens of thousands of seniors in New York affected every year.

Friday morning, U.S. Senator Kirsten Gillibrand was at the Cheektowaga Senior Center to announce new legislation that she is introducing in the 115th Congress that would help deal with the problem.

Called the "Senior Financial Empowerment Act," the proposed legislation would improve the way elder financial abuse is reported among agencies, establish a national hotline on how and where seniors can report fraud, and provide more resources to combat the problem before it happens.

John Flynn, Erie County's newly elected district attorney, said currently in Erie County the most popular scam is people calling pretending to be relatives in crisis needing money.

Flynn encourages seniors to never send cash or share banking information, including social security numbers, over the phone.

More information about preventing senior scams is available on the Better Business Bureau website https://www.bbb.org/wisconsin/programs-services/savvy-senior-scam-center/

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New legislation to fight senior scams