Wellahead blog

The Top 5 Elder Financial Scams of 2023 and How to Spot Them

Amy Johnson
Reviewed by
Marcie Rogo
November 7, 2023

According to the Federal Bureau of Investigation (FBI), older adults are currently scammed out of more than $3 billion each year. Given how many scams go unreported by seniors, however, the Federal Trade Commission (FTC) estimates that number is likely closer to a staggering $48 billion. The numbers are also climbing annually, up a whopping 84% between 2021 and 2022. This leap is partly due to an astonishing rise in cryptocurrency fraud, which increased 350% in the same period, across all types of scams. 

An Unprecedented Increase in Scams

There are several reasons for these disturbing numbers. Older adults often have more money saved up than younger Americans, so criminals can often scam more cash out of someone over 65. In fact, the average loss of a senior targeted by a scammer is $35,101. Victims over the age of 80 report even higher losses. While it might seem that younger folks are savvier about scams, they are actually targeted in different ways and tend to lose less money overall.

Paradoxically, older adults’ wariness of risks to their savings increase their vulnerability to crimes like tech support and government impostor scams, which take advantage of that concern. The COVID pandemic only increased older adults’ susceptibility to online scams, which took advantage of any unfamiliarity or discomfort with technology and everyone’s pandemic-induced unease. 

Regardless of technique, the goal of a scammer is always to separate you from your money, usually by scaring you or making false promises that motivate you to divulge personal information, like a Social Security or bank account number, or to move large sums of your savings in order to keep it “safe” or (allegedly) help a family member with an emergency. To make a scam seem legitimate, criminals may actually send their victims money first.

Elder Scam Losses Are Unlikely to be Recouped

Unlike fraudulent credit or debit card charges, which can frequently be reimbursed, it can be extremely difficult to recoup money that you’ve sent to someone who turns out to be a scammer. One reason for this is that scammers encourage their victims to initiate the transactions themselves. Such transactions are usually considered authorized, even if you’ve been tricked into making them. Another reason is that scammers utilize payment methods that are harder to track and/or don’t have robust legal consumer protections, like wire transfers or cryptocurrency. 

We’ll take a look at the top five financial scams targeting seniors in 2023, and then some guidelines on how to keep your personal information and your money safe.

  1. Impostor scams
  2. Tech support scams
  3. Romance scams
  4. One-time-passcode scams
  5. Delivery and wrong number scams

1. Impostor scams

Impostor scams are many and varied, but the blueprint is the same. A scammer gets in touch with a potential victim—often by phone, but also via email or text—and pretends to be a government official, a bank employee, or a family member. The scammer tells the potential victim that their personal information, their money, or a grandchild is in danger and they must act immediately to safeguard the information, savings, or loved one. 

Government impostors may pose as IRS agents who insist that you owe taxes and, if you don’t pay them, that you could be arrested or subject to other legal unpleasantnesses. The goal is to get you to send money or provide sensitive personal information that will enable the hacking of your financial information. Someone pretending to work for the Social Security Administration might announce that your Social Security number or benefits have been suspended or linked to criminal activity, or that you are eligible for an increase in benefits. You’ll be asked to verify information that will then be used to access your accounts. 

Fake bank employees may suggest that you need to wire money somewhere safe, buy prepaid cards or gift cards, get a cashier’s check, or transfer your savings into cryptocurrency. Or the impostor may call about a problem with your account, telling you they are emailing or texting a one-time passcode (OTP) so that you can log in to your account, and ask you to read that code back to them for verification. The criminal’s own attempt to log in to your account will trigger the bank to send you the code. Giving it to an impostor hands them full access to your accounts.

Family impostors may pose via text or email, sometimes even by phone, as beloved grandchildren or other family members. They may create an online profile that appears to belong to the family member or even hack into legitimate email or social media accounts. The scam usually claims that the individual is in desperate need of money after an emergency of some kind, perhaps somewhere far away (to discourage you from checking up on their story). With new AI technology, scammers can now use existing voice recordings, like voicemail, to exactly mimic a family member’s voice. 

Keep in mind that criminals posing as legitimate actors like IRS agents, Social Security Administration or bank employees may be working with other scammers posing as tech support at companies like Microsoft, to facilitate stealing your money or information and increase the likelihood of the scam succeeding.

2. Tech support scams

Tech support scams are a variation (or continuation) of the impostor scam, and according to the FBI, they increased by about 20% between 2021 and 2022. Most often, they start on your computer with an alarming pop-up message telling you your computer has a virus or has been hacked. The message may use legitimate-looking logos of trusted brands. You will be told you must act immediately. Clicking on a link may download malware to your computer or connect you with a scammer pretending to be tech support—often at a well-known company like Microsoft or Apple. In addition to stealing information or getting you to send money, a tech support scammer may ask for remote access to your computer to remove the alleged virus. Once in your computer, a hacker will have access to anything on it, including saved passwords.

3. Romance scams

According to Consumer Affairs, romance scams robbed Americans of $304 million in 2020, the highest number recorded thus far, making these scams the leading cause of financial loss due to fraud across all age groups. 

A romance scammer creates a fake profile on a dating site or on social media—including platforms like LinkedIn—and then reaches out to potential victims, developing a relationship through online chats and texting. (You might even get a “wrong number” text that then develops into an online relationship.) Excuses are made for not being able to meet in person—a tactic made all the more believable by the pandemic. Eventually, the scammers ask for money, increasingly in the form of gift cards. 

4. One-time-passcode (OTP) scams

Some scammers are using automated programs called bots to trick people into sharing the two-factor authentication codes that legitimate companies and financial institutions send via text, email, or phone call. The bot will try to log in to your bank or other account, which triggers the legitimate entity to send you the two-factor authentication code. Then the scammer calls or their bot robocalls or sends you a text that appears to come from the bank or company. It may ask if a purchase or charge is yours—did you just authorize a $20,000 payment to a resort in Costa Rica?—and if it’s not, you’ll be instructed to enter the code you’ve just been sent. The authentication code then allows the criminal to log in to your account, draining a bank account or making unauthorized purchases.

5. Delivery and out-of-stock scams

Package delivery scams are on the rise as well. A scammer may text or call you, pretending to be a delivery driver who can’t find your house. The chances are high you are expecting something, and if not, the scammer might suggest someone has sent you a gift. Other versions of this scam include getting an email from what appears to be the United States Postal Service or other delivery service about rescheduling a delivery. The goal of this scam might be your personal information or getting you to click on a link that downloads a virus to your computer or phone, allowing the criminal access to your passwords and account information.

There are plenty of other scams to keep an eye out for—lottery and sweepstakes scams, investment scams, check-washing scams. If it’s worked before, scammers will use it again and again, updating and creatively adjusting to new technologies and world events. 

Fortunately, there are some pretty simple guidelines to keeping your information and your money safe from criminals who’d like to steal them. 

Why Scams Work

Criminals often try to overwhelm you into doing what they ask by insisting that there’s an urgent problem. This is sometimes called an “amygdala hijack,” referring to the part of the brain that responds to perceived threats. It produces the fight-or-flight response, which can make it hard to think clearly—presumably helpful if you’re being chased by a saber-toothed tiger, but counterproductive if you’re being targeted by an experienced scammer.

Representatives from the Social Security Administration won’t get in touch with you unless you’ve recently contacted them, nor will they ask for your Social Security number over the phone or threaten to have you arrested. Other warning signs: a caller warning that your Social Security number or your benefits will be suspended. 

Similarly, the IRS usually contacts people first via traditional mail, and agents will never ask for personal financial information like passwords or credit card numbers over the phone.

How to Stay Safe

The overarching guideline is simply: don’t give out information via email, text, or phone or click on links that come from unsolicited sources, regardless of how legitimate or urgent they seem. If you have any doubts that the sender of a text or email is legitimate, contact the company directly using a number or website that you know is legitimate (from the back of your bank card, for example). 

Here are some specific tips:

  • Don’t click on unsolicited computer pop-ups, or links or attachments in text messages and emails. Don’t call a phone number provided in a pop-up or unsolicited text or email. 
  • If you’re not sure about a call being legitimate, do an online search of the phone number. If it’s a scam, it will likely be listed on scam websites. 
  • Don’t download software from an unsolicited pop-up, link, or attachment, or someone that you don’t know. Don’t give an unknown person remote control of your computer in order fix a problem you didn’t know existed until they contacted you. Run up-to-date anti-virus software if you’re worried you’ve “caught” something from a dodgy link or attachment.
  • Never send money via wire transfer (especially to foreign accounts), cryptocurrency, gift or prepaid cards to someone you don’t know. Read more from the National Consumer Law Center about four payment methods that “virtually announce the transaction is a scam.”
  • Never share authentication codes in response to an unsolicited phone call or text, even if it appears to come from a legitimate company. 
  • Never share bank account information (routing and account numbers) in response to an unsolicited phone call, email, or text. This information can be used to siphon money directly from your account.
  • If you suspect a new friend or romantic interest isn’t genuine, you can try a reverse image search of pictures on a suspicious profile, which will often catch stock photos or images that have been “borrowed” from a legitimate profile.
  • If someone claims a family member needs money urgently, double-check the information. Ask them a question only that person would know. Try contacting that person directly or reach out to other family members who are likely to know about any potential emergencies.
  • If you’re unsure about any request for money or your personal information, run it by a trusted friend, family member. You can also do a quick internet search for potentially shady requests–often other potential victims have posted about attempted scams.
  • And if you haven’t already, put your number on the national Do Not Call registry. You can also verify your number is on the registry and report unwanted calls on the website.  

Curious about what scams are trending in your area? AARP has a Scam-Tracking Map; you can enter your location, and it will tell you what types of scams have been reported both to law enforcement and to AARP. The FTC has a Consumer Sentinel Network that tracks top fraud reports, trends, as well as refunds to consumers as a result of FTC reports, including where the money went and how much people got back. You can also check out their interactive Age and Fraud infographic, which identifies median loss, the number of fraud loss reports, and, helpfully, most common contact and payment method by age group and year. 

You’ve Been Scammed, Now What?

It’s both frightening and humiliating to have someone scam you out of money or con you into giving up personal information, but don’t let your embarrassment keep you from acting in your own best interest. Remember, millions of people have fallen victim to the same sophisticated scams. You have nothing to be ashamed or embarrassed about. That's why it's core to Wellahead's mission to vet every single financial provider we refer to, since it's often not obvious when an organization has unethical practices.

The Consumer Advice office of the Federal Trade Commission has a checklist of what to do, depending on the specifics of the scam. One thing you should absolutely do is report the fraud or attempted fraud to the FTC. The data will help the FTC make cases against scammers, spot trends, educate others at risk, and hopefully, improve the legal protections for consumers.

Get useful tips in your inbox

Thank you! You are now subscribed to our newsletter
Something went wrong, please try again

Let us help get the care you need

Have questions? Call or text (919) 230-2599 or email concierge@wellahead.co