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9 top financial scams targeting seniors and tips to avoid them

Use these helpful tips and advice to protect yourself, your aging parents or older loved ones against senior scams and financial fraud.

Unfortunately, there’s no shortage of con artists waiting to take advantage of aging adults in our families and communities. Scams aimed at seniors are rampant these days and can happen via the telephone, email, online (including social media accounts), snail mail or even right in your loved one’s home with people you thought you could trust. 

Older adults can be attractive targets because they often have cash from retirement funds and Social Security. And loneliness can be a factor too. They may be so glad to be talking on the phone with someone that they get tricked into donating to a charity that turns out to be fake or attending an “investment luncheon” just to get out of the house. 

Get to know the top financial scams targeting the elderly, and use these helpful tips and advice to protect yourself, your aging parents or older loved ones against senior scams and fraud tactics.

What top financial scams against seniors you need to know

The first, best defense against common scam activity and the modern thieves and scam artists behind it is knowing what can happen and being prepared for when it does. These are the top scams targeting seniors, the first five being the most commonly reported, according to a 2021 report from the U.S. Senate Special Committee on Aging.

1. Government impersonation scams

There are several variations on this type of popular scam. You get a call saying you owe the IRS back taxes or penalty fees or that your Social Security number has been suspended due to suspicious or criminal activity. Along with this comes threats of a lawsuit or an arrest if you don’t provide sensitive personal information by phone or pay money ASAP by certified check, wire transfer or gift card. In 2018, a new Medicare card scam popped up to watch out for, too.

Scam tip: Neither the IRS or Social Security Administration is going to call you to demand payment, banking or other personal information or threaten to send law enforcement to your house if you don’t. If you owe money, you’ll get a letter. The IRS provides more tips to spot scam phone calls.

2. Sweepstakes scams

In this classic scam, the person gets a phone call or email saying they’ve won or have been entered to win a prize — anything from the lottery to a brand new car — and they need to pay a fee to either collect the alleged winnings or up the odds of winning.

Scam tip: These tricksters often pressure you to wire money, put money on a prepaid debit card or send a check or money order using an overnight delivery or courier service. If you have to pay money, you didn’t win!

3. Illegal robocalls/unsolicited phone calls

Illegal robodialers can distribute pre-recorded messages or connect anyone who answers the call with a live person. They “spoof” their number, too, so it can appear to be a call from your local or other familiar area codes. Commonly, they pretend to be from a government agency, bank or other legitimate agency and ask to verify account or personal information, such as credit card numbers, bank accounts or Social Security numbers.

Scam tip: Easiest way to avoid these scams? Don’t answer calls from unknown numbers. The Federal Communications Commission (FCC) also advises that if you get an inquiry from a company or government agency seeking any type of personal information, don’t provide it. Instead, hang up and call the phone number on your account statement, or from the company’s or agency’s website, to confirm they need something. Find more safety tips on the FCC website.

4. Computer tech scams

In this scam, the target receives a call from someone falsely identifying themselves as tech support, often from a company like Microsoft, Apple or Dell, claiming your computer is infected with a virus. They might request personal information or credit card and bank account numbers to “bill” you for “fixing” the virus. Even sneakier, they can employ “pop-up” windows on your computer screen to trick you into giving them remote access control of your computer and then demand a “ransom” payment to regain control.

Scam tip: If you get a pop-up, don’t click any links, call a phone number or agree to send money by any means. Unless you made the original contact with a trusted party, don’t give anyone your financial information or control of your computer. If you suspect a tech scam, find more advice on the Federal Trade Commission (FTC) site.

5. Grandparent scams

There’s nothing like a grandparent’s love, and scammers have found a way to take advantage of it. These con artists may impersonate a family member, or a police officer, and tell victims that their grandchild has been detained or arrested, or is in serious legal trouble. The scammer asks the victim to help by sending money fast, often via wire transfer. After a payment, the fraudster often calls again requesting more money. 

Scam tip: If you get such a call, ask questions only your grandchild would know how to answer or make your own contact with purported authorities.  

6. Elder financial abuse/exploitation

According to the Government Accountability Office (GAO), elder abuse can take many forms including financial exploitation, which includes any illegal or improper use of an older adult’s funds, property or assets. In fact, according to a 2020 GAO report:

  • The costs of financial exploitation are estimated to be in the billions although comprehensive data does not exist.
  • $1.7 billion in actual losses and attempts at elder financial exploitation were reported by financial institutions nationwide in 2017.
  • Estimated financial exploitation costs could be more than $1 billion in each of three states alone — New York, Pennsylvania and Virginia — from 2016 to 2020.

Scam tip: Unfortunately, perpetrators of financial abuse can include anyone from strangers and judge-appointed guardians to caregivers and family members.

7. Romance scam/confidence fraud

The con behind “romance scams” involves contacting older adults online, through a chat room, online dating site, social media site or email, and then playing on their emotional vulnerability in order to gain trust. After a relationship is established, the caller’s circumstances change — they need money.

According to the 2021 U.S. Senate Special Committee on Aging report:

  • The FTC received 8,500 online romance fraud complaints in 2015, but those complaints topped 25,000 in 2019.
  • Romance scams reported to the FBI have resulted in one of the highest financial losses compared to other online fraud.
  • During the pandemic, there was a rise in the number of romance scams reported to the Committee’s fraud line.

Scam tip: Be cautious of someone who tells you they’re in love with you and cannot live without you … and needs you to send money.

8. COVID-19 scams

The same 2021 report, revealed that, during the COVID-19 pandemic, fraudsters continued to get creative, inventing new phone and online scams to offer vaccines, contact tracing, virus and antibody test kits, financial relief grants and even miracle cures. It doesn’t take long before the scammer then asks the person to wire money for processing fees or taxes.

Scam tip: If they called or contacted you and want your money or personal information, it’s probably a scam.

9. Identity theft

With personal information like a Social Security number, fraudsters can access a victim’s bank account, apply for credit, and even file for Medicare or Social Security benefits in their name.

Scam tip: Make it a rule — and make sure your older loved ones know — to never give out personal or payment information by phone, email or online if you haven’t initiated the contact or aren’t 100% sure who you are talking to.

How to protect aging loved ones from scams and fraud

Concerned about a parent or another older loved one? Take steps — and share these prevention tips, too — to help keep them safe from scammers:

  • Phone safety: Warn them about phone calls from people allegedly from charities or even the IRS. Tell them to just hang up and to never give out any account information unless they initiated the call.
  • Online safety: If they’re active online, talk to them about keeping computer passwords secret and not sharing other personal information (banking info, Social Security number) online or over email.
  • Financial safety: Review your parent’s bills and financial account statements regularly. To further protect a senior loved one, you can have an attorney draw up appropriate documents giving you financial power of attorney. This gives you access to their accounts, so you can keep an eye on any changes or suspicious activity in their accounts.
  • Caregiver safety: You should always be proactive when it comes to hiring a caregiver for your loved one and allowing them into your home, and that includes calling references and completing background checks. Follow these tips for safely hiring a caregiver.

How to spot financial abuse involving an older loved one

According to the National Adult Protective Services Association, some of signs of potential financial abuse include:

  • Unexplained disappearance of cash, valuable objects, financial statements.
  • Oversight of finances being surrendered to others without explanation or consent.
  • Assets being transferred to new “friends” assisting with finances.
  • Large cash withdrawals or checks written to “Cash.”
  • Confusion or improbable explanations surrounding current finances.
  • Giving away money or spending promiscuously.
  • Unexplained or unauthorized changes to wills or other estate documents.

When to report a senior scam or financial abuse

If you witness a life-threatening situation involving a senior or adult with disabilities, dial 911. 

If you suspect financial abuse by a caregiver or relative, contact Adult Protective Services, your state’s social service agency that investigates abuse and neglect of aging adults. Your local Area Agency on Aging is another good resource. If you or a loved one has been the victim of fraud (say, a fake IRS or lottery scam), alert your state attorney general’s office, your local FBI office or the Federal Trade Commission.