Financial fraud targeting elderly parents is an organized crime

This month, the U.S. Senate Select Committee on Aging held a hearing to combat financial fraud against the elderly. It is titled Fighting fraud: how fraudsters steal from the elderly.

Ranking Member Senator Braun said Medicare fraud alone cost taxpayers $60 billion in 2023. The committee explored in depth the broad topic of elder financial abuse and solutions.

Here at AgingParents.com, where we witness the vulnerability of seniors and regularly hear about our clients’ aging parents being scammed, we’re glad to see the Senate paying attention. There was testimony from various qualified witnesses at the hearing, which is on the record. Among them was Kathy Stokes, director of the AARP Fraud Watch Network fraud prevention programs.

His testimony explained something that has colored society’s perception of victims of fraud, in that the victim is often accused of “being had.” However, Ms. Stokes clarified that AARP’s own research findings, begun decades ago, tell us that it is not the victim’s fault. AARP exposed what criminal scammers call “putting their targets under the ether.” They have known since the dawn of time that “triggering a heightened emotional state means bypassing logical thinking – that’s how our brains work.” We cannot stop or control some sort of automatic response when we feel unsafe. This is exactly what scammers do: make their targets believe that danger threatens them or someone they love.

The scale of criminal networks

Ms Stokes’ testimony revealed how widespread and organized criminals are. They know that older people are likely to have more wealth than younger people, after working and saving their entire lives or owning a home. She explained how transnational criminal networks work. They have corporate offices. They use enslaved prisoners to force front-line crooks to do their dirty work. They obtain lead lists, hacked data from banks, hotels and many other sources and teach the prisoners working for them how to turn a fraud target into a fraud victim using a playbook AARP research found that identification fraud alone cost Americans $43 billion in 2023.

How Criminals Use AI to Be More Effective

It used to be that you could tell if an email supposedly from your bank or financial institution was fake because of misspelled words. Or if you receive a phone call claiming to be from a family member, but their voice is different, you would be suspicious. But now, fraudsters are already leveraging AI to turn grammatically incorrect emails and texts into perfectly written, convincing messages. It is used to create fake realistic photos, videos and websites designed to make the target believe they are real.

Ms Stokes testified that AI is like the industrial revolution for fraudsters. This allows them to make it more difficult to detect all possible scams. This is all the more reason for us to be vigilant when we know how they work. And it’s imperative that anyone with an aging loved one in your family takes responsibility for informing them as best as possible about the warning signs.

Common fraud tactics include tech support scam. The consumer receives a message indicating that their computer has been hacked. The fraudsters then trick them into giving access to all their financial data and the consumer’s money is stolen. The same type of evil is found in the bank imposter scam. Someone calls, texts, or emails the bank customer to inform them that their account has a fraud report. The scammer uses this to trick the customer into giving up their passwords and other data. Once received, the customer’s money disappears immediately. Many other common scams abound. The hearing provided numerous resources available to the public to increase awareness and encourage protective measures.

How can we fight fraud

Based on the testimony at the hearing, suggestions were put forward. We can all do the following, regardless of our age. Scammers target everyone, not just seniors.

1. Freeze credit with credit reporting agencies. You can unblock it if you need it at any time.

2. Use a password manager and multi-factor authentication for your online accounts.

3. Shred your financial documents, invoices and other identifying correspondence.

4. Keep your device’s operating systems up to date to protect against known vulnerabilities. Outdated systems on your computer or phone are more easily hacked.

5. Never respond to incoming messages from unknown people.

6. Talk about the latest information on scams and the devious methods used by these criminals. Help elderly parents understand how scammers can approach anyone in a variety of ways.

The more we talk about these scams, the better protected we will be. Families need to help their vulnerable elders understand how vigilant they need to be to stay safe.