From AARP —
AARP report reveals that criminals are targeting older Americans at record rates
The financial exploitation of older adults was a serious problem before the pandemic, but it’s ballooned in the years since COVID-19 began its rapid spread in March 2020. A new report from AARP finds that the rate of such exploitation between then and now has more than doubled.
That includes a huge uptick in losses from romance scams, with perpetrators stealing more than $547 million in 2021, five times greater than the amount stolen in 2019.
And these figures probably understate the number of financial fraud incidents, which are woefully underreported: Only 1 in 44 older adult victims tell the authorities when they’ve been financially exploited, according to the report. And they’re least likely to notify authorities when they’ve been victimized by someone they know and trust — something that happens more commonly than many people may realize.
Other increasingly common crimes include:
- Thefts from users of peer-to-peer (P2P) payment apps — the increasingly popular electronic money transfer apps such as Zelle and Venmo. P2P fraud complaints doubled during the pandemic. Your funds in these accounts are not insured by the Federal Deposit Insurance Corporation, and if you transmit money to the wrong person (easy to do if they have an @username handle similar to that of a legitimate person or entity) you have no way to get it back. A criminal might pose as someone’s bank, for instance, and request payment through a P2P app.
- Smishing — phishing by text where criminals pretend to be legitimate businesses, such as banks, in order to find out personal information to perpetrate fraud or extract money directly. Smishing attempts increased 58 percent in the U.S. in 2021 (meanwhile, in the United Kingdom they increased a stunning 700 percent in the first six months of 2021 compared with the previous six months).
Why financial exploitation has flourished
The report’s authors surmise that the growth in financial exploitation during the pandemic is related to:
Tech evolution and reliance. Americans increasingly rely on technology to limit face-to-face transactions, which offers criminals new avenues for theft. And because it’s evolving so quickly, it can be difficult for people to keep up, leaving them vulnerable to misinformation and scams.
Isolation. With less frequent interactions, loved ones may be less likely to notice signs of financial abuse. It also might make someone more dependent on others for assistance with daily tasks, including the management of their finances.
Loneliness. An older person who feels lonely due to that increased isolation or the death of a loved one from COVID-19 (or another cause) might be more receptive to a criminal who pretends to care about them.
How to stop the criminals
Financial institutions are on the front lines in the fight against exploitation, in many cases using fraud detection software, artificial intelligence and machine learning to monitor accounts. And AARP’s BankSafe™ initiative offers tools to help the banking industry curb these crimes — including an online training program that teaches employees how to spot instances of exploitation.
AARP is also encouraging banks to offer opt-in features that allow customers to identify a trusted contact, limit trusted contacts’ privileges on accounts, restrict cash withdrawal amounts, and set up third-party monitoring and alerts about suspicious activity. Because it is often difficult to get money back after it has left the account, AARP also urges banks to train their employees to delay transactions, or reject them in certain cases. Temporarily freezing accounts with suspicious activity is another effective intervention.
Gunther says continued consumer education and increased industry efforts are crucial for protecting people from financial exploitation: “It’s time for all of us to double down on keeping ourselves and our older adults safe.”
Continue reading at AARP.org.