Protecting the Aging Population From Fraud

It’s no secret that fraudsters have few, if any, scruples. They are willing to lie to, swindle and cheat anyone who can give them money. As much as we would like to think that certain segments of society should be considered “off-limits” to bad actors, the opposite is normally true. No situation makes this quite as clear as the multitude of scams that target the aging population.

In her session, “Protecting the Aging and Vulnerable Population from Fraud in Uncertain Times,” at the 31st Annual ACFE Global Fraud Conference, Nadia Wright, CFE, taught attendees about a number of fraud schemes that target the aging. Wright, senior fraud investigator for LPL Financial, said most scams fall into one of two categories: the long game or the quick hit.

One common example of a long scheme are romance fraud scams. A fraudster pretends to be a potential love interest for a target and spends time building a romantic relationship with them. They usually concoct a backstory of being in the military or working overseas to explain why they wouldn’t be able to meet in person, and they artificially speed up the romantic connection. “They quickly suggest moving the conversation to a platform that is not easily monitored,” Wright said. “The fraudster might profess love very quickly in days or weeks.” Once the fraudster believes the victim has been hooked, they begin to ask for monetary favors.

Romance scammers often target the aging due to the higher likelihood that their spouse has passed or that they might feel isolated. “They prey on the targets emotional vulnerability and their need to connect with someone,” she said. They use grief to their advantage in manipulating older people who want to believe they have found love.

Another longer scam is when a fraudster contacts a target and tells them they’ve won the lottery, a sweepstakes or have come into a sudden, large inheritance. The fraudster promises a windfall but says that they need some money upfront for transfer fees or taxes. “Victims are often coached to not tell their bankers or other financial representatives,” said Wright. By instructing the victim to keep the “money” a secret, it makes it harder for financial professionals, or friends and family, to know what’s happening and dissuade the victim from giving the fraudster money.

Some quicker scams include email compromise, where a fraudster impersonates someone the victim knows and uses artificial urgency of a fake emergency to ask for money. If the victim tries to question the email sender, they feign outrage “in an effort to fluster or shame the target,” said Wright.

A similar scam the specifically targets the aging is the “grandparent scam.” In this scheme, a fraudster impersonates a grandchild and claims to be in trouble with the law who needs immediate money to get out of their predicament. “The grandchild begs the target not to tell their parents and to keep it a secret,” she said. “The target is usually directed to purchase gift cards or other unconventional methods … it relies of the target being too agitated and too upset to think rationally.”

So why do fraudsters target the aging and why are they more likely to fall for these frauds? “They count on the older segment of society being compassionate,” Wright said. “They [also] often count on the victims having some form of age-related cognitive decline.” She explained that the second part is not entirely in the control of the victim — as we age, certain parts of our brain that use critical thinking diminish. “Believe it or not, it’s not always because someone’s just gullible.”

Wright laid out red flags to be aware of when you think an aging person you know might be falling victim to a fraud:

• Have they mentioned a new relationship? How did they meet? Has it been in person, or online?

• Are they highly secretive about details of that relationship or opportunity?

• Are they having sudden financial difficulties?

She also stressed that prevention is key. “Once they’re in it, it can be almost impossible to break a scammer’s emotional hold on a victim,” Wright said. While no one is immune from fraud, the more that anti-fraud professionals, and people in general, can educate their aging family and friends about the red flags of these fraud schemes, the less likely it is that they’ll be the next victim.