Get ready for even more fake grandchildren when it comes to payments fraud. That’s one of the sad facts of life as more consumers hit senior citizen status, and criminals gain more expertise in conning people into giving over their money.
That said, financial services professionals, backed by regulatory changes, are reportedly becoming better at recognizing when their senior citizen customers are being conned out of money in their bank accounts — an awareness that seems likely to increase in the coming years as fraud that targets older consumers becomes more well-known and impacts more people.
Fresh statistics from the U.S. Treasury Department tell the main story: Banks in 2018 reported 24,454 suspected instances of elder financial abuse.
Expanding Pool of Potential Victims
That might not seem much in a nation with some 50 million people over the age of 65, but that number of reported cases is double what it was five years ago, according to the federal agency. Not only that, but by 2035, the U.S. Census Bureau estimates that the country will have 78 million people 65 and older — senior citizens will make about 20 percent of the U.S. population by then. And according to a report in the Wall Street Journal, consumers aged 50 and older hold 61 percent of bank accounts in the U.S., and make 70 percent of bank deposits.
Combine that with the cognitive decline, and in some cases, dementia that can strike senior citizens (not to be insensitive, of course) and it’s easy to see the opportunity that criminals have. Sure, younger consumers justifiably get a lot of attention in the worlds of payments and commerce, given their earnings and earning potential, and their willingness to adopt new retail and financial technology. But the U.S. Treasury stats are a reminder of the role that seniors play both in banking and as targets of fraud.
Fake Grandchild Scam
Among the most common methods of fraud is the fake grandchild scam.
According to Experian, that con “has seen an increase of late.” PYMNTS readers no doubt know how the scam works, but Experian provided a helpful explanation.
A fraudster who calls a senior citizen on the phone “will say, ‘Hi, Grandpa’ or ‘Hi, Grandma’ pretending to be the grandson or granddaughter of the older victim. The scammer then tells them a story that ends with, ‘I need money right away to… (insert issue here — pay my traffic ticket, post bail, pay for an ambulance).’ All of this is said without providing too many details. If pushed, the scammers will say things like ‘please don’t tell Mom or Dad’ or ‘My nose is broken, so I may sound strange.’ Victims can end up wiring money to the scammers as a result.”
But bank employees are learning to recognize when their customers are in danger of falling for the scam.
That’s thanks not only to personal experiences with their own or other people’s grandparents, but to financial institution training programs aimed at fraud prevention. In addition, the Wall Street Journal pointed out, new federal and state laws are prompting banks to take a more active role in trying to address frauds and scams that target older customers. Indeed, the Journal relates an anecdote about bank employees in Connecticut who were asked by a customer “in her late ‘70s” to “wire $30,000 to her grandson. The customer said he had been in a car accident while vacationing in Mexico.”
The employees were already aware of the fake grandchild scam and suggested the woman call her grandson first. “It turned out he had been at school all day — not in Mexico,” the report said.
The Federal Trade Commission has said that $9,000 is the median cash amount that people aged 70 and older sent to a fake family member or friend, with 25 percent of the people reporting the fraud saying they sent cash.
Fake grandchildren are not the only ways the criminals try to con seniors out of their money. As people live longer, they often re-enter the dating world, and there are various online sites that either cater to senior singles, or offer them potential romantic partners in the same age range.
That scam “involves a criminal setting up an account on a dating site with fake information and photos for a profile that is too good to be true,” according to Experian. “Once a target has been established, the scam usually escalates to the thief’s unveiling of a money problem.”
The ongoing rise of online retail also presents opportunities for criminals — especially when combined with a target’s vanity. (Again, this is not meant to be insensitive, but all of us are vain in some way or another, and vanity has always provided an opening for con artists. And as people live longer lives in good health, popular culture now insists that 60 is the new 40.)
According to New Perspective Senior Living, “many older Americans seek out new treatments and medications to maintain a youthful appearance, putting them at risk of scammers,” many of whom operate online to sell to consumers hundreds or thousands of miles away.
Such a scam may not offer the profit potential that comes with draining a person’s bank account. But it stands as yet another reminder of how vulnerable senior citizens can be to fraud and scams — as well as a demonstration that in this age of digital data breaches and online black markets, some criminals still find a positive ROI in older types of cons and theft.