Elder Abuse: A Financial Red Flag for Banks and Families

In 2023, reports of elder fraud plagued financial advisers and the families of the victims who were targeted by cybercriminals. Scams that coerce older adults are increasingly pervasive and insidious, and often have consequences that go far beyond mere financial loss. In April, an 81-year-old Ohio man fatally shot a 61-year-old Uber driver after both were duped as part of a ransom scam, according to The Associated Press.

The challenge for law enforcement, families of elderly victims, and the financial industry as a whole is that scam victims are often reluctant to ask for help, or, in some cases, even acknowledge that they are being or have been victimized. Cybercriminals exploit generational differences, by playing to the unique vulnerabilities of older consumers—consumers who are more likely to take someone “on their word” (proverbial “handshake”), rather than feeling empowered to challenge someone’s authenticity or request additional identity verification.

Older consumers also tend to be less likely to hang-up on a spam caller or ignore a desperate email communication or text, which puts them at greater risk of future exploitation.

Romance Scams

Romance scams, which rely on so-called “pig-butchering” techniques, are often long-running and extremely damaging, from an emotional and financial perspective^[i]. Romance scams usually involve a cybercriminal who adopts a fake online persona that is used to gain a victim’s affection and trust. From there, the cybercriminal engages with the victim over time, building a relationship to manipulate the victim into sending money, providing access to financial accounts, or wittingly or unwittingly laundering funds for cybercrime.

“The scammer’s intention is to establish a relationship as quickly as possible, endear himself to the victim, and gain trust,” the Federal Bureau of Investigation notes. Scammers may propose marriage and make plans to meet in person, but that will never happen. Eventually, they will ask for money.”

Tech Support and Investment Scams

The FBI’s Internet Crime Complaint Center in December reported that complaints of fraud and cybercrime adversely affected U.S. adults over the age of 60 increased 11% in 2023 from the previous year. Among the most damaging types of crimes impacting that over-60 age group were tech support and investment scams.

Those findings jibe with Javelin Strategy & Research’s data, which shows that nearly half (48%) of wealth management advisers surveyed by Javelin had clients over the age of 60 targeted by tech support, telemarketing and sweepstakes scams.^[ii] What’s more Javelin finds that tech and romance scams are more likely to victimize men, highlighting significant risk to a very focused and vulnerable segment of the population^[iii].

Education and Awareness

Education around scams has fallen short, namely because it fails to target the demographic groups at greatest risk. While education surrounding scams has dramatically increased over the last year, most educational campaigns are generalized, not only in their messaging, but also in their approach.

Rather than targeting education, Javelin finds that most scam awareness campaigns are blanketed, and tend to be overwhelming for consumers. Older consumers, as an example, should be targeted with educational campaigns that stress their need to be skeptical of anyone who approaches them with a sense of urgency and refuses to let them hang up (as one example) on a caller who seems suspicious.

Additionally, financial advisors, who often are among the first to be alerted to suspicious activity, tell Javelin that they feel ill-prepared and informed about what they can and should do to assist victims and their families.

As global attention around elder financial abuse increases, Javelin is making a point to educate its financial services clients about how they can and should be addressing elder fraud and cybercrime. June 15 marks the United Nations’ World Elder Abuse Awareness Day, highlighting why fraud and cybercrime targeting older consumers must get more widespread attention.