Older adults can become victims of financial abuse. Learn how you can protect yourself and your loved ones from financial exploitation.

Americans who are older may frequently find themselves the targets of financial abuse, which is when someone uses another person’s money without permission to benefit themselves. It can also include withholding money from the rightful owner with the intent of deception or control. Financial abuse affects thousands of older adults each year. In this article, we’ll cover how to identify common signs of elder financial abuse, what to do if you or a loved one were scammed and how to protect yourself from becoming a victim.

What is elder financial abuse?

Elder financial abuse refers to a wide range of behaviors and scams that involve taking advantage of an older adult’s finances. Some examples include money being taken without permission, loans not being repaid, or a service provider purposefully overcharging an older customer.

Elder financial abuse can be perpetrated by family members, caregivers or complete strangers.

An AARP study found that victims of financial abuse over age 60 lost $28.3 billion annually.

Common financial scams targeting the elderly

Financial scammers target everyone. Older individuals are often targeted due to a belief they may be more vulnerable to financial scams. This is especially true if the individual has someone untrustworthy managing their finances, does not know how to identify cybersecurity risks or has a mental impairment that affects their capacity to make rational decisions.

Here are a few types of scams that often target older adults.

Tech support fraud

In tech support fraud scams, the scammers pretend to be a representative of a well-known tech company. They might offer to renew software subscriptions or fix technology issues even though no issues exist. In exchange for these fraudulent services, scammers will ask the individual to make wire transfers to foreign accounts, send large amounts of money via overnight or express services or buy large amounts of prepaid cards.

Confidence fraud

In confidence fraud, the scammer gets emotionally close to the victim, earning their trust, affection and confidence. Once the scammer has established a seemingly close relationship with the victim, they ask for money. They will often say they need the money to cover medical emergencies or legal fees.

In many cases, the scammers of confidence fraud will say they are in the military or working abroad, which makes face-to-face meetings impossible. It also makes the request for the victim to send money overseas seem more plausible.

Confidence fraud also encompasses the grandparent scam, in which a scam artist pretends to be a loved one who is in trouble and needs money. They often impersonate a grandchild, nephew or niece living in another state. If the victim has not seen or spoken to this loved one in quite some time, it may be more difficult to identify the caller as an imposter.

Lottery, sweepstakes or inheritance scams

In lottery or sweepstakes scams, the victim is contacted and told that they won a lottery, competition or sweepstakes. To get their prize, they must pay upfront fees and taxes. Sometimes this process—and the requests for more money—draw out for months or years. Needless to say, the victim never receives their prize money.

Similarly, inheritance scams inform the victim that they are the heir of a distant relative. The victim is then convinced to pay taxes and fees to receive a (nonexistent) inheritance.

Government impersonation

In this type of scam, the scammer impersonates a government official who threatens physical or financial harm to get the victim’s personally identifiable information. They may pretend to represent the Internal Revenue Service with dire warnings that an outstanding tax debt or fine may lead to an imminent arrest if not paid immediately over the phone or through email. Victims may also be coerced into buying prepaid cards or sending wire transfers.

Investment fraud

Investment fraud cases involve the illegal or false sale of investment products. The scammer usually offers no- or low-risk investments with guaranteed or overly consistent returns, complicated strategies or unregistered securities.

Scammers who use investment scams usually target specific groups based on their victims’ age, ethnicity, interests or religion. They gain their victims’ trust before offering what seems to be a fantastic investment opportunity.

Your bank can help protect you against fraud

Cadence Bank protects its customers with first-rate encryption, required PIN login for mobile banking and continuous surveillance of payment channels. Visit our Fraud and Security Center to learn more about how we keep your accounts and personal information safe.

Contact Cadence Bank if you have any questions about Cadence Bank's fraud prevention tactics. You can read more about personal finance in our Insights & Articles section.

This article is provided as a free service to you and is for general informational purposes only. Cadence Bank makes no representations or warranties as to the accuracy, completeness or timeliness of the content in the article. The article is not intended to provide legal, accounting or tax advice and should not be relied upon for such purposes.