Financial fraud costs many older adults $100,000 or more: FTC

For older Americans, financial fraud can be a very costly mishap.

Last year, scams reported to the Federal Trade Commission by adults age 60 and older reached $2.4 billion, up 26.3% from $1.9 billion in 2023 and 300% from $600 million in 2020, according to the FTC’s annual report to Congress, released earlier this month. The increase is driven by scams that involve individual losses of $100,000 or more, accounting for $1.6 billion, or 68%, of the total amount.

However, because most fraud goes unreported, the agency estimates the real losses experienced by older adults in 2024 may be as much as $81.5 billion. The bulk of money lost was due to investment scams.

These significant losses can contribute to financial insecurity at a time when many consumers are already struggling to keep up with rising costs and are worried about running out of money in retirement.

“This crime is not just financial,” said Kathy Stokes, director of fraud prevention programs at the AARP Fraud Watch Network. “Some people have everything taken from them, and they’ll still say the emotional impact is the hardest.”

While older adults are more likely to report large losses, financial fraud against consumers of all ages has been increasing over time. Last year, $12.8 billion in losses overall was reported to the FTC, up from $3.4 billion in 2020. Again, however, underreporting means the actual 2024 amount could be far higher: as much as $195.9 billion, according to the FTC report.

At the same time, financial institutions and lawmakers have been paying closer attention.

Many banks and other financial institutions ask accountholders for a “trusted contact,” which is someone who can be contacted in certain circumstances, including when financial exploitation is suspected. The Financial Industry Regulatory Authority, or FINRA, requires brokerages to make a reasonable effort to add a trusted contact to accounts, although investors are not required to provide one.

Additionally, a proposal that aims to help combat elder fraud is pending in Congress. Called the Financial Exploitation Prevention Act, the proposed legislation would let certain financial institutions delay executing suspicious transactions that may be due to financial exploitation, among other provisions. The House version (H.R. 2478) cleared committee in September; the Senate bill (S. 2840) is awaiting consideration by the Banking Committee.

As technology has evolved, criminals have capitalized on the expanded ways to reach their potential victims — i.e., emails, texts, social media and online ads.

For example, a seemingly innocent text from a stranger may evolve into a trusting relationship, and when the scammer suggests putting money toward a great investment, the now-trusting person sends funds to an account they believe will be returned with huge gains.

“It can be really difficult to recover the money,” said Kathleen Daffan, an assistant director with the FTC’s Bureau of Consumer Protection. “The scammers move really quickly to get the money … and move it elsewhere, often overseas.”

Older adults are also more likely than younger adults to report losing money on tech support scams; prize, sweepstakes, and lottery scams; romance scams and government impersonation scams, according to the FTC report.

Nevertheless, there are ways to try helping older parents or other loved ones avoid being a victim. 

For starters, you can simply discuss the potential for fraud and how scammers try to find new victims.

For example, “if [a stranger] contacts you out of the blue and there’s urgency, that’s a really good sign that someone is trying to defraud you,” Stokes said.

You can also sign up to receive consumer alerts on the FTC’s website so you’ll be aware of the latest scams and can share the information with others.

For a scam involving a victim who trusts the scammer, there’s a good chance loved ones won’t know about it unless they notice the person seems preoccupied or their behavior otherwise seems off.

“I’d say if an older adult is engaged in a relationship like this, where it involves trust and money, the criminals are telling them not to tell anyone,” Stokes said.

If the victim is asked to pay via gift card, cryptocurrency, cash, wires and bank transfers, it can be very difficult to reverse those transactions, Daffan said.

“We always suggest people call, right away, the entity that was involved with the transfer of the money,” Daffan said. 

“If it’s a gift card, call the card issuer. If it’s a bank, call the bank. Ask that a hold be placed on the transaction and ask if it’s possible to get the money back,” she said. “But we see often that it doesn’t work.”

If fraud has already happened and the money is irreversibly gone, it’s important not to make the victim feel guilty, Stokes said.

The AARP recommends talking to victims with empathy instead of derision or blame.