10 Things to Know About Scammers
Scams are rampant and hard to identify. Stay up to date with this information.
Scams are on the rise. Total fraud losses reported by adults ages 60 and older have surged about fourfold between 2020 and 2024, according to the Federal Trade Commission. Imposter scams have been the most reported type of fraud, with losses in the billions.
"There was a dramatic increase in the number of older adults reporting losses of over $100,000, and that was often to investment scams, romance scams, and imposter scams," says Christopher Brown, an attorney at the Federal Trade Commission.
Scammers pretend to be someone you trust to convince you to part with your money or personal information. As widespread as scams have become, many people still don't report them.
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"It's even beyond the stereotypes or the stigma behind it," says Ebony White, director of economic security and social safety net initiatives at the National Council on Aging. "It's also a fear of [them] losing their independence because then people might say, 'Oh, well, you can't make good decisions around your money.' But [the truth is that] anybody can be scammed."
Here is some basic information that can help protect you and your loved ones against scammers.
1. Scams have become more complex.
Years ago, scams were more predictable. They were "kind of cliché, and we started to recognize the patterns," says Chelsea Binns, an associate professor at John Jay College of Criminal Justice in New York. But artificial intelligence and other technology advances have made fraud become more convincing and complex.
"Nowadays, there are many more tools in the fraudster's toolbox," Binns says. Fraudsters can be anywhere in the world and make themselves look like just about anybody.
2. Scammers rely on you clicking on something familiar.
Scammers rely on familiarity and consistency. So scammers make their emails, texts and websites look legitimate, leading us to click links and send money before realizing it's a scam.
A common email scam is a notice that appears to be from the IRS. Scammers also create fake versions of legitimate websites, such as Apple's or IBM's. Some victims who believed they found a Microsoft help desk ended up on a lookalike site that gave a fraudster access to their computer.
3. Common scams start from unexpected communication.
Many scams begin when someone reaches out unexpectedly by phone, social media, text message or email. For example, you receive an Evite from a friend you haven't heard from in 15 years, click the link, and inadvertently give a scammer access to your computer.
Other scams pressure you to take action. They tell you not to hang up the phone because your Social Security number has been implicated in a drug smuggling cartel. Sometimes they threaten you.
"Government impostors assert authority in terms of a threat of consequences, whether that be the loss of particular government benefits, arrest or prosecution," says Brown, the FTC attorney.
4. Complex scams try to establish trust.
Romance scams are common, where scammers build a relationship with you using information they find about you online. They may say "I love you" early in the relationship.
"Then they'll use that [connection] to perpetrate frauds because the person, the victim, is disarmed and thinks this is now their partner," says Binns, the associate professor. Eventually, they'll ask for money.
In other situations, a scammer may take four or five months to build a relationship before asking you for anything, says White, the director at the aging council. "That makes it scary too because they really build their patience and that trust with you."
Relationship-based scams, where someone reaches out and claims to be a family member in trouble who needs money, are also common. AI has made it easy for a scammer to clone someone's voice, making it difficult to tell whether the caller is real or fake.
5. Protect yourself by taking a step back.
Before responding to any correspondence, take a minute to process the situation. If you think an email or text message is authentic, try to verify it by actually contacting the person or organization in question using a telephone number, website or email address you know is real.
Check websites to make sure they are correct. One additional letter in the web address can be the difference between a legitimate site and a fake one.
Be wary if someone asks you to make a payment that is difficult to trace, such as cryptocurrency, gold, gift cards or prepaid debit cards. It's almost always a scam.
6. Include someone you trust in major financial decisions.
Another red flag is when someone tells you that you have to take action quickly and can't tell anyone. Run the scenario by a close friend or relative. Fraudsters use emotional manipulation to get what they want.
You can also create a keyword with family members. For example, use the word "balloon" to confirm you're speaking with a legitimate relative, so if you get a phone call from someone "in trouble," you know it's really them.
7. Implement strong safeguards.
Create strong passwords to your online accounts and change them regularly. Set up multi-factor authentication to make your accounts harder to access. Use transaction alerts and credit monitoring to help you keep tabs on any significant changes.
You can also freeze your credit or pay for identity monitoring. Consumers can use tools like Cloaked to help reduce the risk of identity theft by limiting exposure to personal information shared online.
"However, there is little public data concerning the usage and effectiveness of these tools, making their impact on fraud prevention difficult to quantify," says John Jay College's Binns.
8. How the Federal Trade Commission (FTC) helps.
The FTC does its best to protect consumers against scammers. They operate reportfraud.ftc.gov, where consumers can report scams directly to the agency and compile reports from the website to share with law enforcement, including the FBI.
The FTC can sue scammers to recover funds. They can also shut down fraudulent websites and enforce laws against impersonation scams.
9. Safeguards financial institutions have in place.
Banks use tools such as identity verification, transaction monitoring and account protection to protect consumers. They also use algorithms and are increasingly incorporating AI to flag unusual spending patterns and fake identities.
Under the FTC's Safeguards Rule, covered financial institutions are required to implement an information security program with safeguards to protect customer information.
10. What to do if you fall for a scam.
If you made a payment through a credit or debit card, you can report the fraudulent charge to your card issuer and request a chargeback or a cancellation.
A bank transfer can sometimes be processed quickly, so if you initiated a transfer, contact your bank to request a stop payment. If you made a payment through apps like Zelle, Venmo or Cash App, report the transaction to those companies.
Always report scams to the Federal Trade Commission, which is a starting point for many investigations, says Brown. If you've provided personal information to a scammer, file a report at identitytheft.gov. Notifying financial institutions and the FTC helps everyone. "We need more reporting because it can help us advocate for more consumer protections," says White.
Note: This item first appeared in Kiplinger Retirement Report, our popular monthly periodical that covers key concerns of affluent older Americans who are retired or preparing for retirement. Subscribe for retirement advice that's right on the money.
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