The Hidden Toll of Financial Abuse of Older Adults

An older woman looks stressed as she sits on her sofa and looks into the distance.

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Financial exploitation of older people — whether through deceitful scams, manipulative family members or simple digital illiteracy — is rising at alarming rates.

Coupled with a growing digital divide, older adults are facing a real battle and a potential loss of hard-earned assets.

Growing epidemic of elder financial abuse

People of any age can be targeted by scammers, but older folks are often more trusting and, therefore, more vulnerable.

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Since there is no face-to-face interaction, these bad actors are professionals at gaining the trust of older folks and presenting themselves as authority figures.

Consumer Affairs found that the amount of money a defrauded older person could face increases with age. Younger people, ages 20 to 59, are more tech-savvy and have suffered the fewest losses.

The FBI reported that in 2023, more than 100,000 people age 60 and older were victims of financial fraud schemes, with people age 80 and older reporting a higher median financial loss than any other group.

The National Council on Aging reported that the total loss of this global older generation to fraud totaled more than $3 billion, with each person suffering about $35,000 of money taken.

This financial abuse of older adults is often called the "crime of the 21st century" by advocacy groups and researchers. Unlike physical abuse, which can leave visible scars, financial exploitation is often invisible — until your bank account is drained or your home is lost.

These losses can come from strangers posing as IRS agents, fake grandchildren in distress or even the adult child "borrowing" money without intention or ability to repay.

The average loss per victim is often more than $10,000, though for many, the cost is not just monetary — it's emotional and psychological, as well.

Betrayal by trusted individuals makes recovery even more difficult.

Caregivers, neighbors and even family members sometimes exploit the very people they're supposed to protect. Many older people feel too embarrassed or afraid to report abuse, especially if it involves a loved one.

As a result, elder financial exploitation goes unreported, uninvestigated and unpunished.

Most popular schemes

The most common scams include:

Tech support
Family impostors (the grandparent scam)
Financial services
Government impostors
Romance
Fake sweepstakes and lotteries
Online shopping
Cryptocurrency
Real estate and home repair

Phone scams are increasingly sophisticated, preying on emotion and urgency. A caller might impersonate a government official or tech support representative, warning of imminent arrest or account hacking.

Others pose as Medicare representatives, asking for updated "information" to gain access to private data.

More recently, artificial intelligence has added a chilling twist: Scammers can now use AI-generated voice clones to mimic a grandchild or spouse in distress. It takes a few seconds of audio — scraped from social media or a voicemail — to trick a victim into thinking the call is real.

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Phishing emails, fake websites and fraudulent investment schemes are also widespread. What they all have in common is one thing: targeting older people who might not be tech-savvy or skeptical enough to detect the fraud.

The digital divide: A growing risk factor

While the internet has become essential for modern financial life — banking, bill-paying, Medicare management — it has also left a significant portion of the older population behind. Many older adults lack the digital literacy required to navigate online services securely.

According to Pew Research, about 10% of people aged 65-plus don't use the internet at all, whereas younger groups do.

Among those who do, many report low confidence in their ability to use smartphones, manage online accounts or recognize digital threats.

This creates a dangerous vulnerability: If an older person can't distinguish between a legitimate bank email and a phishing attack, or if they're too intimidated to use two-factor authentication, they're easy targets.

The shift of critical services to digital-only platforms — such as Social Security, Medicare and online banking — means that opting out is no longer realistic.

Older adults who avoid technology entirely risk social isolation and missed financial or medical deadlines. But diving in without support is just as risky.

Solutions we need: Education, oversight and advocacy

Combating these threats requires a three-pronged approach: education, protective tools and support networks.

Digital literacy training. Community centers, libraries and nonprofits can play a pivotal role in offering digital education focused on older people.

These courses should go beyond just "how to use email" and include practical modules on recognizing fraud, managing passwords, using secure Wi-Fi and understanding online banking tools.

AARP is on the case notifying older adults of the latest scams in their areas and giving tips for protections.

Built-in safeguards. Financial institutions can help by offering retiree-friendly products — such as automatic fraud alerts, account monitoring tools for trusted family members and slower transaction processing for suspicious activity.

Banks and brokerages must also train staff to recognize red flags when older people come in with unusual requests or sudden withdrawals.

Many companies offer these, but they also need to educate older adults about their oversight.

Legal and policy protections. Strengthening laws that protect older adults from financial exploitation is essential. Many states have enacted mandatory reporting laws for suspected elder abuse by financial professionals.

Federal agencies, including the Consumer Financial Protection Bureau (CFPB), have also launched initiatives focused on elder financial safety. But enforcement and awareness are inconsistent.

Family and community involvement. Adult children and caregivers must take an active role — but not a controlling one — in helping older people safeguard their finances.

Regular, respectful conversations about budgeting, suspicious calls and account monitoring can create trust and prevent crises.

Community groups, religious institutions and eldercare networks can provide the emotional support and resources needed to combat isolation, which is often a key risk factor.

Age with dignity and protection

Aging should not mean vulnerability to theft or confusion. But without proactive efforts, millions of older adults remain exposed — financially isolated in a world designed for digital natives.

As our society grays, the urgency to address financial exploitation, and the digital divide must become a top priority.

Protecting older people isn't just a financial issue — it's a moral one. With the right tools, education and community vigilance, we can ensure that older adults age with the dignity, independence and the financial security they deserve.

Disclaimer

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

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Neale Godfrey is a New York Times No. 1 bestselling author of 27 books that empower families (and their kids and grandkids) to take charge of their financial lives. Godfrey started her journey with The Chase Manhattan Bank, joining as one of the first female executives, and later became president of The First Women's Bank and founder of The First Children's Bank. Neale pioneered the topic of "kids and money," which took off after her 13 appearances on The Oprah Winfrey Show.