Crooks succeeded in taking significantly more money from older adults in 2021 than the year before through investment, business impersonation and government impersonation scams, according to a new report to Congress from the Federal Trade Commission.
According to the report, consumers 60 and older filed 467,340 fraud reports with reported losses of more than $1 billion. This was an increase of nearly 40 percent in the number of fraud reports in 2020 when people in that age group filed 334,411 fraud reports with reported losses of more than $600 million. The FTC says the vast majority of frauds are not reported, adding that these numbers include only a fraction of older adults harmed by fraud.
The FTC says the vast majority of frauds are not reported, adding that these numbers include only a fraction of older adults harmed by fraud. To make matters worse, older adults who do report fraud often lose larger sums than their younger counterparts. However, older adults are less likely to report losing money to fraud than younger people. Among the possible explanations for this, the FTC said, could be that older people may be more likely to “avoid losing money when exposed to fraud (or be) more inclined to report fraud when no loss has occurred.”
“Older adults continued to be much more likely than younger adults to report losing money on tech support scams, prize, sweepstakes and lottery scams, and family and friend impersonation,” the report states.
Online shopping fraud continued to be the most commonly reported type of fraud in which victims reported losing money, according to the FTC. But older adults were much less likely to report losing money to online shopping fraud than younger adults.
Scammers who targeted older adults most frequently collected payment using gift cards and reload debit cards, followed by credit cards, according to reports collected by the FTC. But older adults reported higher losses in scams using bank transfers or payments.
Walmart Accused of Enabling Fraud
The agency sued Walmart this past summer, asserting the retailer “has been a particularly popular processor for fraudulent money transfers, in large part because of Walmart’s ineffective, poorly enforced anti-fraud policy.” The FTC asserted that Walmart failed to adequately train staff who handled money transfers about avoiding fraud, and told workers. “If you suspect fraud, complete the transaction.”
Walmart has called the lawsuit “misguided” (opens in new tab) and asked a judge to dismiss it.
Fraud Dollar Losses Surged
Younger adults aren’t immune. The FTC says losses increased across the board in 2021, but that the increases were “most striking for younger adults” who fell prey to romance scams and investment scams, both of which have much higher reported median individual dollar losses than most other types of fraud.
Romance scams led the rest when it comes to losses among older adults as well. According to the FTC, reported losses to romance scams increased significantly in recent years, and this trend accelerated with the start of the pandemic. “For older adults, reported romance scam losses increased from $139 million in 2020 to $213 million in 2021,” the FTC report states. At the same time, business impersonation scams took more than $151 million from older adults in 2021, more than double the previous year. Part of the increase, the FTC says, is attributable to a surge in scammers posing as being from Amazon.
Older adults’ losses to investment scams more than tripled in 2021, according to the FTC. The increase was largely because of cryptocurrency investment scams. These scams involve investments in cryptocurrency and cons where victims are tricked into paying the thieves money with cryptocurrency. ”Reported losses by older adults to scam investment opportunities where the payment method is in cryptocurrency increased more than ninefold in 2021,” the FTC report states.
People in their eighties and older lost the most — $47 million — on prize, sweepstakes and lottery scams, according to the report, which says this represents 31% of reported fraud losses by people in that age group. The FTC says the median individual reported loss on these scams for those 80 and over was $6,000 in 2021.
For the first time, more older adults were reported to have been scammed online in 2020 than through fraud that started with telephone calls. And that increased in 2021, according to the FTC, when online fraud among older adults was nearly double phone fraud. However, individual losses were significantly higher at $1,5000 among older adults scammed over the phone, compared to $300 lost individually to online fraud.
Scammers who contacted older adult victims via social media more than doubled in 2021, the FTC said.
But just as the internet is being used to scam victims, federal authorities hope to use it to disseminate information to arm consumers to protect themselves. For information about different scams, you can visit the FTC online.
Elaine Silvestrini has had an extensive career as a newspaper and online journalist, primarily covering legal issues at the Tampa Tribune and the Asbury Park Press in New Jersey. In more recent years, she's written for several marketing, legal and financial websites, including Annuity.org and LegalExaminer.com, and the newsletters Auto Insurance Report and Property Insurance Report.
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