How to Identify and Talk About Elder Fraud

Elder financial exploitation, including fraud, is a form of elder abuse. Older Americans are more often targeted by fraud and report the greatest amount of fraud losses. One reason is they generally have more money than younger people. They simply have had longer to save and invest. 

Not everyone who is targeted by fraud engages with fraudsters. Often, there are other factors involved that prompt older investors to consider the fraudsters’ pitch. Some retirees may be looking for extra income and believe they can make money trading. Others may be seeking bigger returns because they don’t feel they have saved enough for retirement or believe they must rebuild their savings after a costly financial issue like a major medical expense. Others may be looking for a safe place to park their savings and are drawn to “risk free” offers. Some may be dealing with isolation or the loss of a spouse and willing to start a relationship with someone who may not have their best interests at heart. And, others may suffer from cognitive decline, which makes them more vulnerable to persuasion. 

Talking with elder family members, friends, and others in your circle who care for elderly loved ones about fraud can make all the difference. Sharing information about the latest fraud ploys raises their awareness. Discussing the organized and sophisticated nature of scams, and how anyone can be victimized, can help reduce stigmatization and encourage reporting. And staying connected, asking questions, and raising concerns with people in your circle could mean the difference between interrupting a scam or someone you care about losing everything. 

In recognition of World Elder Abuse Awareness Day, June 15, here are 10 common warning signs caregivers, relatives, or friends should watch for, along with information about how to raise the topic of fraud and ice breakers you might find helpful. 

10 Common Warning Signs  

  1. A change in financial habits. The person is suddenly interested in trading or in financial products, like digital commodities or foreign currencies, which they weren’t interested in before.

  2. Cashes out retirement savings and moves the money to a self-directed IRA.

  3. Interested in rare coins or precious metals to safeguard their retirement savings.

  4. Large withdrawals from bank accounts.

  5. Increasing credit card balances.
  6. A new special friend or love interest in their lives. Fraudsters could spend weeks or months building online or in-person relationships with seniors. Once the bond is formed, it becomes easier for the senior to rationalize payments to the person.

  7. Unpaid bills.

  8. Unexplained wire transfers to other accounts or spot-market digital commodity trading platforms.

  9. Sending large sums of money using digital currency kiosks.

  10. Being highly secretive about their finances or a certain investment when they weren’t before. Fraudsters commonly encourage secrecy from victims to prevent the scam from being discovered.

Identifying and stopping fraud early can lessen the damage and alerting officials can prevent other victims from being harmed. Getting involved, by raising concerns about fraud, shows friends and family you care.

Be Ready for the Discussion

Collect your thoughts before you start the conversation. Consider the best time and place to talk, and whether it would be helpful to invite others to join the conversation. The approach you take is important in how receptive your loved one will be to the entire conversation. 

Think about the basics, including:

  • Why do I believe my relative or friend is being scammed?

  • Who else should join me in the conversation?

  • How might my relative or friend respond to me intervening?

  • What do I want to accomplish?

  • What do I want to be sure to say?

  • When would be a good time to talk?

Having the Talk

Talking about fraud, especially investment fraud, can be a sensitive and uncomfortable conversation. In some cases, older victims might feel ashamed or fear losing their independence. The most important thing is for family or friends to understand you’re coming from a place of love and concern for their financial well-being.

  • Be patient. Some people may be too embarrassed to talk at first and may need a little time to open up to the topic. It is very important to speak with your loved one, stay calm, and listen nonjudgmentally to what they say. It may take several conversations to get the whole story.

  • Don’t assume. Ask questions and listen to the full answer before jumping to conclusions.

  • Don’t judge or blame. Anyone can become a victim of investment fraud — avoid “should-haves” or “could-haves.”

  • Be empathetic. Show them you care and try to relate to their present circumstance.

  • Listen. You don’t have to steer the full conversation. Let it progress naturally.

  • Offer to help. If there is resistance to your offer, try other suggestions.

  • Keep trying. Every attempt at the conversation is valuable.

  • Don’t put it off. You don’t need to have all of the answers to have the conversation. You just need to know where to start.

  • Submit a tip or complaint. If you know of a violation, or witness suspicious activity, submit a tip to the CFTC, or the FBI’s Internet Crime Complaint Center (IC3).

Ice Breakers

Here are some sample ice-breaker questions to help get you started:

  • I understand you heard about an opportunity to make money without much risk. Can you tell me about it? How does it work?

  • Seems we haven’t had the time to discuss your finances lately. Can we find a few minutes to chat?

  • How well do you know the person/firm/site you’re investing with?

  • I often read about the financial challenges that sometimes come with retirement. I think it’s important for family to discuss this stuff. Can we have a conversation about financial matters?

  • How do you feel about your financial situation?

  • When you project your retirement income out for years, does it seem likely to match your needs?

  • Are you more of a buy-and-hold investor or do you trade frequently?

  • How do you get information about investing?

  • Do you ever get offers or invitations from people wanting to sell you financial products or advice?

  • Did you know you can check their registration status and background before you invest?&