Elder Financial Exploitation: Red Flags and Prevention Tips
Elder financial exploitation affects a significant number of older adults each year in the US, resulting in billions of dollars in losses due to fraud. Victims often endure extended suffering, with many cases going unreported out of embarrassment. By being informed and recognizing warning signs, you can help protect your loved ones from falling victim to these crimes. Explore payment methods, fraud tactics, and financial patterns utilized by scammers targeting the elderly and vulnerable population.
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Presentation Transcript
Elder Financial Exploitation Affects at least 10% of older adults each year in the United States; more than 88,000 victims Losses of more than $28.3 billion annually to financial fraud (AARP)1 FBI reported average loss of $35,1012 5,456 victims lost more than $100,0002 1 Source: The Scope of Elder Financial Exploitation: What It Costs Victims AARP BANKSAFE INITIATIVE, Jilenne Gunther, MSW, JD National Director of BankSafe, AARP 2 Source: FBI Elder Fraud Report, 2022 1
Elder Financial Exploitation Actual figures much higher! Embarrassment prevents many victims from reporting fraud, and leads to extended suffering Being informed and knowing the red flags to watch for, you can help family and friends defend against these crimes
Payment Methods Cash Checks Card Debit/Credit Wire ACH Automated Clearing House P2P Person to Person, i.e. Zelle, PayPal, Venmo etc. Cryptocurrency 3
Frauds & Scams Scams are a multi-billion dollar industry Organized crime Use encrypted messaging apps, i.e. Telegram, WhatsApp AI voice and video deepfakes Front-line scammers are often victims of human trafficking and torture 4
Frauds & Scams Often long in duration and play on a target s emotions and vulnerabilities. May involve direct theft from a target or may use them as a money mule to process transactions from other victims 5
Frauds & Scams Frauds & Scams Often target the elderly/vulnerable or those who have had a recent loss: Will farm obituaries and social media to identify a target and learn about their past to make the solicitation seem more genuine Often rely on fear IRS penalties Harm to a loved one Threat of criminal charges for overpayment Perpetrators are persistent and focused 6
Financial Patterns Drain liquid assets Drain savings Drain investments/assets Run up unsecured credit Run up secured credit Fraud bust-out Mule/ACH activity may be intertwined 7
ACH vs. Wire Fraudsters use a victim s ignorance of financial system to extend schemes ACH: PULL 60 days Wire: PUSH No recourse 8
Why Do People Fall For Scams? Wide targeting Ignorance/Uneducated/Na ve Fear of consequences Low Risk, High Reward Financial Desperation Emotionally vulnerable 9
Why Do People Fall For Scams? Irrational decision making Emotional baggage Shame/Embarrassment Fear of losing independence Social Isolation The Backfire Effect 10
Pig Butchering Scheme where fraudsters promise strong returns on investments in cryptocurrency Victims are fattened up like pigs for the slaughter, via draining 401k balances, pensions, savings Fake online dashboards show exorbitant returns Once victims attempt to withdraw funds, the scam collapses Meshing with romance scams Elderly are particularly at risk 12
What is Crypto Currency? Virtual currency that can be used to purchase goods and services or exchanged for fiat currency (dollars) Value based on perceived worth and limited supply Can be exchanged person to person or through an exchange Exchanges facilitate exchange of cryptocurrency for other cryptocurrencies or for fiat currency Stablecoin - an alternative type of cryptocurrency that is designed to have a value that is pegged to a fiat currency, such as the US dollar 13
How Big is the Problem? FinCEN has received more than 9,000 reports related to Pig Butchering since issuing an alert on the scheme in September 2023. 14
How Big is the Problem? 2023 FTC Investment Scam data: 105,293 incidents $4.62Bn losses reported Median loss $7,800 15
Pig Butchering Organized crime, frequently originating out of Asia Front-line scammers are often victims of human trafficking and torture Term Pig Butchering is used to dehumanize victims Target large investments and retirement assets Recovery is very difficult due to the nature of the crypto industry 16
Red Flags Tell you to lie to your bank Tell you there s a bad employee at the Bank and ask for your help in uncovering the scheme Take your money for safe keeping Keep you on the phone so they can listen to your conversation Gives you a script for how to answer questions 17
Red Flags Withdrawing large amounts of cash to deposit to a 3rd party account at another bank or a Bitcoin ATM. Send a courier to your house to pick up cash Connect you directly to your bank or other agency (i.e. Social Security, IRS, Bank, Law Enforcement) over the phone Ask you for your bank passwords or one-time passcodes Promise of unrealistic returns too good to be true 18
Investigation Challenges Investigation can be difficult due to quick and automated layering of cryptocurrency transactions Recovery complicated due to multiple exchanges and cryptocurrencies involved, and jurisdictional issues Varying levels of cooperation depending on exchange and locale 19
Prevention Know the schemes Be aware of your weaknesses Look at the whole picture Does it make sense? 20
What NOT To Do Don t be pressured! Don t allow others remote access to your computer or online banking Don t be embarrassed! Don t make quick decisions 21
22 What You Can Do Hang up! Be aware of your personal details on social media Answer your bank s questions truthfully If you re unsure, talk to your Banker or local Police before sending funds
23 What You Can Do If you think a family member may be in trouble, hang up and call them directly Don t allow others remote access to your computer or online banking Stay up to date with antivirus software Be aware of your personal details on social media
24 Report Immediately! Report to your bank immediately minutes matter! File a police report and report online to www.ic3.gov Change online banking and email passwords use unique passwords
Contact Information Contact Information Jared B. Wilbur, CFE Director of Corporate Security, Vice President Washington Trust Office: 401-348-1491 Email: jbwilbur@washtrust.com LinkedIn: www.linkedin.com/in/jbwilbur YOU can protect your family and friends! RI Office of Healthy Aging Adult Protective Services Unit: 401-462-0555 25
Contact Information Contact Information Jared B. Wilbur, CFE Director of Corporate Security, Vice President Washington Trust Office: 401-348-1491 Email: jbwilbur@washtrust.com LinkedIn: www.linkedin.com/in/jbwilbur Thank you! 26
