Spotting Financial Fraud & Exploitation of the Elderly

Part 3 in a series of articles to support World Elder Abuse Awareness    

Written by Joanne Byron, BS, LPN, CCA, CHA, CHCO, CHBS, CHCM, CIFHA, CMDP, OHCC, ICDCT-CM/PCS of the American Institute of Healthcare Compliance (AIHC), a non-profit healthcare education organization.    

AIHC is sharing this information in support of World Elder Abuse Awareness Day.  The information below is not all-inclusive or comprehensive, but it is a good start to increase awareness to educate your workforce, patients, caregivers and family members.  Please feel free to repost, print and make available to your workforce members. 

Criminals are getting smarter every day and using advanced technology, such as Artificial Intelligence to scam the elderly.  Loneliness also creates situations for vulnerable adults leading to romance scams.

Understanding Elder Abuse and Financial Exploitation Statutes

The federal government, states, commonwealths, territories and the District of Columbia all have laws designed to protect older adults from elder abuse and guide the practice of adult protective services agencies, law enforcement agencies, and others. Basic definitions associated with elder abuse are provided below for clarification. These laws vary considerably from state to state. 

• Please check on the U.S. Department of Justice (DOJ) “State Elder Abuse Statutes” for easy reference for definitions, rules applying to institutional settings, Native American elder justice and more.

Abuse

According to Title 8 Public Health and Welfare § 192.2400 of the Department of Health and Senior Services, “Abuse”, the infliction of physical, sexual, or emotional injury or harm including financial exploitation by any person, firm, or corporation and bullying.

Extortion

Extortion happens when someone threatens harm to scare the individual into giving them money or items. This can be threat of harming a pet or loved one or threaten nursing home placement, etc.

Financial or Property Exploitation

This means illegal or improper use of an elderly or adult with a disability's money, property, or other resources for monetary or personal benefit, profit or gain. This includes, but is not limited to, theft, misappropriation, concealment, misuse or fraudulent deprivation of money or property belonging to the elderly or adult with a disability. 

According to the DOJ, this is typically committed by someone the patient knows, such as Power of Attorney (POA) abuse, credit or debit card use, lawyers or brokers abusing the patient’s trust. 

Financial exploitation refers to 2 types of financial crimes committed against older adults:

• Financial abuse (committed by someone you know)
• Financial fraud (committed by a stranger)

Both result in serious financial, physical, and emotional harm to older adults.

The Transnational Elder Fraud Strike Force provides the following list to warn and educate the public about trending elder fraud threats. The Strike Force encourages use of the scheme names listed below to enable those combating financial exploitation to speak a common language in discussing and reporting incidences of elder fraud. 

• These scams are outlined in more detail below.
• Social Security Administration Impostor Scam
  • Tech Support Scam
  • Lottery Scam
  • IRS Impostor Scam
  • Romance Scam

Spotting a Scams Targeting the Elderly

Romance Scams are launched by criminals online perhaps through a dating website, online game or even social media.  These scammers pretend to be someone they are not so they can gain trust and then ask for money. The scammer will say they’ve fallen in love, but have some reason they can’t meet in person. The scammer will start asking for money so they can travel to meet the victim or they need money to deal with an emergency, start a business, or help get the victim started with an “investment”, sometimes in cryptocurrency.

Imposter Scams is when the criminal pretends to be from the government (such as the Social Security Administration, IRS, or the police), or a company (such a bank or online company). Scammers will state that there is a serious problem with the victim’s account or benefits, or that the victim is a suspect in a crime. They may warn that benefits are being stopped, that there is a warrant for the victim’s arrest, or that the victim’s money is not safe. A scammer will offer fix this problem which involves paying money or moving money to a “safe” account the scammer provides.

Grandparent Scams prey on the elderly where the criminal pretends to be a family member.  This is easier now with Artificial Intelligence being used.  The victim receives a call pretending to be a family member in trouble (often arrested or seriously injured) and needs money right away.  Scammers often demand that the phone call be kept a secret.

Investment Scams happen when the victim is offered a once in a lifetime investment chance.  Scammers trick the victim into putting money in stocks, cryptocurrency, real estate, or many other things. Scammers promise big returns on investment with little or no risk. At times, a scammer may even show a fake statement that makes it look like the victim’s investment is doing well or even send some money to get the victim to pay more.

Lottery/Sweepstakes Scams happen when the victim is told they have won a sweepstakes, lottery prize or gift.  At times, scammers will even pretend to be a government agency helping to make sure the victim receives their winnings. The catch?  The victim must pay a fee to obtain the winnings, and then never receive that prize or gift.

Phantom Hackers & Technical Support Scams are more frequent due to savvy seniors having better computer skills and using technology.  These scams start as a computer pop-up, phone call or email saying there is a problem with the computer.  The scammers may pretend to be from a well-known company and ask to “remote” into the victim’s computer, meaning they can access and control the computer. Scammers will say there is a problem that needs fixing immediately and tell you to pay a fee. At times, scammers will also pretend to offer you a refund. They will pretend to refund you too much money ($4500 instead of $450) and ask you to return the difference.

The information below is from an FBI Public Service Announcement entitled Increase in Tech Support Scams Targeting Older Adults and Directing Victims to Send Cash through Shipping Companies.

THE SCAM

• Tech support scammers usually initiate contact with older adult victims through a phone call, text, email, or pop-up window purporting to be support from a legitimate company. The scammer informs the victim of fraudulent activity or potential refund for a subscription service.
  • Subsequent emails, pop-ups, and texts contain a phone number for the victim to call for assistance. Once the victim calls the number, a scammer tells the victim they have a refund for the victim, however, the only way the money can be sent is by connecting to the victim's computer and depositing it into the victim's bank account.
• The scammer tells the victim they can assist with the refund and convinces the victim to download a software program allowing the scammer remote access to the victim's computer.
  • Once a connection is established, the victim is convinced to log on to their bank account. The scammer then supposedly transfers an amount to the victim's bank account but "accidently" deposits a much larger amount than intended.
  • The scammer points this "error" out and tells the victim to return the extra money or the scammer will lose their job.
• The scammer instructs the victim to send the money in cash, wrapped in a magazine(s), or similar method of concealment, via a shipping company to a name and address provided by the scammer.
  • Most recently, scammers have instructed victims to ship packages containing money to pharmacies and retail businesses that are equipped to receive shipping company packages.

“Phantom hacker” scams are an evolution of tech support scams, a type of cybercrime.  As of August 2023, losses from tech support scams were up 40% during the same period in 2022, according to a recent FBI public service announcement. It didn’t disclose the total dollar loss during that period. Information from that announcement is reproduced below.

"Phantom Hacker" Scams Target Senior Citizens and Result in Victims Losing their Life Savings

The FBI is warning the public of a recent nationwide increase in "Phantom Hacker" scams, significantly impacting senior citizens. This Phantom Hacker scam is an evolution of more general tech support scams, layering imposter tech support, financial institution, and government personas to enhance the trust victims place in the scammers and identify the most lucrative accounts to target. Victims often suffer the loss of entire banking, savings, retirement, or investment accounts under the guise of "protecting" their assets. Between January and June 2023, 19,000 complaints related to tech support scams were submitted to the FBI Internet Crime Complaint Center (IC3), with estimated victim losses of over $542 million. Almost 50% of the victims reported to IC3 were over 60 years-old, comprising 66% of the total losses. As of August 2023, losses have already exceeded those in 2022 by 40%.

THE SCAM

Phase 1 - Tech Support Imposter

• A scammer posing as a tech or customer support representative from a legitimate company contacts the victim through a phone call, text, email, or a pop-up window on the victim's computer and instructs the victim to call a number for "assistance."
• Once the victim calls the number, a scammer directs the victim to download a software program, allowing the scammer remote access to the victim's computer. The scammer pretends to run a virus scan on the victim's computer and falsely claims the computer has been or is at risk of being hacked.
• Next, the scammer requests the victim open their financial accounts to determine whether there have been any unauthorized charges - a tactic the scammer uses to determine which financial account is most lucrative for targeting. The scammer chooses an account to target and tells the victim they will receive a call with further instructions from the fraud department of the respective financial institution hosting that account.

Phase 2 - Financial Institution Imposter

• A scammer posing as a representative of the financial institution mentioned in phase 1, such as a bank or a brokerage firm, contacts the victim. The scammer falsely informs the victim their computer and financial accounts have been accessed by a foreign hacker and the victim must move their money to a "safe" third-party account, such as an account with the Federal Reserve or another US Government agency.
• The scammer directs the victim to transfer money via a wire transfer, cash, or cryptocurrency, often directly to overseas recipients. The scammer may instruct the victim to send multiple transactions over a span of days or months.
• The scammer tells the victim to not inform anyone of the real reason they are moving their money.

Phase 3 - US Government Imposter

• The victim may also be contacted by a scammer posing as an employee at the Federal Reserve or another US Government agency.
  • If the victim becomes suspicious of the government imposter, the scammer may send an email or a letter on what appears to be official US Government letterhead to legitimize the scam.
• The scammer continues to emphasize the victim's funds are "unsafe" and they must be moved to a new "alias" account for protection until the victim concedes.

Report Financial Fraud of the Elderly

Fraud and romance scams aimed at older adults resulted in losses of more than $184 million in 2018.

Many crimes go unreported because victims are scared, embarrassed, or don’t know who to call. That’s why DOJ created the hotline.

Report to the FBI

The Internet Crime Complaint Center, or IC3, is the Nation’s central hub for reporting cybercrime. It is run by the FBI, the lead federal agency for investigating cybercrime.

• The name of the person or company that contacted you.
• Methods of communication used, to include websites, emails, and telephone numbers.
• The address where the cash was shipped and the recipient’s name(s).

Don’t Turn a Blind Eye – Be Part of the Solution

If you see something, say something to your Compliance Officer, Manager or someone in authority.  Ignoring a potentially harmful situation is to neglect our duty of care to our patients.  Financial extortion can financially devastate an elderly patient which contributes to psychological and physical problems.

Duty of care is a requirement that a person act toward others and the public with the watchfulness, attention, caution and prudence that a reasonable person in the circumstances would use. If a person's actions do not meet this standard of care, then the acts are considered negligent, and any damages resulting may be claimed in a lawsuit for negligence.

This article is sponsored by the American Institute of Healthcare Compliance (AIHC), a non-profit healthcare compliance training organization. Please re-post this article or print and distribute to your workforce for educational purposes.  Locate more information from your State, local law enforcement, medical society and use this link for additional information from the U.S. Department of Justice.  For more information to obtain online training in corporate compliance, click here.

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