The COVID-19 pandemic unleashed a tsunami of elder fraud costing older adults over $1 billion in 2021 alone, according to the Federal Trade Commission. The increase in scams aimed at seniors prompted the Senate Special Committee on Aging to warn families and caregivers to be on the lookout for schemes during a hearing on Thursday.
Sen. Tim Scott (R-SC), a ranking member on the committee, said during the hearing that seniors who are isolated and live by themselves are especially vulnerable to scams. He estimated senior fraud victims lose on average $34,200.
“The consequences to the scams are many for our seniors including losing purchasing power, trying to maintain good credit, affording the costs of their homes and losing sleep,” Scott explained. “It is an absolutely catastrophic experience when someone experiences a scam or fraud.”
Increasingly seniors are becoming victims of bank and crypto currency fraud, according to Marti DeLiema, PhD, from the University of Minnesota’s School of Social Work. DeLiema testified before the committee that research she conducted found seniors have lost approximately $3.5 billion over the past couple of years.
“While this is a great deal of money, research indicates fewer than 3% of consumers report to law enforcement, so the true losses are many magnitudes greater,” DeLiema told the committee.
Pittsburgh senior Aurelia Costigan told the committee that she was nearly bilked out of $1,800 by a scammer who called her and claimed to be from her bank. The crook persuaded Costigan to reveal her social security number and then rang up 22 charges within minutes on her credit card.
“I was an absolute wreck. I couldn’t sleep; I had trouble eating,” Costigan testified. “The money I lost was $1800 and that is a lot of money and it takes me a long time to earn money like that for being on Social Security to save any kind of money.”
Fortunately for Costigan, her bank and local police were able to recover the lost funds.
Earlier this year, President Joe Biden signed the Stop Seniors Scams Act into law. The law established a special advisory council which meets for the time next week to ensure that banks and other businesses have the tools needed to identify and stop elder fraud.
“Strong guidance and enforcement are critical as is education in preventing and responding to these scams,” Committee chairman Sen. Bob Casey (D-PA) said during the hearing.