Seniors are less vulnerable to scams than stereotypes suggest, according to new data from Better Business Bureau (BBB), but they still need to protect themselves
National Senior Citizens Day is August 21, and there’s no better way to celebrate than by learning about seniors’ surprisingly low level of vulnerability to scams. Seniors are often thought of as the perfect scam target – out of touch, unfamiliar with technology, and gullible. However, this stereotype simply isn’t true. New research by the Better Business Bureau (BBB) shows that younger and more educated people are actually the most vulnerable to scams – 69% of victims are under 45 and 78% hold a college degree!
This highlights the importance of respecting your elders – after all, they are wiser! The thinking is that seniors are less likely to be affected by “optimism bias” – which is the tendency to believe other people are more vulnerable than we are. Seniors, having been around longer, are more aware of risks and less likely to take them. Additionally, they’ve probably seen more and a wider variety of scams throughout the years, and research shows the best way to protect yourself from a scam is to be familiar with it beforehand.
Although seniors may be more scam savvy than others, they, along with everyone else, are still vulnerable to fraudsters. To help educate seniors on their special day, we’ve broken down what scams people over 65 are most vulnerable to – both in terms of total reports and percent of victims who fell for the scam and lost money. All of this data comes from BBB Scam Tracker, a crowdsourced tool that provides consumers across the U.S. and Canada with a place to report scams and fraud, and warn others of malicious or suspicious activities. As of August 2016, more than 35,000 scams have been reported to BBB Scam Tracker – and only 18% of those were reported by seniors over 65. If you ever come in to contact with a scam, make sure to report it to BBB Scam Tracker to help others avoid it.
Most Reported Scams to BBB Scam Tracker by those over 65:
- Tax Collection Scam – 2,183 reports, less than 1% lost money: The scam most reported to BBB Scam Tracker by seniors – and all age ranges – is the tax collection scam. It accounted for almost 40% of scams reported by those over 65 to BBB Scam Tracker. However, less than 1% of seniors reported losing money to this scam The tax collection scam follows a very consistent script. You’re called on the phone by a demanding voice, claiming to be an officer of the “US Treasury”, “IRS”, or other government organization. The caller demands that you pay a large sum of money for “back taxes” or another vague charge right then and there, or else you’ll be arrested. Just hang up – don’t provide any personal information or feel threatened.
- Sweepstakes/Lottery/Prizes Scam – 771 reports, 10% lost money: The second most reported scam to BBB Scam Tracker by those over 65 is the sweepstakes/lottery/prizes scam. There were 771 reports of this scam by seniors to BBB Scam Tracker, accounting for 14% of their reports. Ten percent of those targeteds reported losing money to this scam, with a median loss of $423. For all other age groups, 11% (a higher rate) of consumers reported losing money to this scam, but it only accounted for 5% of reports. Seniors may be more heavily targeted for this scam because scammers mainly use the phone and postal mail, rather than the computer, to reach their victims. These scams fall in to a pattern: you receive an unsolicited communication from someone claiming to work for a government agency or representing a well-known organization, notifying you that you’ve won a lot of money or a prize. The scammer explains that, in order to collect the winnings, you first have to send a small sum of money to pay for processing fees or taxes. However, even after you wire the money, you never get your “winnings”, and you’re out the money you paid for “fees and taxes.” In another iteration, you get an unsolicited check or money order and directions to deposit the money, and immediately wire a portion of it back to cover processing fees or taxes. Soon after this, you learn that the checks are counterfeit, but you’ve already wired the money to cover the “taxes” and can’t get it back.
- Tech Support Scam – 461 reports, 30% lost money: The third scam most reported to BBB Scam Tracker by seniors is the tech support scam. There were 461 reports of this scam to BBB Scam Tracker, accounting for 8% of reports. Unfortunately, 30% of seniors who reported this scam had lost money compared to 20% of those under 65. The most common way that this scam plays out is as follows: a “tech support specialist” calls, usually claiming to be from Microsoft. The caller informs the consumer a virus has been detected on their computer and offers to remove it. The removal process involves gaining remote access to the computer or purchasing a software license for $500. In an effort to solve the problem, consumers provide not only credit card numbers, but also verify Social Security numbers and passwords. In another twist, cyber criminals attempt to defraud individuals by producing a pop-up on their computer, warning about a hack. The warning seems legitimate and provides a phone number for tech support. Once the consumer calls “tech support,” they are asked for remote access or money to solve the problem. Hang up on these calls, don’t give out personal information (including passwords), and don’t give anyone remote access to your computer. Make sure to update or download legitimate security and firewall software and scan your computer frequently to detect any viruses.
Scams reported to BBB Scam Tracker with the Highest Percent of Victims over 65 Losing Money:
- Romance Scams – 3 reported, 67% lost money: Although only half of one percent of reports to BBB Scam Tracker from seniors are about romance scams, two-thirds of victims lost money – and the median amount lost is a high $3,950! Most romance scams start with fake profiles on online dating sites, created by stealing photos and text from real accounts or elsewhere. Scammers often claim to be in the military or working overseas to explain why they can’t meet in person. Over a short period of time, the scammer builds a fake relationship with their target, exchanging photos, romantic messages, evening talking on the phone or through a webcam. But just when the relationship seems to be getting serious, the new sweetheart has a problem: a health issue or family emergency, or wants to plan a visit. No matter the story, the request is the same: they need money. But after the target sends money, there’s another request, and then another. Or the scammer stops communicating altogether. If you’re dating online, beware of a dating prospect who always has an excuse to postpone a meeting, has discrepant photos, or claims to be currently abroad. Be extremely cautious if they ask you for any money or credit card information and be careful who you trust.
- Online Purchase Scam – 61 reported, 64% lost money: Another group of scams that trick many seniors out of their money – 64% of victims – are online purchase scams. Although some would think seniors are more likely than younger folks to lose money online due to their inexperience with technology, this is actually not true. For all other age groups, 73% of consumers lost money. This may be because seniors are more risk-averse. These account for only 1% or reported scams by those over 65, but the median loss is $175. The victim usually purchases an item online but never receives it, and is unable to receive a refund. This occurs when consumers are shopping on fraudulent sites. Look up all businesses at org and do your research before making purchases. Be very aware of phishing websites, and don’t click on pop-ups or links and attachments from unsolicited emails. Read the return policies and contact information (look for a toll-free phone number) carefully, and pay with a credit card. For more tips on savvy online shopping, read BBB’s guide.
- Rental Scams – 10 reported, 50% lost money: The third scam that tricked a high percent of seniors out of their money (50% of victims) are rental scams. Seniors are less likely to be a target of rental scams than younger generations:rental scams only accounted for .2% of reports to Scam Tracker by seniors, but they account for 1.2% of reports by all other age groups. However, other age groups were less likely to lose money, with only 43% of victims under 65 reporting loss. This may be because these scams are primarily done through online classified sites, which seniors may be less familiar with. Scammers post on sites that offer free listings to steal consumer’s money and personal information. Scammers post a listing for a fake property, stealing real picture to make it look legitimate. They’ll ask you to wire money for rent or a security deposit but aren’t able to show you the property. Don’t wire money or pay using a prepaid debit card, watch out for deals that sound too good to be true, and make sure to see the property in person.