Report finds scams cost older Americans more money in 2018 than 2017

Scams cost older Americans more money in 2018 compared with the year before, but older consumers might be getting smarter about recognizing fraud before they lose money.

Those are two findings from a newly released report by the Federal Trade Commission analyzing 3.1 million complaints about fraud compiled by the agency’s Consumer Sentinel Network in 2018.

The report revealed that consumers who are 60 and older were disproportionately targeted or affected by fraud — in part because they were targeted with more lucrative types of fraud, such as real estate and timeshare resale fraud, while younger consumers were more likely to be hit with online shopping fraud.

Median losses for victims ages 60 to 69 was $600, a 20 percent increase compared with 2017. Victims ages 70 to 79 suffered median losses of $669, a 24 percent increase. Victims 80 and above reported a median loss of $1,700.

By contrast, consumer victims 59 and younger all reported median losses of $508 or less. Among the report’s findings: Phone scams were the most lucrative type of scam targeted at older people, and gift cards became the most popular payment method demanded by scammers.

Older people were much more likely to report losing money on scams involving tech support, prizes, sweepstakes and lotteries, and impersonations of family and friends.

Younger adults were victimized more often by online shopping frauds, government imposter scams and fake check scams.

Although older adults remained the least likely of any age group to report losing money to fraud, individual dollar losses among older victims were higher.

Median individual losses among consumers 60 and older increased compared to 2017. The

increase was sharpest among people 80 and over.

But there was a bit of good news in the report regarding elderly targets: Although older victims who reported losing money lost larger amounts than younger victims, the overwhelming majority of older people who filed fraud complaints didn’t lose money.

“This suggests that older adults may be more likely to avoid losing money when exposed to fraud, more inclined to report fraud when no loss has occurred, or a combination of these or other factors,” the report said.

But Kathy Stokes, director of fraud prevention programs for AARP, said the finding might be less significant than it appears. She noted that the report also found that older consumers who lose money to fraud are less likely to report it.

“Scams against the elderly are severely underreported,” Stokes said. “Part of it is they don’t know where to go to report it. Another is they’re embarrassed.”

Phones were by far the initial mode of contact by most older fraud victims, the report said.

One reason could be that older people were taught that it’s rude not to answer a phone, and once answered, it’s also rude to hang up on someone, Stokes said. Fraudsters know this and have perfected strategies for keeping victims on the phone while they roll out sophisticated emotional appeals, she said.

Fear is a particularly effective motivator, she said, as used by scammers pretending to be with the IRS. “They’ll say, ‘You ignored our letters and we’re sending someone to arrest you unless you pay up right now.”

Stokes said she counsels older people to avoid answering the phone. “Make use of your voice mail. Listen to your messages. If something sounds askew, ask someone to listen with you. If they leave a number for you to call back, verify that it’s an actual phone number to the government office or business as they claim.”

Brian Young, public policy manager at the nonprofit National Consumers League, said his agency’s counselors urge older consumers to reach out to family and friends before sending money.