Imagine your 80-year old mother calls you, excited that she’s going to come into some money. She tells you that she just won the lottery, a prize of $150,000. The money will help her pay off her mortgage and eliminate her credit card debt. Then she tells you that all she needs to do is pay a nominal fee of $1,000 to collect her winnings. What should you do?
Scams on the Rise across Australia
In 2016, more than 200,000 Australians reported being victims of a scam, an alarming 47% increase over the previous year. That’s one of the findings of the Australian Competition and Consumer Commission’s (ACCC) annual Targeting Scams report. Financial losses resulting from these scams totaled nearly $300 million. The costliest of these were investment scams, totaling $59 million, followed by dating scams, which accounted for $42 million.
Seniors Are the Most Vulnerable
“Scamwatch said people aged over 55 accounted for 45% and social media played an increasing role in how scammers contact their victims, with around 30% of people caught up in romance scam victims (1352 people), targeted on social media, especially Facebook. The other common social media scam is ‘fake trader’.”Why Scammers Target Seniors
Australians, because they’ve lived longer, typically have more accumulated wealth than younger people, and scammers know it. In addition, seniors are often emotionally vulnerable to romance and dating scams, perhaps because a spouse has recently passed away. Finally, scammers believe that older people are generally less computer savvy than their younger counterparts, making them easier targets for online scams.
The Most Common Scams Which Target Seniors
Scammers usually do their research, tailoring the scam they employ to the specific vulnerability of each victim. That said, the most common scams targeting seniors in Australia include the following 6:
- Romance and dating scams: this ploy targets seniors who have recently divorced or whose spouse has recently died. Scammers entice them with the promise of a romantic relationship, usually through social media or dating websites. Once their victim is hooked, the scammers persuade them to provide money, gifts or personal information.
- Investment schemes: in these scams, the scammer persuades his victim to participate in some sort of financial opportunity, typically one with a huge payoff, in exchange for an upfront payment.
- Lottery scams: here, scammers claim that a person has won a prize or lottery (usually one the victim never entered), and can claim his or her money in exchange for a fee.
- Inheritance scams: the scammer claims that his victim has inherited a large sum of money—to collect the inheritance, the victim must part with either money of credit card details.
- Reclaim scams: these involve the promise of some sort of rebate or reimbursement from the government, a bank or some other trusted organisation.
- Door-to-door home maintenance scams: in these scams, scammers show up at the door, often late at night, selling home maintenance services. They take the victim’s money, providing either inferior service, or no service at all, and often charging for work they never performed.
The best way to help seniors avoid scams is to educate them about the common warning signs. These include the following:
- The offer seems too good to be true
- They want personal information, like credit card or bank account details
- Their messages include obvious grammatical or syntactical errors (which often means they are not native speakers of English)
- They ask for money in advance (the scammer offers money which you can collect only after you give them money)
- They provide a suspicious email address, or no physical address
- They ask for remote access to your computer (usually claiming they’ve detected computer problems which they can fix)
- They ask for payment through untraceable sources
- They use pressure tactics, telling victims they must pay immediately or lose the opportunity
What to Do If You Suspect or Are the Victim of a Scam
If you are a senior or provide care to a senior parent and you suspect or are the victim of a scam, you should first report it at ACCC’s Scamwatch “Report a Scam” website. This will help ACCC warn others in your community. You should also change your passwords and immediately contact your bank or credit union and your credit card provider. Your bank may be able to stop a money transfer, and your credit card provider may be able to perform a “charge back,” in which they reverse the fraudulent transaction. You should also report the scam to the appropriate authority, depending on the nature of the scam.