Americans 60 and Older Are Targets of New, Fast-Growing Financial Frauds

Crooks are innovating. Financial fraud against Ameri- cans ages 60 and older is rising rapidly, largely because of newer scams using the internet, electronic commu- nications and cryptocurrency. The FBI recently said that in 2023, losses from cryptocurrency frauds increased by 45% from 2022 to $5.6 billion.

The FBI said it received almost 70,000 complaints about cryptocur- rency fraud in 2023. These types of frauds are only going to increase as cryptocurrencies be- come more mainstream and more people become aware of them. Internet fraud against the elderly doubled from 2019 to 2021 and then rose 84% in 2022, according to the FBI. The internet scammers also are becoming more sophisticated and are greatly aided by artificial intelligence and other new tools. It is important to know how the typical cryptocurrency investment scam now works.

These frauds not only are increasing rapidly but are distinguishable from other frauds. The scammers typically contact po- tential victims through dating apps or social media accounts. Sometimes they establish contact through emails or texts that appear to be mistakenly sent to the wrong person.

Whatever the ini- tial form of contact, it never mentions finances, money or cryptocurrencies. Instead, the crooks work to establish a nonfinancial relationship and trust.  They invest weeks or months in this. At some point, the scammer will mention they’ve made big profits from a cryptocurrency or a firm that man- ages cryptocurrency investments. The mention seems to be casual.

When the potential victim responds with interest, the crooks suggest visit- ing a particular website or download- ing an app. The website or app urges the viewer to invest a little money, and the scammer will encourage the poten- tial victim and offer help and advice. It’s not unusual for the scammer to send purported screenshots of his or her in- vestment account showing big profits.

Sometimes the crooks make small distributions of profits to give convince the victims that it isn’t a scam. Once the victims have invested enough, some scammers disappear. But some of the crooks take another step to increase their profits.

One ad- ditional step is to tell the victims they can withdraw their profits. But they say the investment firm is required to collect and forward taxes on the profits to the government. They say the victim must send additional money to cover the taxes before the account can be distributed. Then the crooks disappear. Another additional step after the victim realizes the operation is a scam is to have another fake business con- tact the victim and say it specializes in recovering losses from cryptocurrency scams.

Of course, the victim must pay a fee in advance. These scams are particularly prev- alent during periods when Bitcoin is making new highs and generating a lot of attention. But they’re active all the time, with the scammers saying they’re making money in cryptocurrencies in any environment.

The cryptocurrency frauds join the long-time internet and technology scams that Americans, especially those 60 and older, need to know. There’s the “grandpa/grandma I need help” scam. Someone claiming to be a close relative calls or sends an email or text saying they’re in trouble and need money right away.

The claim might be that the money is needed to pay legal or medical bills or bail them out of jail. Of course, they go to the potential victim because they don’t want their parents to know. A twist on that scam is someone pre- tending to be from law enforcement or a medical provider calling on behalf of the relative. Another standard scam is “your computer is infected.”

When you visit a website with weak security, the scam- mers can put a message on your screen saying your computer is infected and you need to act immediately. Some- times you receive a phone call or text with the message. Often, the message will purport to be from a well-known technology firm. When the messages pop up on an individual’s computer or other device, they’re usually nothing more than a message. The crooks haven’t locked up the computer, though the message says someone has.

But the scammers can’t do anything unless you follow the instructions to call them or click on the link in the message. The best thing to do is what the message says not to do: Close the browser or turn off the computer and reboot it. Ads that appear on web pages also need to be treated with caution. When an ad promises a deal that seems too good, such as 25% off an iPhone, it’s probably a scam.

Clicking on the ad often leads to a website run by crooks. They’ll either infect your device with malware, take your credit card or other personal information, or both. Of course, beware of messages that purport to be from the IRS, Social Se- curity, or another government agency. One longstanding scam is to tell peo- ple they owe the IRS money and will be arrested if they don’t pay right away. A variation is to say their Social Security number has been frozen because of problems with it. The potential victim needs to contact the sender and pro- vide personal information and perhaps money to have the number released.

Even sophisticated, financially aware people occasionally fall for one or more of these scams. In fact, some recent research concludes that people who are confident of their financial knowledge are more likely to become fraud victims than others. People are especially vulnerable when they’re distracted or act quickly. Your best protection is to act slowly when faced with something unusual, especially when the internet or elec- tronic devices are involved. Don’t let someone convince you to make a fast decision.

Be comfortable putting it off and talking about it with friends or relatives you’ve known a long time and can trust or professional advisors. See our May 2019 issue for more details.