In 2021, Comparitech reported that “2 in every 10 elders fell prey to financial frauds in the last year”, and in the US the number of such cases has risen by 10%, going from 7.86 million (2019) to 8.68 million (2020). The FBI has given further insight into the matter stating that, on average, each year, $3 billion is lost by seniors to financial exploitation.
Senior fraud is a widespread phenomenon, principally because fraudsters believe older adults are more emotionally vulnerable, probably have sizable monetary savings and may be inexperienced in navigating the ever-changing techno-financial landscape. Even though its prevalence is alarming, the current numbers are presumably dwarfed in comparison to reality, as an extensive amount of instances go unreported. This could be due to a host of reasons, some of the most common ones being, the reluctance to report being duped for fear of embarrassment, and simply not knowing how to report.
This blog aims to offer constructive information on the operation of numerous scams along with inputs on preventive measures against them.
Most Common Methods of Elder Fraud
1. Phishing Links
A third-party website imitating a genuine site such as a bank or e-commerce portal aims to record the secure financial credentials of users. Most often these links are circulated through SMS, email or social media. To protect yourself from phishing attacks, avoid filling financial data on unknown sites & delete suspicious messages/emails immediately.
2. Vishing Calls
Imposters approach targets via phone call or social media, posing as bankers, insurance agents, government officials etc, seeking secure credentials sometimes pressuring customers to do so by citing emergencies such as blocking illegitimate transactions or penalties. They often try to gain the customer's confidence by mentioning details like name or date of birth. As a precaution, you must note that bank officials and other genuine financial entities never ask customers to share confidential information such as passwords/CVV/OTP.
3. Use of Unverified Mobile Apps
Unknown apps can be downloaded on your smartphone, without your knowledge through unverified links shared via SMS or social media, that redirect to unauthorized apps. These apps, once downloaded, could give hackers complete access to your device. To protect yourself from such an invasion, make sure to download apps only from Google Play Store or IOS App Store.
4. ATM Card Skimming
Scammers use skimming devices, keypad overlays, or small pin-hole cameras to capture your PIN, duplicate your card & withdraw money from your account. To get ahead of this, be aware of the appearance of the ATM, cover the keypad while entering your PIN, & do not type the PIN in someone else’s presence.
5. Juice Jacking
Upon being connected to unknown charging ports, through means of the charging port of a cell phone, unknown apps or malware could be installed which gives hackers access to data on your device. Avoid using public/unknown charging ports/cables, like at an airport or cafe.
6. Lottery Fraud
Fraudsters reach out to people with the news of them having won a lottery or a holiday package and request for confidential details to be filled on an unknown website as verification to receive the product. They may also directly ask for payment under the ruse of shipping charges, processing fees or taxes etc. Being heavily skeptical of such “too good to be true” offers will help you avoid being trapped by them. Please note that it is not possible to win such benefits if you did not apply for them.
7. Ponzi/Multi-Level Marketing Schemes
Such schemes pose a lucrative option, offering quick money upon recruitment of more members with the initial investment being requested seeming small in comparison. The commission is paid on the basis of each member you recruit, not on the sale of products. This model uses money from new investors to give returns to old investors, and so on begins a cascading effect. More often than not, these schemes tend to fail, duping investors of their finances. Be cognizant of the risks & returns involved in an investment: the higher the return, the higher the risk. Notice the first signs of potential fraud, such as abnormally high returns consistently, or payment without a tangible sale of goods.
FAQs On Financial Exploitation
1. How can I help protect my computing device?
Using your computer without taking proper precautions can leave you vulnerable to personal and financial information theft. You can follow the given steps to protect your devices:
- Download a reputed anti-malware security software from a trusted source, such as Norton360 or McAfee
- Only download files from trusted websites (HTTPS://- URL with a Padlock Symbol)
- Avoid using public wifi, for financial transactions especially
- Switch off bluetooth and wifi if not in use
2. How do I identify and avert such scams?
You must be aware of the Modus Operandi of generally rampant financial frauds, to get ahead of them. Moreover, some common practices to avert such scams are given here:
- Be watchful of unknown links, emails and text messages. Immediately delete suspicious ones.
- Consider an official asking for confidential information like PINs, Passwords or CVVs an immediate red flag.
- Avoid saving card details on devices.
- Never enter financial details in another person's presence. In case of an unavoidable situation, make sure to take measures to hide said details from the other person.
3. What do I do if I witness or become a target of financial fraud?
Please note, that in either circumstance, your first step has to be informing the local police. A police report will: a) help save others from falling for the same scheme & b) make you eligible for Fraud Liability Cover, that is if your financial institution provides the service.
The next step is to inform other concerned agencies, like the bank, RBI, SEBI etc. Here are some commonly needed online complaint links:
- Reserve Bank of India (RBI) [https://cms.rbi.org.in/]
- Securities & Exchange Board of India (SEBI) [https://scores.gov.in/]
- Insurance Regulatory and Development Authority of India (IRDAI) [https://igms.irda.gov.in/]
- National Housing Bank (NHB) [https://grids.nhbonline.org.in/]
- Cyber Police Station [https://cybercrime.gov.in/
Remember, knowledge is strength! If you know how fraudsters function, you could take precautions to protect yourself from them.