Washington — The increasing victimization of Americans over 60 by online and phone fraud is a growing concern, with losses totaling billions of dollars each year. Federal investigators emphasize that scammers are becoming more sophisticated in their tactics to extract large sums of money from their victims.
According to a recent study by the AARP, elder fraud scams lead to an estimated annual loss of $28.3 billion. Shockingly, 72% of this amount, more than $20 billion, comes from individuals known to the victims, such as family members, friends, or advisers. The study also reveals that many scams go unreported. In response, the FBI urges anyone encountering suspicious online activity to disengage and report it to law enforcement.
Rich Brune, a 75-year-old retired Navy veteran living in Virginia, fell victim to an online scam that cost him nearly $800,000. Sophisticated criminals posing as Microsoft workers contacted him, claiming his computer and financial accounts had been hacked. They convinced Brune to transfer his life savings into a supposedly secure cryptocurrency account, which turned out to be a trap.
Within five months, Brune’s money disappeared, and he received a notice from the IRS stating that he owed approximately $200,000 in taxes due to the stolen funds being withdrawn from his retirement accounts. Devastated, Brune shared, “I will probably be forced to take out a reverse mortgage. As soon as I pay off the IRS, I will be virtually penniless.”
The IRS, while refraining from commenting on specific cases, expressed its commitment to warning taxpayers about scams. The agency stated, “The IRS helps wherever we can for people trapped in these heartbreaking situations; ultimately, our work is limited by what is allowed under the law.” Unfortunately, the federal tax code currently lacks exceptions for individuals who inadvertently withdraw retirement funds as part of a scam.
Rebecca Keithly, a supervisory special agent in the FBI’s economic crimes unit, emphasized that older adults suffer the most significant financial losses. Cryptocurrency-related investment scams targeting older adults rose by a staggering 350% last year, surpassing all other age demographics and scam categories.
Following the fraud, Brune was interviewed by the FBI, and he sought assistance from his local congressman, Rep. Don Beyer of Virginia. Beyer stated, “I am constantly working on improvements to the tax code, with a particular focus on fairness and helping those who need it most. Even small changes in the tax code can have huge ramifications for individuals; we have to do all we can to get that right.”
Microsoft confirmed that the scammer who deceived Brune and claimed to be a Microsoft employee had no association with the company or its customer support team. A Microsoft spokesperson emphasized, “Microsoft will never proactively send unsolicited messages or make unsolicited phone calls to request personal or financial information, or to provide technical support to fix your computer. Any communication must be initiated by the customer. Any error message initiated by your device will never have a number to call.”
While Brune’s story is distressing, it is not unique to investigators combating elder fraud and raising awareness among the public. The FBI has witnessed a significant surge in what they refer to as “Phantom Hacker scams.” The scams begin with tech support scammers informing victims that their accounts are under the threat of being hacked. Subsequently, another person posing as a representative from a financial institution convinces the victim that their financial accounts have been hacked. As a result, victims are coerced into transferring their money to alternate accounts for “security” purposes, only to have their accounts drained by the scammers.
The FBI issued a recent public safety announcement highlighting the fraudulent messages propagated by these actors impersonating employees of tech companies and financial institutions. Victims are driven by fear to transfer their money, ultimately leaving them financially destitute.
According to the FBI, these criminal schemes usually originate from call centers in India and South Asia, requiring collaboration with international law enforcement for effective investigations. In 2022, Indian authorities, in partnership with U.S. investigators, conducted numerous raids on call centers and arrested individuals involved in elder fraud scams.
Amy Nofzinger, AARP’s director of fraud victim support, explained that scammers initially win the trust of their victims before exploiting them for personal information and money. She advises seniors that any calls or texts requesting Social Security and Medicare numbers are always fraudulent and urges them to seek help from someone trustworthy immediately.
Despite efforts to combat elder fraud, reported crime rates targeting older Americans continue to rise, with an 84% increase in 2022 compared to 2021, according to federal data. Investigators advise individuals to avoid unsolicited pop-ups or messages in texts and emails, refrain from downloading unknown software, and avoid granting remote access to personal computers. The FBI also stresses that the U.S. government will never ask individuals to transfer money to a government-run account or cryptocurrency exchange, as such requests are likely part of a scam.
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