The “Sandwich Generation” are Gen-Xers and older Millennials who are raising children while also helping their Boomer parents navigate aging.

There’s a lot to think about, plan for, and organize, but one of the things that can be overlooked is keeping them safe from financial pitfalls. This older generation has embraced technology in amazing ways, but the combination of incredibly rapidly changing technology and a desire to remain independent and not be a burden on their children can result in increased financial vulnerability.

FINRA’s Financial Intelligence Unit reports that, according to the 2023 FBI IC3 Elder Fraud Report, total losses reported by elderly victims increased 11% from 2022, with victims losing an average of $33,915.

Education is key to keeping seniors safe. We review some of the threats and tactics.

Vulnerability Increases with Age – Even for Those Aging Well

Older adults are actively targeted by scammers for two reasons: they have access to money, including retirement funds and government benefits, and they may have a real or perceived lack of familiarity or comfort with technology. Sophisticated scammers don’t just use tech – they are people who are very practiced in exploiting the emotions of their targets. Elderly adults experiencing loneliness and cognitive decline are of course at risk, but even fully capable adults can be exploited by playing on their emotions.

A case in point: A 93-year-old woman who lived alone, managed her home and her funds, and was still living an active, full life was convinced by a scammer to reveal her bank account information over the phone to sign up for an extended warranty on her car. The key emotional manipulation point: by buying this “policy” she would not be a burden on her children if something happened to her car. The woman fortunately told a younger neighbor what she had done, and the neighbor immediately recognized the scam, called the bank and alerted them to the potential fraud, and then accompanied the woman to her bank to close out the account and transfer the funds to a new account.

The consequences could have included extensive financial loss, as well as a compromised identity and damaged credit. The emotional consequences could have also been severe. The FINRA Foundation recently funded a study that found nearly two-thirds of fraud victims reported depression, anxiety, or other mental health issues after being scammed.

Common Scams

FINRA tracks trending scams through its Securities Helpline for Seniors, and the FBI maintains historical data from its Elder Fraud Report. Imposter scams are extremely common, and the use of AI technology and voice cloning is making them more dangerous. They rely on either familiarity by impersonating a family member or introducing a personal relationship, or authority by impersonating a government or other business entity. Examples include:

• Grandparent Scam: Personal data about grandchildren is gathered through social media, and this information is used to impersonate the victim’s relative, including by using AI technology and voice cloning.
• Romance Scam: Reaching out through social media to befriend and gain trust, and then presenting an investment scheme with the potential for high profits.
• Federal Agency Imposter Scam: Scammers pretend to be representatives of Social Security, the IRS, or other government agencies to obtain information or even have funds wired by threatening large fees, cutting off benefits, or other consequences unless payment is made. Payments are usually demanded through wire transfers, cash, or prepaid debit cards.

The Best Protection is Education and Information

In our example of the older woman above, she avoided serious consequences because when she felt unsure about what she had done, she was comfortable talking to her neighbor about it. She would not have told her adult children right away, because she wanted to be in charge of her affairs. The younger neighbor solved the problem, and the older woman did not have to tell her children until after she was safe. This made it much easier to avoid the shame of falling victim to a scam, and it opened the door to more conversation and greater safeguards.

Creating effective education means opening those pathways of communication so that elders understand what is at stake, and that protecting them does not mean limiting their independence and autonomy. It’s a good rule of thumb to remind seniors to never give out any personal information over the phone, or transfer money.

Having discussions about how everyone is vulnerable to these scams – not just seniors – can help make it easier to create an environment where seniors feel comfortable reaching out to trusted family before they make emotional decisions that will impact their money.

Use Technology for Protection

Checking over seniors’ accounts and bills is a good practice. This is easily accomplished with online banking, as multiple can have access to the account,  and alerts for purchases or money movements can be set up. It’s also a good idea to pull credit reports for seniors and to check in on their accounts at SSA.gov regularly.

 Ensure that seniors’ phones, tablets, and computers are up-to-date and have multi-factor authentication enabled. It’s pretty common for older people to never or seldom update their operating systems. Showing them how to do this, or doing it yourself during visits can help keep their electronics safe.

The Bottom Line

Keeping elders safe from scammers protects their financial and emotional well-being. Take the time to ensure that this is part of your aging plan for those you love.