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Devastating Sweepstakes Scams Targeting Seniors

by Robin Slade

The term “elder abuse” embodies several types of mistreatment, including physical, emotional, and caregiver neglect.  But today’s economic struggles seem to be giving rise to one of the fastest growing forms of elder abuse – the financial exploitation of seniors.  Seniors have become a favorite target for criminals who commit countless forms of fraud, ranging from simple home repair scams, to more complex investments and insurance fraud.  The perpetrators are not always strangers.  They can include family, friends, neighbors, caregivers, financial advisors and other professionals.

According to a recently released study by MetLife Mature Market Institute, Americans over 60 are robbed of at least $2.9 billion a year through financial exploitation.  A number considered low since financial fraud against the elderly often goes unrecognized and unreported.  The study estimates that for every case reported, four to five cases are not.  The Council on Aging calls this form of abuse against seniors the, “rampant, insidious crime of the millennium.”

Opportunists see the “golden years” as primetime to rob all the savings and good credit seniors spent a lifetime accumulating.  The impact can have far-reaching and immeasurable effects well beyond the financial loss. It can threaten an elder’s health and dignity.  It can tear families apart.

According to Adult Protective Services, elders most likely to experience financial abuse are between the ages of 70 and 89, white, female and often can be considered “frail” or “cognitively impaired.”  Criminals are known to scan the obituaries to find potential victims, often preying upon recent widows, in hopes they lack experience in making financial decisions. The Metlife study points out that seniors having “decreased cognitive functioning, in turn, affects their decision-making capacity, leaving them potentially susceptible to people looking to defraud or deceive them.”

Tactics used by fraudsters include extortion, intimidation, forgery, theft, threats and scams.  Those with mild cognitive impairment are the most vulnerable to fall victim.  In some cases, the basis for a diagnosis of mental impairment can be falling victim to repeated scams.  Once an elder is identified as a good target by scammers, they become a part of the what’s known as the “sucker list.”  Leaving them exposed to more and more fraudulent attempts.

One of the many deceptive swindles aimed at seniors is the international lottery and sweepstakes scam.  Fraudsters perpetrating this scam target older citizens in attempts to gain access to assets, including checking, savings, retirement accounts and cash reserves.  These scam artists typically reside outside the U.S. and use telephone and direct mail to falsely notify potential victims they’ve won the sweepstakes or lottery.  They string them along collecting phony fees.  The scammer creates a “sense of urgency,” to get the victim to send money before being awarded the prize.  They’re hit with a series of fees, such as taxes, attorney fees and exchange rate differences until all bank accounts are drained. Then they convince their victims to take out home equity loans or lines of credit.  Some steal their identities to commit further fraud, or continue to exploit them as “money mules,” to launder the money collected from other victims.

Please, use vigilance when receiving unsolicited calls or mail.  We ask that if you have elder family, friends or neighbors, frequently check in with them. Look for warning signs such as a change in their demeanor, a pile of unpaid bills or shut off notices, or excessive or unnecessary work being done to their homes.

If you or an older adult you know is being subjected to financial elder abuse, visit the National Center on Elder Abuse (NCEA) for a list of state reporting telephone numbers to get help.  Contact your financial institutions to report the fraud.  File a police report, especially if personal and confidential details were provided during the scam process, such as social security numbers, which could be used to commit identity theft.

If you believe there is immediate physical danger, contact 911. 

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FPF2A President & CEO Robin Slade has spent the last decade as a leader in helping organizations develop fraud risk management best practices and tactical solutions. In addition to FraudAvengers.org, Robin is Senior Vice President and COO of The Santa Fe Group, and manages Shared Assessments, a member-driven organization for vendor risk management best practices.