AFC CHALLENGES
Center reports that over 82,000 victims over the age of 60 reported elder fraud , with losses totaling $ 3.1 billion in 2022 , which is an 84 % increase in losses over 2021 . 4
The forms of elder abuse can range from stranger fraud to family exploitation , along with everything in between . Most people are familiar with the concept of romance and grandparent scams , where criminals rely on relationships to obtain funds . But the increasing trend of pig butchering scams , may present a heightened emerging threat to this already vulnerable population . What starts as a seemingly innocent email or phone contact turns into a full-blown scheme to invest in fake offerings , often involving cryptocurrency . 5 Targeting an already lonely and isolated population that tends to be focused on ensuring and solidifying their financial future , pig butchering exploits two basic needs : Human connection and financial security .
Beyond pig butchering , cryptocurrency scams are on the rise according to the Federal Bureau of Investigation ’ s ( FBI ) 2022 Elder Fraud Report , accounting for over $ 1 billion and approximately 66 % in losses in 2022 . 6 As cryptocurrency becomes a favored source of payment for fraudsters , it is showing up in more conventional fraud typologies , including investment and tech support scams , confidence and romance schemes , and lottery or inheritance ruses . Despite the increase in cryptocurrency fraud , consumers over 60 remain underrepresented in the cryptocurrency market . While they represent nearly 32 % of the U . S . adult population , they only represent 10 % of cryptocurrency owners . 7 Fraudsters are reaping significant benefits from feeding on the need for financial security among a population conventionally seen as naïve about technology and new investment strategies .
Another emerging scam , an adaptation of well-known tech support schemes , is referred to as the “ phantom hacker ” scam . The FBI issued an alert on September 29 , 2023 , warning the public to be vigilant regarding this new twist on an existing scam . This multistep scheme involves two to three individuals advising a victim that their accounts are compromised and that they need to move their money to a “ safer ” third-party location . 8 In the first half of this year , the FBI reported 19,000 victims with losses of more than $ 542 million , noting that almost 50 % of the victims were over 60 years old .
Further , gaps remain in the process of recovering funds for victims of elder financial abuse . The CFPB reports that key impediments to the identification of elder financial abuse and recovery include the victim having a relationship with the perpetrator , cognitive decline , subpar responder training and resources , and the method and dollar amount of transactions ( for instance , fraud involving large dollar
Lack of access to funds or assets is often a barrier to leaving an abusive situation as there is no way to pay for hotels , apartments , food or other necessities
amounts and transactions via credit or debit cards are easier to detect ), among other challenges . 9 Throughout the report , the CFPB identifies ways FIs should be helping :
▪ Identifying elder financial abuse based on changes in a customer ’ s banking patterns or behavior toward a caregiver
▪ Contacting customers when there are unusual debit or credit card purchases
▪ Training staff to identify the signs of elder financial abuse
▪ Investigating activity when reported by the customer
▪ Understanding reporting responsibilities beyond Bank Secrecy Act obligations , such as statemandated reporting
Domestic financial abuse
The National Network to End Domestic Violence ( NNEDV ) reports that financial abuse occurs in 99 % of domestic violence cases and is often cited by survivors as the primary reason survivors stay or return to an abusive partner . 10 Domestic abuse is an epidemic across the world with more than 10 million women and men suffering physical abuse by an intimate partner annually . 11 The National Coalition Against Domestic Violence reports that the cost of domestic violence exceeds $ 8.3 billion per year with survivors losing eight million days of work and 21 % -60 % losing their jobs for reasons related to the abuse . 12 But there is something FIs can do to help . The red flags associated with financial abuse are similar to red flags monitored today for elder financial abuse and human trafficking ( HT ).
30 acamstoday . org