Elder Fraud by the Numbers

Each year, the FBI’s Internet Crime Complaint Center (IC3) publishes an elder fraud report that documents scams and other forms of financial elder abuse committed against individuals over the age of 60, including monetary losses incurred. The IC3’s 2023 report — its most recent — paints an eye-opening picture of the true scale of elder financial exploitation. If you or a family member have been a victim of elder fraud, a California financial elder abuse attorney can help you. 

Fraud Complaints by Age Group

Individuals over the age of 60 constituted by far the largest cohort of victims, with a total of 101,068. The next largest cohorts, in decreasing order, were: 

• Ages 30-39: 88.138
• Ages 40-49: 84.052
• Ages 50-59: 65,924
• Ages 20-29: 62,410 
• Under 20: 18,174

Victims over the age of 60 lost a total of $3,427,717,654, which is an increase of 11% over 2022. The average dollar loss was $33,915. A total of 5,920 victims lost more than $100,000. 

The Most Common Complaints Among Victims Over 60 — And What They Cost 

Investment fraud schemes are a broad category. Some common examples include: 

• Annuity fraud 
• Advance fee fraud
• Ponzi schemes
• Pump and dump schemes

Annuity Fraud

For senior citizens in California, annuity fraud – the marketing of investment schemes that rely on a false sense of safety and security targeted at vulnerable retirees – is a real threat to their retirement futures. Annuities have become a vehicle for exploitation by fraudsters seeking to manipulate the elderly into selecting a particular annuity.

Sales of unsuitable annuities to seniors by life insurance agents and others often involve aggressive sales tactics, misrepresentation of financial products, inadequate disclosure of important information,  and outright fraudulent schemes promising high returns with low risks. Senior citizens, some of which are often less tech-savvy and more trusting of official-looking documents and sales pitches, are particularly susceptible. The selling agents may exploit loopholes in regulations or use sophisticated tricks to persuade seniors to transfer their savings into unsuitable or non-existent financial products.

The consequences for elderly victims can be devastating. Not only do many lose their life savings or face financial ruin from these schemes, but many suffer emotional effects as well, losing their trust in financial institutions and in the society that enabled the crimes to occur.

Advance Fee Fraud

California’s seniors are especially vulnerable targets for advance fee fraud. These schemes exploit their desire for financial security and trust in purported opportunities. Advance fee fraud typically involves victims being asked to pay upfront fees or taxes in exchange for promised loans or investment returns that never materialize.

Through the encouragement of aggressive sales tactics and promises of fast or artificially high returns or ‘guarantees,’ some senior citizens, many of whom are on fixed incomes and looking for ways to supplement savings for their retirement, become entangled in the schemes. Public education continues to raise awareness of such scams, but many still get trapped in these bogus investments that take their hard-earned money and, sometimes, their sense of pride.

California law enforcement and consumer protection agencies are working hard to catch perpetrators of advance fee fraud and educate seniors so that they can learn to recognize and avoid them. 

Ponzi Schemes

In California, senior citizens are finding themselves the targets of Ponzi schemes or investment scams that offer high returns with few risks. Such scams use funds from new investors to pay supposed returns to earlier investors, and as long as they continue to attract new victims, they can appear profitable while investors watch gains increase their balances. The reality is that these scams inevitably collapse, leaving the latter investor/victims with enormous losses.

Senior citizens who may be using their retirement funds and looking for a steady income might be tempted by the lure of guaranteed returns. Fraudsters’ pitches are most effective among people who are susceptible to trusting them. Many schemes, which may initially have been launched through robocalls, eventually spread via word of mouth as the initial investors try to enlist their families and social circles to share in the ‘opportunity.’

The impact of Ponzi schemes on elderly victims in California is profound, leading to devastating financial consequences that can jeopardize their retirement savings and overall financial stability. Moreover, the emotional toll is significant as victims grapple with feelings of betrayal and loss of trust in financial institutions in general.

Pump and Dump Schemes

Pump and dumps are securities fraud schemes that exploit manipulated stock prices for private gain. The scam is generally characterized by fraudsters promoting a stock to artificially drive up its price by spreading unreliable information, fabricated news, or aggressive marketing (‘pump’). When the price reaches a desirable level, perpetrators sell their holdings (‘dump’), and the stock price falls, leaving other investors with substantial losses. 

Often, older people tend to have funds to invest or save for retirement and are worried about current income and savings, so they are especially open to these schemes. For elderly victims who lose their life savings to pump and dump schemes, the consequences can be crippling. Not only do they lose their funds, but they ultimately lose their faith in the market. 

Regulators have taken steps to help shield elderly people against scams, increasing regulatory oversight, launching education campaigns about recognizing investment fraud, and taking action against those who perpetuate it.

For 2023, the IC3 reported 6,443 complaints of investment fraud totaling $1,243,010,600 in losses. Unfortunately, investment scams can be difficult to spot. Our California financial elder abuse attorneys can help you recognize and address investment scams targeting seniors. 

Fight Elder Fraud With Assistance From a California Financial Elder Abuse Attorney 

For more information about common frauds affecting seniors, including your options for pursuing civil actions against fraudsters, please contact a California financial elder abuse lawyer at the Evans Law Firm, Inc., by using our online contact form or calling 415-441-8669 or toll-free at 1-888-50EVANS (888-503-8267).