The first meeting of the Scams Against Older Adults Advisory Group, chaired by the Federal Trade Commission, is scheduled for September 29 at 2:30 p.m. and will be livestreamed on the FTC website.
The Stop Senior Scams Act, passed in March, established the group, which includes representatives from various interest groups such as AARP and AmeriCorps, as well as government institutions such as the Justice Department and the Treasury Department.
The group’s mission is to expand consumer education, improve industry education, identify new fraud prevention technologies, and develop fraud prevention research for financial advisors.
A Senate Aging Committee hearing held on Thursday announced the group’s upcoming schedule and also highlighted senior citizens’ unique vulnerability to financial crime.
Professor Marti of the University of Minnesota testified at the hearing that seniors’ increased vulnerability to fraud is largely due to seniors being more socially isolated than younger people and therefore having fewer people to alert them to fraud, and often have less technical skills and suffer from cognitive decline with age.
The SEC recommends financial firms educate their employees about the signs of cognitive decline in older customers.
DeLiema also noted that seniors tend to lose more money to scams than younger people and are particularly vulnerable to romance scams, or scams where someone poses as a romantic partner to build trust and obtain financial information. Gift cards and reloadable cards are the most common methods used to fraudulently obtain money from seniors, accounting for 27% of senior fraud. However, seniors are less likely to report them if they are victims of financial fraud.
DeLiema also testified that the emotional and psychological damage associated with financial fraud through stress, shame and broken marriages is comparable to the trauma experienced by survivors of physical and sexual assault.
Although love scams result in losses for seniors, business-related scams have grown the fastest during the pandemic. In a business-related scam, a scammer typically poses as a bank employee to obtain sensitive financial information.
One victim of one such scam, Aurelia Costigan, testified during the hearing. She stated that she was called by a scammer who told her that there were suspicious charges on her account and that she should set up a cell account to secure her bank account. The scammer asked for her social security number as part of the claim process and then processed fraudulent charges using the number Costigan provided.
The Senate Age Committee has also established a hotline to report financial fraud targeting seniors.