Elder Fraud Financial Losses Continue to Rise

Last week, the FBI released the 2023 IC3 Elder Fraud Annual Report that reinforced what some of us have been preaching for years – frauds targeting individuals over age 60 are increasing, as are the corresponding financial losses they are incurring.

Most concerning in this report is that these are only the cases submitted by the public to the IC3 unit at www.ic3.gov . The actual number of cases and financial losses are higher than those reported, as not all financial crimes targeting the elderly are reported for an array of reasons.

The report illustrates that fraud against the elderly is not going away; instead, it is increasing, as are the financial losses being incurred. According to the IC3 2023 Report, those over age 60 reported $3.4 billion of financial losses – an increase of nearly 11% since 2022. The over-60 age group lost more money from these activities than all the other age groups combined!

The 101,068 elderly fraud complaints filed with the IC3 increased by 14% in one year. Moreover, 40% of the complaints filed with the IC3 were made by those over the age of 60. Making matters worse, the over-60 group incurred 58% of the total financial losses reported!

In a six-year analysis of complaints filed by those over age 60, the volume of complaints has increased nearly 70% from 60,000 in 2018 to 101,068 in 2023, while corresponding financial losses increased 36%.

According to the IC3 Report, the average 2023 financial loss was about $34,000, and nearly 6,000 elderly individuals lost more than $100,000.

Why are the volume and loss statistics trending in the wrong direction? Simply because criminals are successful in targeting the elderly – many times the most vulnerable and trusting individuals in our society.

Surprisingly, and consistent with recent years, while the elderly filed the most complaints with the IC3 and incurred the most financial losses in 2023, the second highest age group of victims was 30 – 39. However, their losses were one-third of those over age 60.

Tech support fraud, personal data breaches, and romance scams were the three most common crimes reported, while investment frauds were by far the scam that resulted in the highest individual transactional financial loss.

While many previously reported financial crimes such as identity theft, phishing, spoofing, and credit card fraud continue to be common, the IC3 Report statistics indicate Tech Support frauds and Investment scams are the two that are materially increasing.

The fact that financial losses associated with investment frauds have increased by over 400% in two years is not only alarming but a reminder that if something “sounds too good to be true,” it probably is. This is certainly true for unsolicited promising investment offers made online, via email, or over the phone or text. Stay Away!

While the reported governmental impersonation fraud volume has been flat, the dollar losses have increased by 160%.

There is nothing more disheartening than to see an elderly person working a lifetime to accumulate wealth taken advantage of by a scammer, and, as a result, liquidate their checking, 401k, or investment account, sell, or re-mortgage their home.

The elderly need to continue to be encouraged to put aside their embarrassment and fear, and report these crimes to their local law enforcement, the FBI, and the IC3 website if and when they have been a victim of a financial crime. These law enforcement partners are the only defense that tracks down and catches these criminals while potentially mitigating the elderly individual’s financial loss (IF the crime is reported quickly enough).

By Frank Suponcic , CPA, CFE, CFF, Partner, Valuation, Forensic & Litigation Services