Protecting an older adult from financial scams and fraud

Financial exploitation is one of the most common and least reported forms of elder abuse, costing older Americans billions of dollars a year. It’s devastating precisely because the money is often meant to pay for care. Knowing the schemes — and the safeguards — is how families protect a parent’s independence and their nest egg at the same time.

Why seniors are targeted

Older adults are targeted deliberately: they’re more likely to have savings, home equity, and good credit; many grew up in a more trusting era; some are isolated and glad of a friendly voice; and cognitive decline — even mild — makes it harder to spot a con. None of this is a character flaw. The schemes are engineered to work on anyone caught off guard.

The common scams

• The grandparent / imposter scam. A caller pretends to be a grandchild (or a lawyer for one) in urgent trouble — jail, an accident, stranded abroad — and begs for money wired or sent in gift cards, “please don’t tell Mom and Dad.” AI voice-cloning has made these more convincing.
• Government-impersonation scams. Fake calls from “Social Security,” “Medicare,” or the “IRS” threatening arrest, suspended benefits, or a frozen account unless you pay or confirm your number now. Real agencies don’t operate this way.
• Tech-support scams. A pop-up or call claims the computer is infected; the “technician” takes remote control and drains accounts or demands payment.
• Romance scams. An online “relationship” built over weeks or months, then a crisis that requires money — repeatedly.
• Sweepstakes, lottery, and “you’ve won” scams. You must pay taxes or fees to collect a prize you never entered to win.
• Phishing and account-takeover texts and emails posing as a bank, Amazon, or a delivery service to steal logins, plus fraudulent investment pitches promising guaranteed returns.

The common thread: urgency, secrecy, and an unusual payment method — gift cards, wire transfers, cryptocurrency, or payment apps. Any of those three is a red flag by itself.

Exploitation by insiders

The hardest cases aren’t strangers — they’re family members, caregivers, or others in a position of trust who siphon money, misuse a bank account, or abuse a power of attorney. A POA is a powerful tool that can be misused; choosing a trustworthy agent and building in oversight matters. In a facility, financial exploitation is a violation of residents’ rights and a form of elder abuse — watch for missing money or property and sudden account changes.

Warning signs

Look for unusual bank activity or large withdrawals, new “best friends” or advisors who insert themselves around money, bills going unpaid despite adequate funds, missing belongings, sudden changes to a will, POA, or account beneficiaries, secrecy or anxiety about finances, and stacks of sweepstakes mail or gift-card purchases.

How to protect against it

• Freeze credit at all three bureaus (it’s free) to block accounts opened in their name.
• Add a trusted contact to bank and brokerage accounts so the institution can flag suspicious activity, and consider account alerts or a view-only second set of eyes on statements.
• Reduce exposure — get on the Do Not Call registry, limit personal information shared online and by phone, and shred financial mail.
• Set the rule in advance: no legitimate agency or company asks to be paid in gift cards or crypto, and it’s always OK to hang up and call the real number back.
• Safeguard the POA — choose carefully, and use tools that require accountability. Plan the legal documents thoughtfully rather than under pressure.

What to do if it happens

Act fast and don’t let shame delay it — victims are targeted precisely so they’ll stay quiet. 1. Contact the bank or card company immediately to stop and try to reverse transactions. 2. Report to Adult Protective Services (for someone vulnerable) and, for theft, the local police. 3. File with the FTC at reportfraud.ftc.gov and the FBI’s IC3 for online fraud; the National Elder Fraud Hotline (1-833-372-8311) helps walk you through it. 4. Place fraud alerts and freezes on credit. Reporting won’t always recover the money, but it can stop further loss and helps investigators — and it’s the first step to protecting the next person, too.

This guide is general information, not medical, legal, or financial advice. Rules vary by state and change over time. For personalized, unbiased help, your Area Agency on Aging and your state’s Long-Term Care Ombudsman are free.