Older Americans are increasingly falling prey to perpetrators’ elaborate scams designed to drain their retirement savings, the details and scale of which sometimes require the intervention of federal law enforcement. That’s according to an investigative report released this week New York Times.
The report said the interviewees “fell into an elaborate hoax, as if they were created by testing different plot devices in a writer’s room.” “Scammers may impersonate government officials, technical support staff, or romantic partners. They instruct victims on how to circumvent financial institutions’ fraud prevention measures and use manipulative psychological tactics—isolation, a sense of urgency, or exploiting people’s willingness to trust or connect—to Let the scam continue.
Barry Heitin, a 76-year-old retired attorney, is one of the people profiled in the story. He detailed how he lost an estimated $740,000 in retirement savings due to the continued efforts of these bad actors.
The report explains that Heiting lost the money in just three months, spending “nearly every working day running errands and withdrawing funds from his bank account as part of a complex scam”. “He believed he was helping the federal government protect his money and catch thieves who were after it.”
Such scammers exist in a variety of online arenas, including dating sites, social media platforms, messaging apps, and through the use of invasive malware – just to name a few.
“The nature of these schemes makes it nearly impossible to recover funds, leaving victims with little recourse,” the report explains. “Stolen funds are often transferred to overseas accounts or laundered through cryptocurrency wallets, where they are quickly lost will be cleared.”
Taxes sometimes exacerbate losses. Withdrawals from retirement accounts—especially in such large amounts—often come with hefty taxes that victims have few resources to pay after being defrauded.
“According to the FBI’s Cybercrime Complaint Center, potential losses from cybercrime will exceed $12.5 billion in 2023, a 22% increase from 2022 and more than three times 2019 levels,” the report states. “But these figures are an underestimate. problem because many victims fail to report their losses.”
In addition to these challenges, bad actors often select victims over the age of 60 because they believe they have huge savings. FBI data cited in the report shows that this age group will suffer the greatest losses in 2023, totaling more than $3.4 billion.
federal agencies, including Consumer Financial Protection Bureau (CFPB) is also working to sound the alarm on the rise in financial exploitation of seniors.
