Elders Top Target of Financial Fraud

Baby boomers and older Americans have spent decades accumulating an enormous stockpile of money. At the end of this year’s first quarter, Americans age 70 and above had a net worth of nearly $35 trillion, according to Federal Reserve data.

With this accruing wealth, elder Americans have become the top target of financial fraud.

In 2020, the FBI’s Internet Crime Complaint Center (IC3) received a total of 791,790 complaints with reported losses exceeding $4.1 billion. Based on the information provided in the complaints, approximately 28% of the total fraud losses were sustained by victims over the age of 60, resulting in approximately $1 billion in losses to seniors, according to the 2020 IC3 Elder Fraud Report. This represents an increase of approximately $300 million in losses reported in 2020 versus what was reported by victims over 60 in 2019.

Confidence/romance fraud was the top crime type resulting in losses of more than $281 million for those older than 60. Business email compromise scams came in second with losses of nearly $169 million.

Losses from crimes involving real estate/rentals targeting elders has increased the past three years, rising from $36 million in losses in 2019 to $50 million in losses last year.

While title and settlement agents typically don’t meet the subject until the closing, it’s important to be aware of red flags and proceed cautiously when encountering irregularities or unusual situations, such as a large cash out from a refinance, proceeds being wired to an account not belonging to the senior, or a relative or caretaker who shows too much interest in the transaction for no apparent reason. 

When a transaction closes involving elder abuse, the new owner or lender’s title may be subject to challenge by the senior that can result in substantial loss to the underwriter. In addition, the title and settlement agent may be exposed to tort or contractual liability.

The escrow or settlement agent should take note of any signs of cognitive impairment, confusion or lack of understanding of the transaction when the senior is present to sign documents before or during the closing. If a mobile notary service is utilized, the escrow agent should obtain the notary’s observations of the senior’s mental and physical state and the senior’s living situation before closing the transaction. If the senior is accompanied by an overbearing third party who has no apparent interest or role in the transaction, the settlement agent may wish to speak directly with the senior before proceeding further.