The Federal Bureau of Investigation (FBI) is sounding the alarm about rising levels of elder financial abuse, particularly in the form of scams targeting seniors. This is according to a report from CBS News.
Every year, roughly $28.3 billion is lost to scammers, according to a recent study by AARP. More than $20 billion of that total — or 72% — comes from perpetrators who are known to the victims, including family members, friends or other advisors.
Many such scams also go unreported for various reasons including shame or embarrassment, but the FBI is encouraging victims to speak up.
One retiree, 75-year-old Rich Brune of Virginia, was profiled in the report. He disclosed falling for a scam in 2022 that has cost him nearly $800,000 after he was targeted by scammers posing as Microsoft workers.
They contacted him claiming his online and financial accounts were compromised, and then directed him to transfer large swaths of his savings into cryptocurrency accounts, which were accessible to the scammers.
Brune now owes the Internal Revenue Service (IRS) roughly $200,000 in additional taxes since the cash was withdrawn from his retirement accounts. He later told CBS News that he feels his options for securing his retirement are limited.
“I will probably be forced to take out a reverse mortgage,” Brune told CBS News. “As soon as I pay off the IRS, I will be virtually penniless.”
While declining to comment on any specific taxpayer situation, the IRS later told CBS News that while it will aim to assist anyone determined to be the victim of a scam, it must abide by all relevant laws. The federal tax code currently has no exceptions for scam victims who may have unwittingly withdrawn money from their retirement accounts.
“The IRS helps wherever we can for people trapped in these heartbreaking situations; ultimately, our work is limited by what is allowed under the law,” an IRS spokesperson told CBS News.
Rebecca Keithly, supervisory special agent in the economic crimes unit of the FBI, said that Bureau data indicates seniors are disproportionately targeted for scams.
“Older adults are losing the most money,” she told CBS News. “Last year, we saw a 350% increase in cryptocurrency-related investment scams attributed to older adults alone. That was the biggest increase among all age demographics and all scams.”
A spokesperson for Microsoft confirmed that the company “will never proactively send unsolicited messages or make unsolicited phone calls to request personal or financial information, or to provide technical support to fix your computer,” they told CBS News.
“Any communication must be initiated by the customer. Any error message initiated by your device will never have a number to call.”
The recent spike in elder financial abuse has also created challenges for the financial advisor community. One advisor said this has cemented a need for financial professionals serving seniors to continuously monitor client risks, presenting a unique challenge for financial advisors.
