IRS scams, grandparent scams, elderly fraud, consumer fraud, elder abuse Woman holding her mother's hand Woman holding her mother's hand Woman holding her mother's hand Woman holding her mother's hand
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Protecting Our Parents: Elder Abuse Scams

How the Most Common Fraud Schemes Work

“I'm 83 years old. I can't cut it in jail."

This was what an elderly woman recovering from heart surgery told her AARP representative. Shaking in fear, she said she had received a telephone call from the Internal Revenue Service warning her that she was behind on her taxes and would be put in jail if she did not pay immediately.

It wasn't the IRS. It was an impostor looking to gain access to her financial information.

Consumers in America lose billions of dollars a year to various types of financial fraud, and according to a study conducted by the AARP, people over 50 years of age account for more than half of all victims. Amy Nofziger, who is responsible for program management and operations for the AARP Foundation Income Impact area programs, said that AARP receives 3,000 to 4,000 calls a month reporting fraudulent activity, and the calls have increased in the past five years.

While there are numerous types of fraud that affect the elderly, Nofziger highlighted a few of the most common scams.

Grandparent or “Person in Need" Scams

In this type of scam, an elderly person receives a phone call from someone purporting to be their grandchild or a loved one in need. The impostor says that they are in jail, the hospital, or some kind of difficult situation and they need the person to wire or send money immediately. In some situations, the elderly person will provide the caller with the grandchild's name unwittingly, but in other more sophisticated scams, the caller will have obtained the name of a grandchild or loved one through social media or an obituary prior to the call.

IRS Scams

The IRS and consumer protection groups have reported that this type of fraud was worse than ever before in the lead up to 2015 tax day. In an IRS scam, an impostor calls an elderly person claiming to be an IRS agent. Victims are told that they owe back taxes and that they must send the caller money immediately to avoid penalties, including jail time.

Prize or Lottery Scams

In these types of scams, victims are informed that they have won a prize or lottery, but taxes and surcharges on the prize must be paid in advance. This contact may come via phone, mail, email or text message. Often, victims are asked to provide personal information or bank account details to validate their information or receive their payment.

Warning Signs to Look For

These scams often have the same red flags to look out for. These include the immediacy in the demand for money; unsolicited calls requesting personal, bank or credit card information; and refusal to provide written documentation. The AARP says educating the elderly about these warning signs has proven effective in preventing fraud.

In addition to discussing red flags, Nofziger has several suggestions for the elderly and their loved ones to protect against falling victim to a scam. Nofziger suggests placing a note near telephones at the residences of elderly relatives. The note should be a reminder not to give out any financial information or provide payment without first consulting with a designated loved one. Noting that the elderly are often too polite to say no or end telephone conversations abruptly, Nofziger also said that rehearsing a refusal speech can prepare them to safely handle unsolicited telephone calls.

Nofziger also suggests monitoring the bank accounts of your elderly relative online. This provides a less intrusive way for people to keep track of their financial accounts. Another option is to provide an elderly loved one with a prepaid debit card so he or she still has the autonomy to make his or her own purchases, but with a built in monetary limit.

Find more information and report abuse: The Department of Justice has established an Elder Justice Website for victims and their family members to find more information. is another government site where you can report financial fraud. The AARP Foundation also has more information on elder abuse and exploitation.

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