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Lucrative financial scams targeting older adults are getting tougher to spot

Financial fraud targeting senior citizens continues to be a significant problem, with criminals becoming more and more sophisticated. And the amount of money lost in these scams is staggering.

Brian Watson knows all about this — he used to work for the IRS and is now a community outreach specialist for the nonprofit ROSE, or Resources/Outreach to Safeguard the Elderly.

He spoke with The Show more about this and the conversation started with how often elderly residents here and elsewhere are targeted by financial scams.

Full interview

BRIAN WATSON: Well, it's a $3.1 billion problem, according to the 2022 FBI elder fraud report, and that's an 84% increase from the prior year. And that's assuming the numbers are accurate. We know people don't report being victimized. So the number is going to be much higher.

Why don't people report?

WATSON: Well, number one is embarrassment. Any presentation, I do ask that question, and everyone gives me that is the number one answer, but also the futility. Why, why should I report it? I'm not getting it back. Or I don't even know who to call and you know what's the point? And sometimes people don't even know they've been victimized.

And then lately I've kind of come to the conclusion, for older folks, older adults, they don't want to tell their kids they've been victimized in a scam, because they may lose their financial independence.

Because the kids might say, oh, look, mom or dad fell for this. Clearly, there's some kind of cognitive decline. We've got to get more involved. Maybe they shouldn't be in charge of their own finances anymore. That kind of thing.

WATSON: Right. It's a financial intervention. And then they take the checkbook, maybe they take the ability to have internet, maybe they take the ability to live on their own or even drive a vehicle.

So, how are crooks targeting this population? Like, I assume it's not just the old, you know, the stereotypical Nigerian princes anymore.

WATSON: No, we're so far past that. I mean, those emails still persist, but back then it was, the schemes were easy to spot and they weren't so prevalent. Now, these gangs of criminals are operating enterprises of fraud. A lot of them are international. They are ruthless financial predators. They're far more organized.

They usually will start contacting people either by phone or some sort of internet, you know, like a social, social media or some sort of dating site or something like that.

And what is their pitch? Like, what are they, what are they hawking? Like is it, we've heard a lot, for example about, like gift cards, things like that. People buying Visa gift cards, Amazon gift cards. Is that kind of how they get in?

WATSON: Well, right. So every, every scheme has three parts. It's a contact out of the blue. So phone, email, text message, social media, then they want to elevate your emotions. So usually it's greed, isolation, need. They, they want you to react, and then they always ask for money. So phone scams are not, they're not that complicated. It's just a phone, you pick up the phone and answer, but they're so good at what they do. They're professionals, they're reading a script, and they may tell you your social security is going to get cut off or your Medicare or your grandchild is in jail, they want you to react.

Or the long play ones like the romance scams, it'll start out like a message on social media or a pop up on your screen, and then they slowly build a relationship to the point where they get you to invest in cryptocurrency.

So you are working with this nonprofit. I would imagine that you are coming across folks who have been victimized, also with your time, you used to work at the IRS. Like you mentioned the amount of money overall, like how much money for an individual are we talking about that they could potentially be scammed out of?

WATSON: Right. So back in the old days, it was nickel and dime stuff, you know, like a few thousand dollars here, you know, even the IRS phone scam, you know, it was a small amount of money. But according to the FBI's elder fraud report from 2022, over 5,000 people lost over $100,000. So it's big time.

I, just starting this job, I've met people that have lost $700,000, $200,000, and I just heard of another one that's a half a million. So the stakes are much higher. They're, they're much better at what they do. And the thing is, is they're so much better at being criminals than we are at protecting our money. You just can't get in the ring with them. They, they will get you.

So, for folks who have lost like $500,000, $700,000, is that money retrievable or is it, are they just out that, that money?

WATSON: It depends. You know, a lot of it is through cryptocurrencies. And a lot of people think, oh, you know, it's gone, but there are actually ways to clot back because it has the blockchain, basically is like an electronic paper trail. But you have to find a law enforcement agency that one, has the time, and, two, has the knowledge to be able to do it.

And there are cyber experts at the FBI, Secret Service, IRS, local police departments at the various counties, but they're, they're overwhelmed, you know, they don't have enough people to track down all these victims. That's why we are focusing on the prevention side. We, it's so much easier to spend a few minutes on the front end than spending days and years on the back end trying to get money.

Well, so what then do you tell people to be on the lookout for? Like how do you try to prevent this from happening?

WATSON: OK, so basic stuff: Don't answer the phone if it's someone you don't know, don't click on emails that have hyperlinks. And then just be really cautious on social media there.

Criminals are out there trolling, and they will just send a little note to you, comment on a post, and they'll start a little innocent conversation, and two months later your online boyfriend, girlfriend and then they're doing that to dozens of other people possibly. And eventually they're going to take your money.

What do you hear from victims? Like what, what do they tell you about? Like how they found themselves in this kind of situation?

WATSON: So, yeah, it depends on the scam. Sometimes they just, they, they, they're like rule followers. I found a lot of people that fall for these have a compliant personality. They follow rules, they respect authority. If someone says they're from the bank, they believe it. If someone says they're from the U.S. government, they believe it. So they're almost like predetermined or, or, or, you know, predestined to fall for these type of schemes.

So it really behooves you to kind of be a little mean and be just, you know, hang up the phone, be a little rude.

Do you find that the folks with whom you're working? Like, are they aware quickly that they are the victims? Can it take a little bit longer, maybe if you're not, for example, checking your bank account online every so often, maybe you're waiting for a statement to come in the mail, something like that. Like, can it go on for longer? Because some of these victims maybe aren't, aren't as tech savvy perhaps.

WATSON: Yeah. Well, you know, I remember one time at the IRS office, my coworker was pleading with a lady to stop sending money to this bank account in Nigeria. And she said, no, I'm going to send my boyfriend money. It's my money. I can do what I want. And my coworker said, ma'am, there's five other women here in the United States sending money to the same bank account. He is not your boyfriend, he's a scammer. But she refused.

But then other victims, they kind of realize it and then they're in so deep, they really don't know what to do. And a lot of times, these scammers will tell you not to talk to anyone else. A huge red flag. And it's one of the hardest things to do is get someone out of a romance scam, because their emotions are so high and they're not making good decisions.

As sad as it is to say, is it safe to say, do you think, that like these scams will just continue on for time immemorial? Right? Like it's, it's gonna keep going. There's really no way to actually put an end to this.

WATSON: No, it, it's, we really just have to educate people not to get involved. We know they're going to keep doing it because it's so profitable. And we have this huge generation of older adults that retired that did not grow up with technology, very trusting generation.

So eventually it will wane at some point. But now we're also dealing with artificial intelligence. So those really poorly written Nigerian emails are much better looking now, and then there's always going to be a new variation. So it's a battle for all of us.

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Mark Brodie is a co-host of The Show, KJZZ’s locally produced news magazine. Since starting at KJZZ in 2002, Brodie has been a host, reporter and producer, including several years covering the Arizona Legislature, based at the Capitol.