DALLAS — Every year, online financial schemes and frauds bilk millions of Americans out billions of dollars through romance scams, tech support fraud, and lottery or sweepstakes scams.
Perhaps no demographic is more susceptible to such crimes than those aged 60 and older, according to a new report from the Federal Bureau of Investigation's Internet Crime Complaint Center.
In 2020, 28% of the $4.1 billion stolen from Americans through online scams came out of the pockets of seniors over the age of 60, according to the Federal Bureau of Investigation. That amounts to about $1 billion scammed out of seniors in 2020, an increase of about $300 million for the same demographic the year before, the report said.
In Texas, the problem is especially acute. The Lone Star State ranked third in the nation for reported victims and reported losses to seniors at nearly $70 million stolen from 6,342 victims. California ranked first in the nation, with nearly twice the number of over 60 victims (12,534) bilked out of $152,644,032.
Nationally, victims over the age of 60 lost an average of about $9,175 in 2020. Nearly 2,000 victims lost more than $100,000, the report said.
To raise awareness about scams targeting the elderly, The FBI in Dallas has teamed up with the U.S. Attorney’s Offices in the Eastern and Northern Districts of Texas to create a series of public service announcements aimed at helping Texans “spot and stop scams that affect our seniors.”
The FBI’s report on online crimes targeting seniors was based on the number of complaints filed with the bureau’s internet crime center in 2020. Previous years’ data pointed to a sharp increase in such crimes against older Americans during the pandemic at a time when most Americans, particularly those aged 60 and over, stayed close to home and in many cases, close to their computers.
For many, being online more meant shopping as well as looking for companionship, more often than not in a romantic relationship.
In September, the FBI warned consumers that they have been seeing a rise in complaints from victims who have been defrauded via online romance scams by persuading the individuals to send money to allegedly invest or trade cryptocurrency.
Investigators describe the scams as such: Scammers made initial contact typically via dating apps and other social media sites. Then, the scammer gains the confidence and trust of the victim by establishing an online relationship. In many cases, the scammer will then claim to have knowledge of cryptocurrency investment or trading opportunities that will result in substantial profits. The victim is then directed to a fraudulent website or application on which they can invest money.
After the victim has invested an initial amount on the fake platform and sees an alleged profit, the scammer then suggests that the victim withdraw a small amount of money, to further convince them that the scam is real, according to the report.
To make the withdrawal, the scammers “need an often-unwitting person to act as an intermediary to first receive the funds and then send the proceeds to the fraudster” referred to by the FBI as a “money mule,” the report said.
“It is one of the most prevalent ways criminals use our seniors,” according to Camelia Lopez, the assistant U.S. Attorney for the Eastern District of Texas. “In doing so, the criminals are adding layers and bank accounts between themselves and their victims.”
The multiple layers allow the criminal to effectively launder the funds from their victims, Lopez said in a public information video released by the FBI.
Nationally, these so-called “confidence fraud” or “romance fraud” crimes resulted in $281,134,006 total in victim losses and were the majority of complaints from seniors aged 60 and over received by the F.B.I.’s Internet Crime Complaint Center.
From January 1 to July 31, 2021, the center reported receiving more than 1,800 complaints related to online romance scams, resulting in losses of approximately $133,400,000.
Last year in North Texas alone, more than 200 individuals over the age of 60 reported losing over $7 million to romance fraud schemes in 2020, the FBI said in a press release. Many of these crimes involved fraud scenarios as described in the cryptocurrency investment schemes.
While the romance scams resulted in the greatest total financial loss out of all kinds of online fraud against victims aged 60 and over, the number of complaints about non-delivery and nonpayment scams ranked second in the most frequent complaints filed to the center in 2020.
Because the pandemic required many elderly victims to shop online — some for the first time — many became the target for scammers. Scams involving counterfeit health and beauty products became more frequent during the pandemic. Elderly victims filed more than 14,000 complaints about nonpayment/non-delivery cases for a total loss of some $40 million in 2020. That was double the number of complaints about the same type of crime in 2019 or 2018.
More elderly joined social media outlets to stay connected with others during this time. This created a new avenue for scammers.
“The combination of online shopping and social media creates easy venues for scammers to post false advertisements,” the FBI report said. “Many victims report ordering items from links advertised on social media and either receiving nothing at all or receiving something completely unlike the advertised item.”
Another big area for fraudsters was in the fake calls for technical support targeting older victims, which was the third most frequent complaint to the FBI’s reporting center for online crimes.
In these schemes, a criminal poses “as support or service representatives offering to resolve such issues as a compromised email or bank account, a virus on a computer, or a software license renewal,” the report said.
In 2020, the center saw a huge leap in the number of complaints about these crimes and the amount lost. Victims aged 60 and older were defrauded $116,415,126 from such online scams in 2020, compared with 2019, when such fraudulent calls resulted in a loss of $38,410 for the same age group.