FINANCIAL CRIMES AGAINST THE ELDERLY

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1 FINANCIAL CRIMES AGAINST THE ELDERLY KNOWING HOW TO IDENTIFY VICTIMS AND WHAT THEY ARE EXPERIENCING ELDER VICTIMIZATION Elder victimization, like other crimes that are frequently perpetrated by acquaintances, family, friends, or other people known to the victim, often remains hidden. The extent and nature of elder victimization has only recently been recognized as a problem, and, as a result, there are few national-level studies of crimes against the elderly or official statistics. Focus of this presentation is on elder financial crimes, including frauds, identity theft, and con artists. 1

2 ELDER VICTIMIZATION Victimization of older persons spans all types of crime, but financial exploitation has emerged as a particularly difficult problem. Elders are vulnerable to these types of crimes for many reasons, which range from their having more resources to exploit, to medical needs, to diminished capacity. While elders, overall, have the lowest victimization rates of any age category, the nature of elder victimization renders these crimes especially devastating and difficult for many victims. OVER 65 IS PROBABLY NOT THE RIGHT NUMBER In 2010, people 65 years and older made up 15 percent of the U.S. population. This age group experienced the lowest rate of violent victimization at 2.4 such victimizations per 1,000, compared to year olds, who experienced the most violent victimizations at 33.9 per 1,000. Elder finanicalabuse is important to recognize because it is a crime committed against venerable victims 2

3 ELDER ABUSE INCREASES AS THE BABY BOOMERS GET OLDER Americans 65 years old or older are a fast-growing demographic group. In 2011, the baby boom generation began to turn 65. By 2030, it is estimated that there will be 72 million seniors. This is equivalent to one in five Americans! Source: PERSONS OVER 85 Persons 85 years old or older An estimated five million Americans fall into this age group. This group accounts for two percent of the U.S. population. Persons 85 years old or older are the fastest-growing segment of seniors. Source: 3

4 WHAT WILL HAPPEN TO SENIORS OVER TIME? Seniors will live longer. Eventual declines in cognitive and physical functions could make them more vulnerable to victimization. Seniors may become less in touch with innovations and less aware of their vulnerabilities. Services will require more flexibility and adaptation, may of which they may not understand. CONTEXTUAL FACTORS ASSOCIATED WITH INCREASED RISK OF ELDER VICTIMIZATION: being unemployed or retired (81 percent); a prior traumatic event (62 percent); low household income (46 percent had less than $35,000 per year combined for all members of the household); low levels of social support (44 percent); use of social services (41 percent); needing assistance with activities of daily living (38 percent); and poor health (22 percent). 4

5 REDUCED COGNITIVE SKILLS HOW SENIORS SEE THEMSELVES Two-thirds of seniors believe they will inevitably be victims. Many seniors alter their lifestyles because they fear being victimized. Almost half of those age 75 or older are afraid to leave their homes after dark. One-third of seniors say fear of crime has contributed to a sense of loneliness and isolation. Source: Age Concern England ( However, like most of us, they think that they are too smart to fall for a scam. 5

6 THE ILLUSION OF INVULNERABILITY Tools used by con artists: 1. Heightened emotions-being in an emotional state makes us less able to make rational decisions- getting under the ether 2. Persuasion-often victims of con artists are less likely to spot persuasion tactics than the general public everyone I have worked with now has over 1 million dollars and a new luxury car REASONS WHY CRIME PREVENTION IS IMPORTANT TO SENIORS Potential recovery from physical or financial injury is often limited. Loss of money or physical faculties have more severe effects than on other age groups. Embarrassment often makes this group more vulnerable. Criminals see them as easy targets- especially for telemarketing crimes 6

7 FINANCIAL ABUSE FINANCIAL CRIMES WHICH TARGET ELDERLY Fraud Scams Identity theft 7

8 CON ARTISTS Financial criminals generally seek to take cash, credit, credit rating, or other assets by deception. These are very capable criminals Many have excellent people skills Robbery involves a confrontation and the threat or use of force, but financial crimes often involve people who are pleasant and seemingly helpful. DECEPTION AND STEALTH Research suggests that seniors underestimate the skill of experienced con artists. Seniors may think that victims of these crimes were greedy or gullible, and may not realize how easily they can be manipulated by master criminals. Criminals generally use two techniques when they commit financial crimes: deception and stealth. A criminal uses deception when he or she steals something by tricking the victim; these crimes include general fraud, scams, and telemarketing crimes. A criminal uses stealth when he or she takes the victim s assets or information illegally without that person s knowledge. Identity theft is a crime that takes place by stealth. 8

9 SOME REASONS WHY SENIORS MAY BE TARGETED Seniors often have accumulated resources. Many own their homes, have insurance, pension plans, savings, stocks and bonds, and assets that may not be closely monitored. Vulnerabilities based on lifestyle: Many are accessible by telephone and mail, have time to listen, are too polite to hang up, keep assets readily available, have limited experience with investments, and are deeply concerned with maintaining finances to last them through their lives. OTHER REASONS WHY SENIORS CAN BE VICTIMS Many are isolated by disability, fear of violence in the community, lack of peer friendships, or lack of transportation. Many are trusting or complacent or forgetful of details and may be embarrassed to admit they were victims. Some have decreased cognitive skills. 9

10 FRAUD Fraud involves deceit in the commission of a financial crime. Those who commit fraud offer prizes, deals, opportunities, and bargains. They may advertise with a teaser (e.g., Earn money working at home! ) or with a phone call announcing a golden opportunity to invest. Or they may develop personal relationships with, and then prey on, individuals they meet in various ways. FORMS FRAUDS TAKE Fraud can take many forms. Examples include home repairs, auto repairs, new carpet or appliances at bargain rates, work-at-home schemes, weight loss and similar health-related programs, stock and related investments, overseas investments, overseas lottery prizes, amazing deals on commodities trades, and more. 10

11 TELEMARKETING AND DECEPTION Older people are major targets they make up about 12 percent of the population, but 37 percent of telemarketing victims. STEALTH The person takes or takes control of an asset without the victim s knowledge or consent. Stealth-based financial crimes include identity theft; pretext theft (in which someone enters a home on some pretext, such as asking to use the bathroom, then takes property or personal information); computer hacking (illegally accessing information on a computer); and similar criminal activities. 11

12 SAME IDEA- JUST DONE DIFFERENTLY In the past, the thief enters a home on some pretext, such as My car broke down. May I use your phone? Then he or she takes advantage of this opportunity to steal property or personal information from the homeowner. In today s world, the thief enters by use of the telephone or by computer hacking, the thief then illegally accesses information using a computer or gets the information from the victim by claiming to be legitimate. STEALTH-BASED CRIMES Stealth-based crimes are usually difficult to detect unless the possible victim monitors small personal property and financial status and bills closely. Stealth-based crimes may go unreported because the victim may be unsure of whether or when a theft occurred. 12

13 IDENTITY THEFT-A CRIME BASED ON EXPLOITING CREDIT There are many ways that a criminal can capture key information about an individual. A pre-approved credit card mailing A reply to a phony request to verify account information A bill from a credit card company A receipt with a name and card number A list that is sold Mail or bills from discarded trash Stolen wallets or purses The goal is to obtain information about a person s identity. Social Security number Bank account number Credit card number Driver s license number WHAT CRIMINALS CAN DO ONCE THEY HAVE TAKEN AN IDENTITY The criminal then exploits the identity by Piling up charges on an account Taking money from a bank account Opening a new account Applying for a loan or mortgage Declaring bankruptcy 13

14 WHAT ARE THE TYPES OF SCAMS OUT THERE? IT TAKES TIME TO FIND OUT THAT AN IDENTITY THEFT HAS OCCURRED Eventually the exploitation is discovered when the victim Receives a bank statement with unknown transactions Finds newly created credit card accounts Tries to apply for a loan and is denied Is arrested for a crime committed by the thief when using the stolen identity And the criminal is long gone and on to his/her next victim 14

15 FRAUDS THAT WORK ON EXPLOITING HOPE THE NIGERIAN SCAM 15

16 NIGERIAN SCAM ALSO PREYS ON NEED TO FEEL NEEDED HOW IT WORKS 16

17 NIGERIAN SCAM OFTEN RELIES ON COMPUTERS LOTTERY SCAMS 17

18 EMOTIONAL ABUSE About 5 percent (or 1 in 20) of adults 60 years of age and older reported emotional mistreatment in the past year. Of those, only 8 percent reported to law enforcement. Perpetrators of emotional abuse towards older adults were most likely family members, such as partners/spouses (25 percent), children/grandchildren (19 percent), and other relatives (13 percent). Twenty-five percent of perpetrators of emotional abuse were acquaintances, and 9 percent were strangers. How can strangers who are perpetrators be involved in emotional abuse? 18

19 TELEMARKETING-A CRIMINAL S TOOL THE JAMAICAN LOTTERY IS COMPLEX AND MULTIFACETED A Jamaican Lottery Scheme is a form of mass-marketing fraud committed via the internet, telemarketing, and/or mass mailings. Jamaican criminal organizations contact victims and regularly identify themselves as lawyers, government officials, law enforcement agents, lottery company officials, and others. The potential victims are led to believe they won an international multi-million dollar lottery sweepstakes. The fraudulent telemarketers then tell the victims that in order to receive their winnings; the victim will have to pay an advance fee. This fee is usually described as a tax, insurance payment, or customs duty that must be paid to release the winnings. The victims are instructed to send the funds via mail or wire transfer. 19

20 NON EXISTENT WINNINGS The winnings are invariably nonexistent and the scammers make off with the funds that should have been received by the victims. CONCEALING AND/OR LAYERING THE PROCEEDS The scammers routinely involve victims to facilitate the laundering of financial transactions by : receiving and negotiating financial instruments; receiving and withdrawing funds from stored value or prepaid cards; and receiving and sending wire transfers. In an attempt to conceal and/or layer the proceeds from the lottery scams, the scammers direct victims to send funds, knowingly and unknowingly, to other victims and/or associates of the scammers within the United States. These victims and/or co-conspirators then transfer the proceeds of fraud to the scammers in Jamaica by wire transfer, sending monetary instruments, etc. 20

21 SOCIAL SECURITY RECIPIENTS ARE EASY TARGETS The Jamaican criminal organizations have modified the lottery scam into other variations of telemarketing schemes to include redirecting individuals Social Security Administration benefits, direct deposit, automatic debit, rerouting schemes and identity theft schemes. (876) AREA CODE the 876 area code is often misunderstood as a toll free number by elderly victims This area code allows the con artists to conceal their scam 21

22 CASH VALUE CARDS/ PREPAID DEBIT CARDS Social Security Administration offers prepaid debit cards for Social Security and Supplemental Security Income check recipients who wish to receive their benefits electronically. Social Security benefits are automatically deposited to the Direct Express card account and can be used to withdraw cash from Automated Teller Machines (ATMs), make purchases, pay bills online and purchase money orders from the U.S. Postal Service. CASH VALUE CARDS Social Security Administration also offers representative payees the option of receiving benefits on behalf of more than one person by adding them to their cash value card for each beneficiary. Recipients can also direct that their benefits be automatically deposited in other prepaid debit cards, such as Green Dot cards, or netspend cards; these type of card are also known as Cash Value Cards. 22

23 LEAD LISTS The Jamaican scammers have an expertise in finding vulnerable victims (the elderly, those with physical or mental disabilities, etc) and using their telemarketing skills to obtain identifying information from those individuals they call in the United States. Often, the scammers purchase lead lists containing identities of potential victims. Other times, they find vulnerable victims by other means. As part of the telemarketing scheme, the callers try to get victims to disclose their name, date of birth, social security number, etc, to the scammers before they even suspect that the caller is attempting to get this information from them. VICTIMS GIVE INFORMATION AWAY WITHOUT REALIZING IT UNTIL IT IS TOO LATE Some of these victims are then contacted by someone else in the scam and told that they have won the Jamaican Lottery- of course, there is no lottery and there are no winnings. Other victims are never contacted again, but the information they provided is used to fraudulently divert their SSA benefits. These victims may only become suspicious once they start to realize that they are no longer getting their SSA benefits. 23

24 THE MANNER USED TO MANIPULATE THE SOCIAL SECURITY AND CASH VALUE CARD PROGRAM IS EXTREMELY COMPLEX The scammers identify which victims are potential recipients of Social Security benefits based on age and, unbeknownst to the lawful recipient, enroll the victims online for Cash Value Card accounts. The scammers have the victims Social Security benefits directed to one or more of these Cash Value Card accounts. The scammers then direct the cash value cards containing victim s benefits to the addresses of co-conspirators or unknowing other victims. The scammers then select the personal identification numbers (PINs) assigned to the cards. The PIN is selected by the scammer and is then given to the person who is going to cash out the card at a bank or an ATM machine. ITS NOT JUST MONEY victims can be directed to buy jewelry, cell phones, computer tablets, other electronics and other items. Those items are then received by victims or other co-actors in the United States, and then sent to Jamaica, where they could not be traced or recouped. 24

25 WIRE TRANSFERS TO JAMAICA The scammers then call the victims, direct them to open the mail they receive containing the cash value cards, give them PIN number, and tell them to withdraw cash from the prepaid cards at ATMs. The co-conspirators or unknown victims are then directed to transfer the proceeds of the fraud to the scammers in Jamaica by wire transfer, or to make purchases and have the purchases sent to Jamaica, or are told of other ways to send the money or property to others in the US or in Jamaica. As the scam uses so many individuals, different names (both real and fictitious), financial instruments, and instructions that are given orally on the telephone, the scam is almost impossible to trace, and usually results in money being fraudulently taken, and diverted to Jamaica where it cannot be recouped. 25

26 HELPFUL HINTS FOR ELDERLY VICTIMS Demand details in writing via U.S. mail and save the envelope, which permits the U.S. Postal Inspection Service to help investigate any criminal acts. Assume that anyone who must have an answer immediately is trying to get you to act before you think. Insist on time to investigate the offer on your own. Keep track of everything you own that is a financial asset. Monitor credit accounts, bank statements, stock and pension fund statements, properties you own, and similar assets. Make sure you get all bills and expected checks on time. Criminals have been known to steal mail to steal your identity. Call the company if a bill or check is late. If it was mailed on time, call your post office and report postal theft. KNOW ABOUT YOUR CREDIT. Know about your credit. Get a copy of your credit report at least once a year to make sure that information is accurate and complete. Every person is entitled to a free copy of his or her credit report from each major credit bureau each year. Consider ordering reports on a staggered basis throughout the year. 26

27 AND DON T BE AFRAID TO ASK FOR HELP! 27