Elder Fraud

Risks in a Post Pandemic Environment

The pandemic placed many individuals into an environment where they had to rely on technology to conduct daily life and the financial transactions associated with it. This was a major change; especially for a generation that was accustomed to handling their banking and financial transactions face to face. Forcing a generation to begin to conduct banking and purchasing online while utilizing sensitive information has increased the risk of fraud as it relates to “elder” individuals. This article discusses some of the trends emerging leading to elder abuse.

The pandemic placed many individuals into an environment where they had to rely on technology to conduct daily life and the financial transactions associated with it. This was a major change; especially for a generation that was accustomed to handling their banking and financial transactions face to face. Forcing a generation to begin to conduct banking and purchasing online while utilizing sensitive information has increased the risk of fraud as it relates to “elder” individuals.  

COVID-19 resulted in seniors needing to increase their technology use either by computer or via phones to pay bills, speaking with medical professionals, or ordering groceries. Seniors are also using technology to connect to individuals via social media. The more seniors increase their technology use, the more opportunity scammers have to initiate a fraud scheme. Seniors must always be mindful of the potential for fraud schemes and never provide their personal information to anyone with whom they did not initiate contact.

Fraudsters prefer to use seniors in their fraud schemes because seniors tend to be trusting, polite, have savings, good credit, and are less inclined to report the fraud. Fraudsters use several different methods in their fraud schemes including posing as a romantic partner, technology support representative, governmental entity, relative, charitable organization, or home improvement servicer. Scammers will use seniors lack of technological knowledge to carry out various fraud schemes. Examples include, but are not limited to:

1. Attempting to sell fraudulent products or claiming to never receive payment for products that were purchased,
2. Alerting the potential victim that they won the lottery or a sweepstakes event,
3. Posing as a tech support representative or a romantic partner gaining the trust of the senior,
4. Extortion, or
5. Posing as a local or federal government representative.

To prevent these frauds from occurring, seniors need to always be mindful of the potential for the fraud occurring. The FBI’s Internet Crime Complaint Center released their 2020 Elder Fraud Report which showed that the number of fraud reports for persons over 60 rose from approximately 65,000 in 2019 to over 105,000 cases in 2020, a 61.5% increase. These reports racked up total losses of over $966 million.

Knowledge is power and professionals need to advise their clients on different types of frauds that can occur as well as how to combat those frauds. Remind your clients of the following:

1. Ask for written documents to confirm the authority of an individual representing they are a government employee.
2. If someone is attempting to gain information, ask for their information and a call back number.
3. If individuals are posing as a bank representative or another type of personnel asking for personally identifiable information or financial information, ask them to send a certified letter with the documentation regarding the issue attached for review.

The most important thing is to ensure that elders and those that care for elders are cognizant of such schemes and they enhance their own internal control structures. Trust is asked for, but they should not be willing to just give it.

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Joshua Shilts, CPA, ABV, CFF, CGMA, CFE, is president of Shilts CPA, PLLC. Mr. Shilts’ practice is focused on assisting attorneys, individuals and businesses with complex financial matters and disputes. He has held roles with international consulting and public accounting firms in Miami and New York City as well as positions with large public organizations. Mr. Shilts is a frequent lecturer on a variety of forensic accounting matters. He has been involved with hundreds of forensic investigations dealing with a variety of matters involving personal and business disputes as well as the identification and mitigation of fraudulent activities. Clients have sought Mr. Shilts’ advice and services because of his unique industry experience and knowledge.

Mr. Shilts has provided expert testimony in commercial and family matters surrounding business valuation, economic damages, fraud and other applicable disciplines surrounding economic and accounting issues. He has been qualified as an expert and testified in State and Federal courts.

Mr. Shilts can be contacted at (844) 850-6166 or by e-mail to Josh@Shiltscap.com.

Jeff Robison was born and raised in Jacksonville, Florida. He attended Bishop Kenny High School, graduating in 2004, and then earned his Bachelor of Business Administration in Accounting from the University of North Florida in April 2019. Mr. Robison is a Certified Public Accountant candidate, studying for the CPA exam, and will be attending classes towards his Master of Accounting. He worked for the past 11 years as a criminal defense paralegal, and has extensive knowledge in tax fraud, embezzlement, as well as other white-collar crime cases. Mr. Robison married his wife in 2014, and they have two children. He enjoys spending time with his family, all outdoor sports, and Cross Fitting.

Mr. Robison can be contacted at (844) 850-6166 x112 or by e-mail to Jeffrey@Shiltscap.com.