The prevalence of scams is on the rise.
Sophisticated criminals from overseas are siphoning off billions of dollars from Americans annually, a trend expected to worsen with the aging population and advancements in technology like AI, which make it easier for fraudsters to commit crimes and evade capture.
Internet and phone scams have seen a significant increase, overwhelming law enforcement and legal authorities who are only able to apprehend and convict a small fraction of the culprits, according to Kathy Stokes, the director of fraud prevention at AARP’s Fraud Watch Network.
Victims, particularly older individuals who fall prey to romance scams, grandparent scams, technical support fraud, and other common scams, rarely recover their lost funds, which often include life savings.
“We are facing a crisis in fraud in our society,” Stokes stated. “Many individuals have turned to criminal activities because it’s relatively easy. They don’t have to abide by any rules, can make a substantial amount of money, and there’s a slim chance of being caught.”
A recent incident in Ohio, where an 81-year-old man mistook an Uber driver as part of a scam plot and fatally shot her, highlights the challenges faced by law enforcement.
William Brock, the homeowner involved, was charged with murder in the death of Lo-Letha Hall, but the scammer who initiated the threat and set off the tragic events remains at large.
Brock pleaded not guilty, claiming he feared for his life.
Advantage scammers
With the exponential growth of online and telephone scams, law enforcement and protective services struggle to keep pace.
“It’s like trying to drink from a fire hose,” said Brady Finta, a former FBI agent who oversaw elder fraud investigations. “The volume is so high that it’s nearly impossible to effectively address the issue at the moment.”
Investigating such scams, especially those originating from overseas, can be challenging, with stolen funds quickly converted into untraceable cryptocurrency or transferred to foreign accounts.
Some police departments do not prioritize financial scams as they do other crimes, leaving victims feeling disheartened and demoralized, as noted by Paul Greenwood, a former prosecutor specializing in elder financial abuse cases in San Diego.
“There’s a misconception among law enforcement that if a victim willingly sends money through gift cards, wire transfers, or crypto purchases, it’s a consensual transaction,” Greenwood explained. “That is a significant mistake because it’s not. They’ve been defrauded.”
Federal prosecutors typically only intervene in fraud cases that reach a certain monetary threshold, according to Greenwood.
The FTC reports that the majority of fraud cases go unreported, often due to victims’ reluctance to come forward.
A 74-year-old woman, accused of robbing a credit union in Ohio, was believed to be a victim of an online scam by her family. Despite this, there is no formal police report on record.
“These scammers are adept at deceiving people and extorting money from them,” said Sergeant Brandon McCroskey of the Fairview Township Police Department. “I’ve seen individuals almost resort to physical altercations with police and bank tellers because they firmly believe they need to access the money.”
A devastating scheme
Older individuals, collectively holding more wealth, are prime targets for scammers. The repercussions can be severe, especially for victims who are retired and have limited opportunities to recover their losses.
Reports of elder fraud to the FBI’s Internet Crime Complaint Center increased by 14% last year, with losses totaling $3.4 billion, according to a recent FBI report.
Additional estimates suggest even higher annual losses.
A study by AARP in 2023 estimated that Americans over 60 lose $28.3 billion annually to fraud. The FTC, factoring in unreported losses, estimated that scammers stole $137 billion in 2022, including $48 billion from older adults.
William Bortz, an 80-year-old from San Diego, fell victim to a complex scam that drained his family’s savings of nearly $700,000. The scam involved a fictitious Amazon order, a fake “refund processing center” in Hong Kong, altered bank statements, and instructions for Bortz to “synchronize bank accounts” to retrieve his money.
Despite being a victim, Bortz struggles with self-blame.
“I now understand why so many cases of elder abuse fraud go unreported. Looking back, you question, ‘How could I have been so naive?'” said Bortz, who had a career in banking, financial services, and real estate.
His daughter, Ave Williams, revealed that local police and the FBI made efforts to trace the overseas scammer and recover the funds, but faced numerous obstacles. The family holds the bank accountable for disregarding warning signs and facilitating large wire transfers by Bortz over eight days. The bank denied any wrongdoing, and the family’s lawsuit against them was dismissed.
“The scammers are becoming more sophisticated,” Williams noted. “Law enforcement needs the necessary resources, and banks must enhance their defenses as they are the frontline of defense.”
The Justice Department emphasizes the need for the industry to take more action, stating that prosecution alone cannot solve the problem.
“Private sectors, such as tech, retail, banking, fintech, and telecommunications, must implement measures to deter fraudsters and prevent the laundering of stolen funds,” the agency stated in response to The Associated Press.
A way forward
Banking industry representatives informed a Senate subcommittee in May about their substantial investments in new technologies to combat fraud, with promising results. The American Bankers Association is developing a program to enhance communication among banks in real-time to identify suspicious activities and reduce the flow of stolen funds.
However, they emphasize that banks cannot combat fraud alone. They advocate for a cohesive national strategy to combat scammers, labeling the current federal efforts as disjointed and uncoordinated.
Former FBI agent Brady Finta, who founded the National Elder Fraud Coordination Center, urges collaboration between law enforcement agencies and major corporations like Walmart, Amazon, and Google to combat fraud more effectively and efficiently.
“There are brilliant minds and influential companies committed to stopping this,” Finta said. “We have the potential to make a significant impact and support our law enforcement partners in tackling this onslaught of fraud.”
