Older adults lost $1 billion to scams in 2021, with impersonation and investment scams costing them more money last year compared with 2020, according to a new report from the US Federal Trade Commission.
In its annual report to Congress, the FTC highlighted fraud trends targeting older adults, as well as its efforts to combat the problem through law enforcement actions, rulemaking and education programs.
According to the report, “Protecting Older Consumers, 2021-2022,” business impersonations cost older adults the most, at $151 million in 2021, up 134% from 2020. Investment scams were the next costliest, at $147 million, a 213% gain from 2020. And government impersonation scams cost older adults $122 million last year, up 108% from the year before.
In an analysis of data from federal, state and local law enforcement agencies on consumer fraud through the Consumer Sentinel Network, the FTC found that older adults filed 467,340 fraud reports with reported losses of more than $1 billion in 2021.
The Sentinel data also showed that romance, business impersonation and investment scams caused the highest losses for older adults as a whole, but prize, sweepstakes and lottery scams remained the costliest for people aged 80 or more years. This age group reported overall median individual losses of $6,000 in 2021 to prize, sweepstakes and lottery scams.
Losses to romance scams increased from $139 million in 2020 to $213 million in 2021. Older adults aged 60 to 79 were the hardest hit group in this fraud category, reporting $198 million in losses in 2021.
Online fraud gaining traction
Online fraud was most reported by older adults among all categories, with losses tied to social media scams more than doubling to $164 million between 2020 and 2021. But the biggest average financial losses for older adults from fraud began with a phone call, according to the FTC report.
Online fraud reports surpassed phone fraud for the first time in 2020 — a trend that accelerated in 2021 — increasing by more than 60% last year. But 2021 reported median individual losses remained higher for phone fraud at $1,500 compared with $300 for online fraud. The news was worse for those aged 80 or more years who lost a collective $70 million on phone fraud, compared with $26 million on online fraud.
Although older adults were less likely than younger people to report losing money to online shopping fraud, reports of losses in this category increased sharply starting in the second quarter of 2020, and it remained higher than pre-pandemic levels in 2021.
Cryptocurrency fraud rising
Gift cards or reloadable cards were the most common payment method used by older adults reporting being scammed, followed by credit cards and debit cards.
Scams using bank transfers and payments more than doubled last year, with the largest share going to romance scams, investment related fraud and business impersonation scams.
The FTC noted that “most striking” was the more than fivefold increase in reported losses using cryptocurrency as the payment method. The largest share of reported cryptocurrency losses by older adults were on investment and romance scams.
Older adults are less likely to report being scammed but tend to lose more money than younger adults, according to the FTC. Adults aged 80 or more years reported losing a median of $1,500 each to scams, whereas those in their 70s reported a median loss of $800 each.
The report also includes information about other age groups and the FTC’s efforts to protect older consumers through law enforcement actions, as well as outreach and education programs by the AARP, the federal Consumer Financial Protection Bureau and other groups.