4 Elder Fraud Scams to Watch Out For

The timing was ironic, to say the least. Right as Gay Dempsey was scheduled to talk on the phone with Independent Banker about elder fraud, she had to stop a senior customer, who had come into a branch to withdraw a large amount of money, from being scammed. 

It turned out the customer had the scammer listening on speaker from the phone in their pocket. 

“[The scammer was] listening to everything they said,” recalls Dempsey, CEO of $232 million-asset Bank of Lincoln County in Fayetteville, Tennessee. 

Scams targeting seniors are on the rise. According to the Federal Trade Commission, the number of older adults who reported they lost $10,000 or more to these scams jumped from 1,790 in 2020 to 8,269 in 2024. 

The FTC also found that during the same period, the number of older adults who reported they lost over $100,000 increased nearly sevenfold. 

And that’s only those who report these crimes. Many don’t tell anyone, because they feel embarrassed or ashamed to have been fooled.

The Rising Threat of Elder Financial Exploitation

Compounding the problem is that this kind of fraud isn’t always done by small-time operators. It’s the work of multinational criminal organizations that often use AI and trafficked workers to flood the zone with fakes and frauds. 

“They can cast a really wide net and have the resources to keep pushing,” says Scott Anchin, senior vice president of strategic initiatives and policy at ICBA. “It’s a huge problem.”

With AI now making scams easier to conduct and more believable, fraudsters are targeting everyone, but seniors make attractive targets. 

“[They’ve] got a nest egg versus somebody who just started a job,” says Jilenne Gunther, national director of AARP’s BankSafe initiative.

Senior-targeted scams work because they rely on two things, says Peter Stenehjem, CEO at $6.16 billion-asset First International Bank and Trust in Watford City, North Dakota: They manipulate emotions and force action.

Creating that sense of urgency doesn’t give seniors time to think, “because they think they have to get somebody out of jail or somebody’s going to lose their house,” Stenehjem says. “They get people to act quickly and urgently, and that’s how mistakes get made.” 

Given the close relationships community banks tend to have with their customers, they are well positioned to intervene. Here’s what banks need to know about how to protect their customers—and themselves.

Recognizing the Most Common Elder Fraud Types

Here are the most common types of fraud being pushed at seniors right now:

Romance scams targeting older adults

Romance scammers prey on people they think might be lonely. Fraudsters create a fake online identity, often on a dating app, to get close to a victim and gain their trust. According to the FTC, these fraudsters make up excuses as to why they can’t meet in person, such as they’re traveling abroad, working on an oil rig or in the military, and ask for money for things like medical expenses, plane tickets or visas. 

The FDIC warns that these attacks are also sometimes also “pig butchering” scams, where fraudsters build a connection over months and then present victims with fake investment opportunities. They encourage victims to open accounts on online investment websites and instruct them to transfer money via wire transfer or send cryptocurrency.

Grandparent scams 

A fraudster will pose as someone’s grandchild or other loved one, saying they are in the hospital or legal trouble and need immediate funds—while emphasizing not to call anyone else. While this is a long-running scam, the FTC has found that these scams have gotten more sophisticated as fraudsters use AI to scrape the internet for personal details about the target or even clone a grandchild’s voice from audio they pick up from their social media videos.

Impersonation fraud

Scammers will text, email or call pretending to be a trusted institution, like a bank or credit card company or government agency. The FBI warns that they convince a mark to download malicious software, send money or disclose personal, financial or other sensitive information that they can then exploit for financial gain. 

Fake tech support pop-up scams

These scams start with an alert—often a fake pop-up ad but sometimes a text message or call—that something is wrong with a person’s computer. They ask for remote access to the person’s computer and then demand payment in the form of gift cards, a wire transfer, a bank transfer, cryptocurrency or a payment app.

Community Bank Fraud Prevention Strategies

Community banks can take a multi-pronged approach to detecting and preventing fraud with their senior customers. Technology solutions can recognize patterns that are normal and those that are not. 

“In elder fraud specifically, you’re going to see larger transactions, or maybe unusual transactions, or suddenly pulling out of an account that maybe they don’t usually pull out of,” says Brynn Johnson, vice president of marketing at Advanced Fraud Solutions. 

Jody Allee, a fraud and compliance officer at $539 million-asset Friendship State Bank in Friendship, Indiana, says her community bank now flags transactions over a specific amount at stores like Dollar General and Walgreens. Large transactions there could indicate that a fraudster is demanding that their victim buys them gift cards. 

And while technological solutions do help, the best fraud stoppers are real people. According to a study conducted by AARP and Virginia Tech, about half of scams are stopped when a bank employee steps in—the highest success rate of any intervention they studied. 

Circling back to the customer at the Bank of Lincoln County, employees noticed the person was nervous and made a completely unusual request when they stopped in. Dempsey wrote a note on a pad of paper, asking the customer if someone was listening on the phone. Eventually, the customer pointed to their pocket to indicate yes. 

The Friendship State Bank has trained bank employees on “what they need to do if they feel like someone is being scammed or financially exploited,” says Allee. “They can present it to their supervisor, who will then review the account and then see if it needs to be escalated further.”

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