Older Americans are increasingly being caught up in elaborate scams designed by perpetrators to drain them of their retirement savings, with the detail and scale of such scams sometimes requiring the intervention of federal law enforcement. This is according to an investigative report published this week by the The New York Times.
Subjects of interviews were “ensnared in scams that could be so elaborate it’s as if they were created in a writer’s room testing different plot devices,” the report stated. “Scammers can impersonate government officials, tech support staff or love interests. They coach victims on how to sidestep fraud prevention measures at financial institutions, and they use manipulative psychological tactics — isolation, a sense of urgency or preying on people’s willingness to trust or connect — to keep the scam going.”
Retired lawyer Barry Heitin, 76, is one of the subjects profiled in the story. He detailed how he lost an estimated $740,000 in retirement savings due to the persistent efforts of these bad actors.
Heitin lost this money over a period of only three months, spending “just about every weekday doing the legwork and making withdrawals from his bank accounts as part of an intricate scam,” the report explained. “He believed he was helping the feds safeguard his money and catch thieves who were after it.”
Such scammers are present in a variety of online areas, including dating websites, social media platforms, messaging apps and through the use of invasive, malicious software — just to name a few.
“The nature of these schemes makes it nearly impossible to recover the money, leaving victims with little recourse,” the report explained. “The stolen funds are often whisked to overseas accounts or laundered through cryptocurrency wallets, which are quickly emptied.”
The losses are sometimes exacerbated by taxes. Withdrawals from retirement accounts — especially in such large amounts — can often come with a heavy tax bill that the victims have few resources to cover after being scammed.
“Potential losses from cybercrime exceeded $12.5 billion in 2023, a 22 percent jump from 2022, and more than triple the levels in 2019, according to the FBI’s Internet Crime Complaint Center,” the report said. “But these figures underestimate the problem, since many victims don’t report their losses.”
On top of these challenges, bad actors often single out victims over the age of 60 due to perceptions of large savings. This age group suffered the largest losses in 2023, totaling more than $3.4 billion, according to the FBI data cited in the report.
Federal agencies, including the Consumer Financial Protection Bureau (CFPB), have also made an effort to sound the alarm over heightened instances of elder financial exploitation.