Elder Financial Exploitation and Scams
By Simon Peter Lokomo, MPH — Public Health
The short answer
Two different things get called elder financial exploitation, and they behave differently. Fraud and scams by strangers affect roughly 5% of older adults in a given year. Financial abuse by someone the person knows and trusts, usually a family member and most often an adult child, affects roughly 3% in a year. Both are underreported and both are poorly measured. The most useful finding in this literature is not a scary number at all: a new, out-of-character change in someone’s financial judgment can be an early signal of cognitive change, sometimes showing up before memory problems are detectable by testing.
If you are reading this because something has already happened, a payment you cannot explain, a new friend who has become very involved in your mother’s finances, a call that started with “your Social Security number has been suspended,” the useful thing to know upfront is that the shame most families feel here is not proportionate to the facts. Being targeted is close to universal. Losing money is not a character flaw, and it is not, by itself, evidence that anyone has lost their judgment.
Two different problems that get merged into one number
Almost every article on this subject picks one alarming statistic and runs with it. The research actually splits into two distinct categories with different perpetrators, different warning signs, and different remedies, and merging them is what produces the confusing spread of numbers you see quoted.
Fraud and scams are committed by strangers: tech support pop-ups, government impersonators, prize and sweepstakes offers, romance scams, investment schemes. A meta-analysis pooling 12 population-based studies covering 41,711 people put one-year prevalence at 5.4% of older adults, with a wider confidence interval of 3.2% to 7.6%. That works out to roughly one in 18 cognitively intact, community-dwelling older adults per year.
Financial abuse is committed by someone in a position of trust. A study of 4,156 older adults in New York State found one-year prevalence of 2.7% and lifetime prevalence since turning 60 of 4.7%, roughly one in 20. In that study the most common form was straightforward theft of money or property, and more than half the time the perpetrator was a family member, most often an adult child.
Both figures come from studies that generally excluded people with cognitive impairment, for the practical reason that the studies relied on people accurately reporting their own experiences. Since cognitive impairment is itself a major risk factor, both numbers are very likely underestimates.
There is one more asymmetry worth holding onto, because it reverses what the prevalence figures suggest. Abuse by a trusted person is less common than stranger fraud, but it costs far more when it happens. Federal analysis of suspicious activity reports filed by banks found average losses of roughly $50,000 when the older adult knew the suspect, against roughly $17,000 when the suspect was a stranger. The heaviest losses fell on people aged 70 to 79, averaging around $45,300. A stranger gets one shot at someone. A person with access gets months: the suspicious activity in a typical filing had been running for about four months before anyone flagged it.
How the question is asked also moves the numbers more than you might expect. In the meta-analysis, studies that walked people through a series of specific scenarios found a prevalence of 7.1%, while studies that asked one general question about being defrauded found 3.6%. Nearly double, from question wording alone. People do not readily label what happened to them as fraud, which is worth remembering when a parent says nothing is wrong.
The finding that contradicts almost everything else you have read
Here is the part that surprised me. The Federal Trade Commission, whose data is the source for most of the alarming coverage of this topic, reports year after year that older adults are less likely than younger adults to report losing money to fraud. Not more. The FTC’s own interpretation is that older adults may be better at avoiding losses once exposed to fraud, or more inclined to file a report even when they lost nothing, or both.
What is true is that when older adults do lose money, they lose more of it. Median reported losses run higher than for younger adults, and the gap is widest for people 80 and over, whose median reported loss exceeded $1,600. Total reported losses for adults 60 and over rose roughly fourfold between 2020 and 2024, from about $600 million to $2.4 billion, and that increase was driven mainly by a growing number of very large individual losses over $100,000.
So the accurate picture is not that older people fall for scams more easily. It is that when a scam succeeds against an older person, there is often more money available to take, and the consequences of losing it are worse because there is less working life left to recover.
What the evidence shows
Roughly 5% of older adults experience fraud or a scam by a stranger in a given year, and roughly 3% experience financial exploitation by someone they trust. Family members, most often adult children, are the most common perpetrators in the second category. Older adults report losing money to fraud at a lower rate than younger adults, but lose substantially more when they do. Reported losses over $100,000 are the fastest-growing part of the problem.
Separately, and importantly: low scam awareness is associated with roughly double the risk of developing Alzheimer’s dementia or mild cognitive impairment over the following six years, and with Alzheimer’s pathology found in the brain after death.
Why changes in financial judgment matter medically
This is the finding I would most want a family to know, and it is not in most consumer coverage of this topic.
Researchers at the Rush Memory and Aging Project followed 935 older adults who were free of dementia at the start, measuring their awareness of common scam tactics with a questionnaire. Over an average of six years, 151 developed Alzheimer’s dementia and 255 developed mild cognitive impairment. People with low scam awareness at the outset were about twice as likely to develop either condition. In the subset of participants who later died and whose brains were examined, low scam awareness was also associated with Alzheimer’s disease pathology.
The researchers’ reading is that changes in social judgment can appear before changes in memory and thinking are picked up by standard cognitive testing. A related study of the same population found that a faster decline in financial and health literacy was associated with substantially higher risk of developing Alzheimer’s dementia.
What this does not mean, and it matters: falling for a scam does not mean someone has dementia. Most people who get scammed do not have dementia, and highly capable people of every age get taken by well-constructed frauds. The signal worth paying attention to is change. A parent who was always careful with money and has become uncharacteristically trusting, or who is making financial decisions that would have struck their younger self as obviously unwise, is showing something worth mentioning to their doctor. Not because it proves anything, but because it is the kind of early change that standard testing can miss.
| Fraud and scams | Financial abuse | |
|---|---|---|
| Who does it | Strangers | Someone in a position of trust: family (about 58%, most often adult children), friends and neighbors (17%), home care aides (15%) |
| One-year prevalence | About 5.4% | About 2.7% |
| Typical form | Tech support, government impersonation, prize and sweepstakes, romance, investment schemes | Theft of money or property, misuse of a power of attorney, pressure to sign documents, unpaid household expenses |
| Usual first contact | Phone call, online ad or pop-up, email, social media | Existing relationship, often escalating gradually |
| Where to report | FTC, FBI IC3, state attorney general, the bank | Adult Protective Services, the bank, sometimes police |
| Hardest part | Money often moves irreversibly (crypto, wire, cash) | Reporting means accusing a family member |
How the big-loss scams actually work
The FTC’s analysis of scams where older adults lost $10,000 or more is unusually specific about mechanism, and it is more useful than a list of scam names, because the names change constantly and the mechanism does not.
Among older adults reporting losses of $10,000 or more to a business or government imposter scam in 2024, 41% said the contact started with a phone call, 15% with an online ad or pop-up, and 13% with an email. Payment was most often cryptocurrency (33%), followed by bank transfer (20%) and cash (16%). Reports of this kind rose from 1,790 in 2020 to 8,269 in 2024.
The FTC’s own description of the mechanism is worth repeating: even when a scam starts online, the goal is to get the person on the phone and keep them there. A live call is what generates fear and urgency, and staying on the call is what prevents the person from talking to anyone calmer who might see through it. The scam is not primarily an attack on someone’s intelligence. It is an attack on their ability to pause.
That is why the single most evidence-aligned piece of advice in this whole area is unglamorous: hang up and call someone you know. Not because older adults need supervision, but because isolation during the call is the specific thing the scam requires to work.
Where the evidence runs out
Nobody knows the true scale of this. The FTC’s own December 2025 report estimated the total cost of fraud to older adults in 2024 at somewhere between $10.1 billion and $81.5 billion depending on the methodology used. An eight-fold spread inside a single official estimate is the most honest available statement about how poorly this is measured. Most cases are never reported, and estimates of how many go unreported vary so widely across studies that I have not quoted a ratio.
Evidence on what actually prevents victimization is thinner still. One randomized survey experiment found brief online education did meaningfully reduce susceptibility to investment fraud. A separate experimental study found that common “how to spot a scam” tips did not improve people’s ability to tell scams from genuine messages at all. Fraud education is plausible and low-risk, but it is not a solved problem.
What the evidence does not support
That elder financial abuse costs $2.9 billion a year. This is the most-quoted figure in the field. It came from a 2011 study that scanned a media database, found 389 news articles, extracted dollar amounts from 314 of them, and extrapolated. It is a measurement of how much money appeared in three months of news coverage, not a population-based estimate of anything.
That it costs $36.5 billion a year. The competing figure has the same problem in the other direction: an online poll that narrowed 2,096 respondents down to 467 who said they helped care for an older adult, then scaled up nationally. The company that produced it also sells products to protect older adults from financial exploitation.
That one in five older adults has been a fraud victim. Widely repeated, roughly four times higher than the peer-reviewed meta-analytic estimate, and not drawn from a comparable population-based probability sample.
That 90% of perpetrators are family members. This circulates without a traceable source and it is not right as a general claim. It is roughly true for financial abuse, where family members account for about 58% and other known people for most of the rest. It is wrong for fraud and scams, which are committed by strangers by definition. Which number applies depends entirely on which problem you are talking about.
That $27 billion was stolen from older adults in a single year. This figure has largely replaced the older ones in recent coverage, and it is being reported as something it is not. It comes from federal analysis of 155,415 bank filings over one year, and it is a total of reported suspicious activity, not of money lost. The agency that published it says directly that the figure may be overstated because it can include attempted and unpaid transactions, duplicates, transfers between the person’s own accounts, both sides of the same transfer, and filer errors. It is a useful measure of how much activity banks are flagging. It is not a theft total.
That older adults are more likely than younger adults to lose money to fraud. The FTC’s data says the opposite, consistently, year after year. They lose more when it happens, which is a different and more accurate claim.
One protection worth setting up before anything happens
Brokerage firms are required to make reasonable efforts to collect a “trusted contact person” for customer accounts. It is worth understanding exactly what this does, because the name oversells it. A trusted contact has no authority over the account, cannot make trades, and does not become a power of attorney by virtue of being named. What it does is give the firm a person to call if they see something that worries them or cannot reach the account holder. Separately, brokerage firms are permitted, though never required, to place a temporary hold on a disbursement when they reasonably suspect exploitation.
Two caveats matter here. First, this comes from securities industry rules, so it binds brokerages rather than banks and credit unions. Many banks have adopted similar practices voluntarily, and federal law gives trained bank staff liability protection for reporting suspected exploitation in good faith, but you should ask your parent’s specific bank what it offers rather than assume. Second, permission is not obligation: a firm that suspects exploitation may act, and may also decide not to.
The reason to do this early is the same one that applies to a power of attorney and advance directive generally: these arrangements are straightforward to put in place while someone is clearly capable and nobody is under pressure, and considerably harder afterward.
When to get help
If money is actively moving, call the bank first, not the police. Banks can sometimes stop or recall a transfer if they hear about it fast enough, and speed matters more than getting the report perfect. Cryptocurrency and cash are effectively unrecoverable, so a scam that has reached that stage is a race.
If you suspect someone in a position of trust, Adult Protective Services is the route, reachable through your state’s APS office. Be aware that APS is state-administered and what it will investigate varies considerably. A local Area Agency on Aging can help you work out what applies where your parent lives.
If you have noticed a change in financial judgment rather than a specific incident, mention it to their doctor. Frame it as a change in behavior, with examples, rather than as a suspicion of dementia. This is exactly the kind of observation that standard cognitive screening can miss and that a clinician will want to hear about.
If a family member is the problem, this is genuinely harder than the stranger case, and the honest answer is that families often need outside help to navigate it. An elder law attorney can advise on whether a power of attorney is being misused and what can be done about it. Reporting a relative is a real decision with real costs, and it is reasonable to want advice before making it.
Key takeaways
- Fraud by strangers (about 5.4% of older adults per year) and financial abuse by trusted people (about 2.7%) are different problems with different perpetrators, warning signs, and remedies. Most coverage merges them.
- Family members, most often adult children, are the most common perpetrators of financial abuse specifically.
- Abuse by a trusted person is less common than stranger fraud but roughly three times costlier per case, averaging about $50,000 against $17,000, largely because someone with access can take money over months rather than minutes.
- A trusted contact on a brokerage account is a real and useful protection, and more limited than it sounds: no authority over the account, no trading, not a power of attorney. It binds brokerages, not banks.
- Older adults report losing money to fraud at a lower rate than younger adults. They lose more when it happens, particularly people over 80.
- A new, out-of-character change in financial judgment is worth mentioning to a doctor. Low scam awareness roughly doubled the risk of developing Alzheimer’s dementia or MCI over six years in one large cohort study.
- Getting scammed does not mean someone has dementia. The signal is change from their own baseline, not the fact of victimization.
- Big-loss scams depend on getting someone on the phone and keeping them isolated there. Hanging up and calling someone you know defeats the mechanism.
- The widely quoted dollar totals ($2.9 billion, $36.5 billion) both come from weak methodologies. The FTC’s own honest range for 2024 spans $10.1 billion to $81.5 billion.
Frequently asked questions
My father lost money to a scam. Does this mean he has dementia?
Not on its own. Most people who are scammed do not have dementia, and sophisticated frauds catch capable people of every age. What is worth attention is whether this represents a change from how he normally handles money. If a careful person has become uncharacteristically trusting or is making decisions his younger self would have questioned, that is worth mentioning to his doctor as a behavior change.
Should I take over my mother’s finances?
That is a bigger step than it sounds and it removes autonomy that may not need removing. Less drastic options exist: becoming a read-only authorized viewer on accounts so you can spot unusual activity without controlling anything, setting up transaction alerts, or agreeing together on a “check with me before any transfer over X” rule. An older adult has the right to make financial decisions others disagree with, and the goal is catching exploitation, not preventing all spending you would not do yourself.
Can we get the money back?
Sometimes, and speed is the main variable. Bank transfers can occasionally be recalled if reported quickly. Cryptocurrency and cash are effectively gone. Credit card payments have the strongest protections. Call the financial institution before doing anything else, including before filing reports.
How do I bring this up without insulting my parent?
It usually lands better as information than as concern about them specifically. The fact that older adults are targeted constantly but actually lose money less often than younger adults is true, and it reframes the conversation as “these people are relentless” rather than “I am worried about your judgment.” Agreeing on a mutual rule, where you both call each other before any large or unexpected transfer, avoids making it one-directional.
What if I think a sibling is taking my parent’s money?
This is the most common version of the problem and the hardest to act on. Document what you can observe, specific transactions, dates, changes to accounts or documents, before raising it. An elder law attorney can advise on whether a power of attorney is being misused, and Adult Protective Services investigates exploitation by family members. Neither step commits you to a criminal complaint.
Does a power of attorney protect against this?
Partly, and it cuts both ways. A properly set up power of attorney means someone trustworthy can act if your parent cannot, which prevents some kinds of exploitation. It is also a common instrument of exploitation when the person holding it is the problem. Naming a second person, requiring joint sign-off on large transactions, or building in periodic accounting to another family member all reduce that risk.
Is there any point reporting it if the money is gone?
The honest answer is that reporting rarely recovers money and rarely results in a prosecution, particularly for stranger fraud where the perpetrator is often overseas. It does contribute to the data that agencies use to identify patterns and target enforcement, and in family exploitation cases a report can matter later if guardianship or legal action becomes necessary. Whether that justifies the effort is a reasonable thing to weigh rather than an obvious yes.
This article is for general information and is not legal, financial, or medical advice. Laws on financial exploitation, reporting duties, and what Adult Protective Services will investigate vary considerably by state. For a specific situation, talk with an elder law attorney, and discuss any concerns about cognition or judgment with your parent’s doctor.
