Ron Strobel can still remember the panic in his client's voice. Six years ago, an elderly investor called Strobel's brokerage to say he'd just been scammed.
"He was distraught," recalled Strobel, a financial planner who today runs the firm
As the client, a Seattle retiree in his 70s, explained to Strobel over the phone, someone who claimed to work for Microsoft had just called him. The caller told him there was a virus on his computer and in order to remove it, they needed to remotely log into the machine. For some reason, "Microsoft" also asked the retiree to sign in to all his financial accounts.
"He eventually started to notice that something was wrong and told them to stop, but they kept stealing files from his computer as he watched the cursor bounce all over his desktop," Strobel said. "The only thing he could think of was to unplug his router, which turned the internet off."
Strobel and his co-workers sprang into action, helping the client contact his banks, change his account numbers and passwords, and get his credit report frozen. Luckily, they made it in time and no money was stolen. But the ordeal wasn't over.
"The craziest part was that a few hours after this incident, we received the exact same scam call at our office, presumably from the same scammer," Strobel said. "It was very bizarre to go through the process of helping the client and then hours later be talking to the scammer himself."
Unfortunately, Strobel's former client is far from alone. Scams are a rapidly growing problem in the United States, and they hit retirees hardest of all. According to new data from the
"It's a crisis," said Kathy Stokes, director of fraud prevention programs at the retiree advocacy group
By far, the most lucrative targets are retirees. While the median loss for all age groups last year was $650, for victims aged 80 and older it was $1,674. Stokes said this is not because seniors are more gullible or senile than younger Americans — a commonly exaggerated stereotype — but because they generally have more savings.
"The reality is older people — not always, but ostensibly — have more wealth than younger people," Stokes said. "So when you're a younger person, a tech support scam … might cost you $200 — which is hard when you're in your 20s, but it's recoverable. It's not recoverable when you're 80 and you've lost your money."
In particular, last year saw a huge jump in business-related frauds. Victims reported losing $3.8 billion to investment scams, more than twice the losses for that category in 2021. The second-biggest losses were to imposter scams, which claimed $2.6 billion — but even within that category, the fastest-growing subset was business imposters. These fraudsters, who pretend to be affiliated with famous corporations, took in $660 million in 2022, up from just $196 million in 2020.
"Investment scams are on a troubling upswing," the FTC said in a
How to help
But retirees are not helpless against these crimes, and neither are their financial advisors. There are a number of things wealth managers can do to stop their clients from being swindled or to help them recover their money afterward.
For one thing, advisors can ask for a "trusted contact" — someone who can answer questions if the client can't be reached. The Financial Industry Regulatory Authority
"If the advisor can't reach the client, or the advisor is concerned that money is leaving the client's account and he's having a hard time getting the client to explain why, that trusted contact can be called and maybe try to intervene in the whole thing," Stokes said.
Second, advisors can educate investors on how to spot and avoid scams. AARP offers
Most of all, Stokes said, scam victims need to know that they should call the police. This may not accomplish anything right away, but if, years later, an opportunity comes up for restitution, it's vital to have a police report as a record of what happened. And in any case, Stokes said, scams should be treated as the crimes that they are.
"Education is critically important, but we cannot educate our way out of the crisis that we're in," Stokes said. "We have to have a meaningful law enforcement response."
