Majority of elder fraud scams a result of personal data vulnerabilities

As information technology continues to evolve at breakneck speeds, senior citizens are increasingly getting left behind. It’s easy to remember older relatives struggling to work a computer mouse in the ‘90s and think “that’ll never be me” but, one day, it very likely will.

The kind of bewilderment and confusion that new technologies engender in older people leave them particularly vulnerable to a whole range of crimes, especially those involving phishing and fraud. People over 60 may well be able to use a computer or smartphone without too many problems these days, but they’re generally ill-equipped to take care of their data security or sniff out data-driven crimes before it’s too late.

Elder fraud affects everyone, either directly or indirectly. Perhaps you’re at risk, or maybe it’s your parents or grandparents who are at risk. With people over 60 losing a total of at least $3.1B to criminals in 2022 alone, the effects are bound to be far-reaching. The question Incogni is asking is: what role does the availability of personal and sensitive data play in all of this?

Key insights:

• In 2022, people over the age of 60 lost a combined total of $3.1B to fraudsters and other criminals, the highest amount recorded by far.
• 103,000 crimes (across 30 categories) were reported and almost 60% of them (accounting for 12 out of the 30 categories) were likely facilitated or made worse by criminals having access to people’s personal data. 
• Investment scams, a data-enabled crime, affected 4,700 elders in 2022, contributing the loss of almost $1B ($990M) to criminals. 
• Investment scams were the fastest-growing type of elder fraud after cryptocurrency scams.
• Researchers found almost 8,000 people over 60 years old who were affected by a personal data breach.
• California was the most affected state, with the average victim losing over $54,000.
• Since 2020, the numbers of reported victims have been dropping slightly year-on-year, but total losses have continued to skyrocket regardless.

The elderly have seen staggering increases in the losses they’ve experienced

Between 2018 and 2022, the number of people over 60 reporting fraud to the IC3 increased from 62,000 to 88,000. However, this wasn’t a steady increase, with 2020 seeing the highest numbers of reported elder fraud with a staggering 105,000 reports. From that peak, the number of victims dropped by 12% in 2021 and then a further 4% in 2022. 

While the number of victims over 60 has been dropping since its 2020 peak, there’s been a worrying increase in the average financial losses per victim. In 2020, the higher number of victims experienced an average loss of $9,000 and since then, as the number of defrauded elders decreased, the losses increased. In 2021, the average victim saw a loss of $18,000 and the number almost doubled in 2022 to $35,000 lost per victim. 

Financially, in 2022, the most notable types of fraud were cryptocurrency related (being at least partially responsible for the loss of $1.1B by people over 60), investment (partly responsible for the loss of $990M) and tech support related scams (at least in part leading to the loss of $590M).

Californians were most affected, with 11,500 victims from the state losing a total of $625M—that’s a devastating $54,000 per victim on average. Florida is second by both victim and loss figures, at 8,500 and $328M, respectively. In third place, 5,700 older Texans fell victim to these criminals, losing a combined $243M. New York was fourth by number of victims and amount lost, with 4,200 losing a total of $212M.

Most felt and costly types of fraud

A single instance of fraud can have several types associated with it. For example, a romance scam can start with a personal data breach and involve cryptocurrency fraud in its latter stages. In such a case, a single victim is defrauded once, but the crime counts towards three types. For this reason, the losses below can be compared to each other, but won’t add up to the overall total because of these overlaps.

In 2022, tech support scams reached the highest number of victims, affecting 18,000 people over 60. The next most “felt” type of victimization reported was cryptocurrency related fraud, which was reported as having affected 10,000 individuals. In third place, non-payment and non-delivery scams hit 8,000 elders. 

Sensitive data and how it can lead to fraud

Incogni’s researchers identified 12 types of crime (out of 30) that can be made possible or made worse if the criminals have access to your data. Here’s a more in-depth look at these crime types.

Over 103,000 crimes were indicated in the complaints received by the IC3 in 2022, nearly 60% of these were identified by Incogni’s researchers as being facilitated or exacerbated by the perpetrators having access to their victims’ personal data.

Investment scams clearly stand out here: they’re particularly costly to the victims (accounting for nearly $1B in losses) while also affecting a notable number of elderly people, with 4,700 victims reported in 2022 alone. This type of fraud has a greater chance of success and leads to greater damages when criminals have access to information on the target’s income, savings, or assets.

Tech support scams were by far the most commonly reported, affecting almost 18,000 people over the age of 60 in 2022. This highlights the extent to which new technologies are the Achilles’ heel of older people. Tech support scams were also the second most costly type of crime, contributing to $590M in total losses.

Business Email Compromise (BEC) is a crime targeting businesses rather than individuals, but was nonetheless responsible for contributing to $477M in losses in 2022. It may be that older people are more likely to be placed in positions of greater responsibility in the workplace or run their own businesses. Over 3,900 people over the age of 60 reported being affected by this type of crime.

Confidence and romance scams were the fourth most-felt crimes in Incogni’s analysis. They contributed $420M in losses in 2022 and affected a reported 7,200 elders. It’s not difficult to imagine how singles in their 60s and beyond might be more vulnerable to this kind of scam. 

The role of personal-data availability in elder fraud

Of the 30 crime types studied from the FBI’s datasets, 12 at least in part depend on the availability of the victims’ personal information. Some crimes captured under the elder fraud umbrella, like identity fraud, are totally dependent on such data availability. The biggest one-stop-shop sources of such information are data brokers.

In an earlier study, Incogni found that older Americans are least likely to agree with statements like “I know how to practice my right to privacy online” and “privacy protection laws in my state are adequate.” This suggests that data-privacy protection might be an area with which these age groups struggle in this very digital and online age.

These responses, together with the elder fraud findings presented here, also suggest that older Americans may be among those who would benefit most from data protection laws like the California Consumer Protection Act (CCPA). Such laws put limits on companies like data brokers and make the kinds of crimes discussed here more difficult to perpetrate.

Methodology

Incogni’s researchers examined the Annual Reports and Elder Fraud Reports published by the Internet Crime Complaint Center (IC3), a division of the FBI, looking for details regarding internet crimes against people over the age of 60. This information was collected from people reporting such crimes to the IC3. From these reports, the researchers aggregated yearly losses and victim counts per crime type. This was also supplemented with 2022 data concerning state-level information.

Using the information gathered, Incogni’s researchers explored trends in victim counts and amounts lost on a per crime basis. They took particular note of crimes that can be exacerbated by private information being available through data brokers and people search sites. 

Notes on the data:

The FBI started publishing Elder Fraud Reports as companion reports to its annual Internet Crime Reports in 2020, so victim and loss figures for people aged 60+ for years 2018–19 were collected from the IC3’s annual reports.

Furthermore, not all reports made by people and published by the IC3 contain state information. Also, when lodging reports with the IC3, people can detail several crime types, meaning that the amount lost is attributed to each crime mentioned. In turn, the public data does not lend itself to calculating what proportion of all losses can be attributed to any given crime.

The data used in this research is available here: Public dataset.

Sources

1. Federal Bureau of Investigation. “2018 Internet Crime Report.” IC3 Annual Report, 2018. Accessed November 2, 2023. https://www.ic3.gov/Media/PDF/AnnualReport/2018_IC3Report.pdf
2. Federal Bureau of Investigation. “2019 Internet Crime Report.” IC3 Annual Report, 2019. Accessed November 2, 2023. https://www.ic3.gov/Media/PDF/AnnualReport/2019_IC3Report.pdf
3. Federal Bureau of Investigation. “2020 Elder Fraud Report.” Companion report to the IC3 Annual Report, 2020. Accessed November 2, 2023. https://www.ic3.gov/Media/PDF/AnnualReport/2020_IC3ElderFraudReport.pdf
4. Federal Bureau of Investigation. “2021 Elder Fraud Report.” Companion report to the IC3 Annual Report, 2021. Accessed November 2, 2023. https://www.ic3.gov/Media/PDF/AnnualReport/2021_IC3ElderFraudReport.pdf
5. Federal Bureau of Investigation. “2022 Elder Fraud Report.” Companion report to the IC3 Annual Report, 2022. Accessed November 2, 2023. https://www.ic3.gov/Media/PDF/AnnualReport/2022_IC3ElderFraudReport.pdf