Fraud Against Older Americans Increasingly Threatens Retirement Security

March 27, 2025

FYI Week of March 27, 2025

While the number of consumer fraud cases reported to the U.S. Federal Trade Commission (FTC) more than doubled to 2.6 million between 2019 and 2023, losses tripled to $10 billion, suggesting that those committing scams are becoming more effective, particularly against older people. Americans over age 60, who have long been more susceptible to fraud, are seeing this vulnerability being exploited by new and unfamiliar technologies. Although new technology-based methods to prevent fraud are proving to have some success, these can be difficult to implement on a large scale and may not work well with older people, according to the Squared Away blog supported by the Center for Retirement Research at Boston College (CRR). What can NCTR members do to help their participants whose retirement security can be placed at risk by these scams? A recent report from the TIAA Institute contains suggestions for actions retirement plan providers, sponsors and participants can take to address this growing problem.

TIAA says most scams are never reported to authorities. For example, it has been found with fraud cases that involve low dollar losses — under $100 – fewer than one in 1,000 victims file a complaint. However, although fraud is vastly underreported, older victims who do, in fact, file complaints typically report much higher median losses compared to younger victims—$1,450 for those age 80 or older compared with less than $500 for those ages 20 to 59.

TIAA also underscores that the average losses from scams that people over 60 reported to the FBI – presumably the most serious cases, TIAA explained – reached $34,000 in 2023, up from $9,175 in COVID’s first year. This is quadruple the average loss amount reported to the FBI just three years earlier in 2020 ($9,175). “These trends suggest criminal enterprises are becoming more successful at extracting significant amounts of money from older people,” TIAA stresses.

In sum, 5.4 percent of older Americans are victims of one or more fraud schemes every year, TIAA finds. Furthermore, AARP projects that, as a group, older Americans have at least $8 billion stolen by scammers annually. However, using different assumptions on the extent of underreporting and average losses per scam, the FTC estimates older adults have somewhere between $5.9 billion and $48.4 billion stolen by scammers each year.

The Squared Away blog reports the most common type of fraud comes in emails or calls seeking personal information from people who claim to be from trusted organizations. “Calls from government imposters purportedly from the IRS, Social Security, or the Consumer Financial Protection Bureau spiked during the pandemic,” the blog notes. While the level has since subsided, such calls have not disappeared, the blog explains. Currently, retail and other private-sector imposters — which also spiked during COVID — are the bigger threat, according to FTC data in the TIAA Institute’s report.

While scams vary in prevalence and severity, several forms have a disproportionate impact on older adults, TIAA notes, including imposter scams. Other frequent forms targeting older adults include what TIAA refers to as “Get rich quick” investment frauds, which are associated with some of the largest personal losses. For example, losses associated with these schemes have increased 38 percent, going from $3.3 billion in 2022 to $4.6 billion in 2023. Investment scams also often capitalize on cryptocurrency and the increased level of interest in alleged profitable cryptocurrency investments.

However, of all deceptive schemes, TIAA says that “online romance scams may cause the greatest harm to older victims.” In such cases, “victims are groomed by remote predators for months as they establish a confidential and hyper personal relationship,” followed by the fake love interest presenting a series of fabricated crises that are keeping them apart. The scammers then ask the target/victim for financial help to resolve each crisis so they can finally be together, TIAA explains. Based on FTIC complaint data, median losses are about $10,000 for those aged 70 and older. “Not only are these scams costly — with some victims liquidating their retirement accounts and borrowing money from friends and family to send to the scammer — they also have severe emotional consequences,” TIAA stresses.

The TIAA report goes on to discuss persuasion tactics used to manipulate older adults. Why? TIAA explains consumers “should familiarize themselves with these tactics, and if they’re detected in any communication context, take it as a signal to exit the interaction and talk with someone they know and trust.”

These persuasion tactics include:

Authority. One of scammers’ most common persuasion tactics is authority, TIAA finds, whereby, in impersonation schemes, scammers create fake job titles and pretend to be affiliated with recognizable and trusted organizations, such as an FBI agent, a police officer, a computer repair technician, a fraud investigator or a registered investment advisor. TIAA says the use of authority activates decision-making shortcuts in processing new information and prevents people from critically analyzing the information they are being told.
Emotional arousal. Scammers also try to elicit powerful emotions in their victims. Depending on the type of scam, these may include positive emotions like excitement, surprise, and exhilaration, as well as high-arousal negative emotions like anger and fear. Such “high-arousal” emotions “consume cognitive resources and motivate individuals to act immediately based on instinct rather than reasoned analysis,” TIAA explains, causing people to process scam messages more superficially and “miss the red flags that are detected by paying close attention.”
Urgency or scarcity. Scammers often put intense pressure on their targets to act quickly. TIAA says these “manipulations” are effective because they produce an emotional response that impairs rational thinking; cause people to think they have less time to ask critical questions and seek a second opinion; and, based on the “scarcity principle” — when people think they will lose out on something because it is limited or temporary — they tend to want it more.
Secrecy. To keep the target under their influence, scammers will tell them to keep all interactions private and confidential. TIAA notes, for example, in lottery scams the target may be told not to talk about their winnings “because then everyone will come asking for money.” Also, to avoid intervention from outside parties, “scammers may even craft lies for the target to use if they’re questioned about the purpose of a financial transaction,” coaching them to say they are cashing out their investments to pay for a home remodel, for example.
Phantom fixation. Many scams are specifically tailored to respond to targets’ unmet needs, and once a scammer identifies what these are — companionship, romance, or financial independence, for example – TIAA warns they will use “phantom fixation to activate the target’s desire and deepen their commitment to the scam’s premise.” For example, investment scammers will promise financial freedom and activate fantasies of wealth and luxury, and this “visceral imagery helps the target envision a more desirable future — one they’re told can only be achieved by complying with the scammer’s demands,” TIAA underscores.

One sobering item that needs to be highlighted is that TIAA reports scammers also use artificial intelligence (AI) to enhance their deceptions. For example, generative AI allows scammers to draft persuasive messages with perfect grammar and punctuation, TIAA notes, and recent news reports discuss “the alarming use of deepfake technology to digitally clone the voices and likenesses of victims’ relatives, coworkers, and even celebrities, deceiving victims into transferring substantial funds.” TIAA says these technological tools have alarmed officials because AI-enhanced scams are much harder for consumers to identify as fake, especially consumers who are less familiar with the capabilities of generative AI.

Next, the TIAA report touches on age-associated risk factors, noting that a growing number of studies indicate that such risk factors as cognitive impairment and social isolation “are associated with greater scam susceptibility.” Indeed, declines in cognitive functioning and, more specifically, declines in executive functioning are the most cited risk factors for scam victimization in older adults, TIAA states. However, people experience varying health, social and financial “trajectories” as they age, and the risk factors like cognitive decline, loneliness and wealth accumulation are not universal among the older population. “In fact, young adults who have these characteristics may be equally vulnerable to exploitation,” TIAA observes.

Finally, TIAA turns to fraud prevention and intervention activities that can help protect older adults from scams. TIAA believes these require primary prevention, which focuses on reducing the risk of exposure to and engagement with scams; secondary prevention (or intervention), referring to immediate responses to threats and the protection of funds if scam victimization is suspected or has occurred; and tertiary prevention, which TIAA describes as reducing the longer-term risks and harm associated with scam victimization.

TIAA then goes on to discuss in detail each of these fraud prevention and intervention activities, as follows:

PRIMARY PREVENTION:

SCAM AWARENESS AND CONSUMER EDUCATION. TIAA says prior knowledge about specific scams confers protection, and the most effective way to minimize the impact of victimization is to prevent scam exposure and fortify a person’s defenses. “Raising awareness about common scams and persuasion tactics is a key component of primary prevention,” TIAA stresses. Scam awareness messages should be memorable and action-oriented, TIAA underscores, using empowering language (no victim blaming) and focusing on the positive benefits of heeding the message. “Specific action steps might include advice on hanging up on unknown callers, refusing to allow strangers to remotely access your computer, and talking to trusted family members before making any large investments or transactions.” Scam awareness messaging should also be memorable and personally relevant, and it should use compelling stories to help people connect with the experience of victimization, TIAA adds. In addition, forewarning vulnerable older adults about specific scams significantly reduces their likelihood of becoming a victim, studies have shown. For example, participants who received text or video education on investment scams were significantly less likely to express a willingness to invest in fraudulent investment opportunities than individuals who received no such training. Reminder messages should also be sent a minimum of every few months, and these need to be updated to include information on how scams have evolved and what new red flags require attention.
EDUCATING FINANCIAL ADVISORS AND PLAN SPONSORS. TIAA stresses that “educating financial advisors on the red flags of fraud is critical.” Also, as advisors and counsellors may work with the same plan participants for decades and through multiple life stages, they often notice early changes in their plan participant’s behavior or risk preferences that could signal diminished financial capacity—a risk factor for fraud – and these advisors should therefore contact the plan participant’s trusted contact if they have concerns.
ACTIVATING ACCOUNT SAFEGUARDS. TIAA notes that financial institutions often invest in the latest tools and technologies to monitor and protect their accounts from unauthorized access, identity theft, and fraud, and that a “core component of account security is verifying plan participants’ identities and making sure they are not being manipulated to act against their best financial interests.” Such strategies may include using advanced machine learning, behavioral biometrics and AI-detection to identify unusual account activity or behaviors that are inconsistent with a plan participant’s past activity, device use, or location. TIAA says these enhanced fraud-detection tools can “help indicate whether the plan participant is experiencing a scam or if an unauthorized third-party is attempting to access their accounts.” Plan participants also need to keep their retirement accounts secure by engaging in fraud prevention measures such as activating security features on online accounts. However, reducing exposure to Internet-enabled scams requires protecting devices from theft and malware, so plan participants should also use virus protection software and update and install security patches when prompted. Finally, TIAA stresses all social media users should understand the risks of accepting new friends or follow requests from people they meet on the Internet, and consumer education “should include advice about never engaging in remote financial transactions with social media contacts or callers on the telephone.”
ADVANCE FINANCIAL CARE PLANNING. As people age, TIAA observes they may experience health challenges that make managing their accounts and making financial decisions more difficult, which can increase their risk of scams and fraud. Therefore, to keep their retirement accounts safe as they age, plan participants should engage in advance financial care planning, TIAA underscores, including making sure beneficiary designations are up to date, appointing trustworthy and dependable agent(s) under power of attorney (POA), and designating a trusted contact for their retirement and investment accounts. Having a trusted contact on file adds an additional layer of protection against scams, TIAA stresses.

SECONDARY PREVENTION: TIA points out that as scams are becoming increasingly sophisticated, when prevention fails, it is critical to have a second line of defense, as follows:

IN-THE-MOMENT SCAM WARNINGS. If suspicious account activity is detected, financial institutions can warn plan participants with mobile and email push notifications, TIAA points out. (Push notifications are messages sent from a server to a user’s device (mobile or desktop) even when the app or website isn’t actively open, appearing as pop-ups or alerts.) Therefore, plan participants should make sure their contact information is up to date, and they have mobile and online accounts activated; and if they receive a push notification about a transaction they did not authorize, plan participants should immediately call their financial institution to confirm it was fraud. “Push notifications and other in-the-moment warnings have the potential to stop fraud in its tracks,” TIA stresses, but only if the plan participant pays attention to the message. Also, in a scam, TIAA notes it may be the plan participant moving money out of their account, not a cybercriminal who has taken over their account without their knowledge, so push notifications about suspicious activity may not be effective when the plan participant is being manipulated to authorize the transaction. “Instead, retirement plan providers may ask for additional verification from the plan participant in the notification message to slow down the process, such as requiring them to speak to a representative over the phone before they can proceed,” TIAA explains.
COMMUNICATING WITH PLAN PARTICIPANTS EXPERIENCING SCAMS. Investment counsellors and other client-facing employees can be trained to detect a plan participant being coached by a scammer and motivate them to end the interaction and report to authorities. TIAA stresses that when intervening, it is important for an institution’s employees “to be patient when describing their concerns and asking key questions about the intended purpose of a suspicious transaction or request,” and that “non-accusatory, empathetic communication is essential to build trust.” The goal is to make plan participants feel safe by disclosing truthful information about a transaction they may have been instructed to keep as a secret or lie about. Because financial predators can use undue influence to control their victims, TIAA therefore underscores that it is critical to be persistent with plan participants and be willing to temporarily suspend transactions while investigations take place, but also clearly communicate the purpose of the hold to plan participants.
REPORTING SCAM VICTIMIZATION. Notifying authorities about scam victimization is critical for several reasons, TIAA explains, as reporting a financial loss within 24 hours of the fraudulent transaction increases the likelihood of recovering stolen funds. There are other important reasons for notifying authorities that TIAA also details.

TERTIARY PREVENTION: protecting plan participants from future scams.

REVICTIMIZATION. TIAA warns that while victims are recovering from fraud, “they may be bombarded by more deceptive offers because their contact information was added to ‘lead lists’ and sold to other scammers,” and they are therefore at high risk of revictimization. Institutions should therefore work with plan participants who have experienced scams to review their accounts, update passwords, opt in to security features, and make sure their POA and trusted contact forms are up to date.
FINANCIAL CAPACITY. If an advisor has concerns about a plan participant’s financial capacity, they may want to reach out to the individual listed as a trusted contact. “This person can help by verifying the plan participant’s health status and determining if more financial oversight and assistance is needed from friends or family,” TIAA explains. “Respecting a plan participant’s financial autonomy and desire for privacy is paramount, but safety and financial well-being are also top priorities,” TIAA stresses, and notes that in cases where plan participants are unable to recognize they are being victimized and are at risk of authorizing further fraudulent transactions, retirement plan providers can place temporary holds on the disbursement of funds from their accounts. However, before placing a temporary hold on funds, there must be a reasonable suspicion that the plan participant is experiencing a scam or is being exploited by a friend or family member. Temporary holds provide time to investigate suspicious activity and share concerns with law enforcement, as well as notify trusted contacts and agents under POA concerning the plan participant’s underlying health and safety needs.
ADDRESSING UNDERLYING NEEDS. Reducing a plan participant’s risk of revictimization requires addressing the underlying need that drove them to respond to the scam solicitation in the first place, TIAA points out. For example, financial and emotional needs may be caused by financial insecurity, loss of purpose, bereavement and social isolation, TIAA notes, and addressing these needs among older adults is an important role for family members, friends, neighbors, social service agencies and the broader community. TIAA encourages plan sponsors to engage in scam awareness outreach, educating employees, and advocating for programs that support people as they age.

In conclusion, the TIAA report warns that “[b]old new strategies and solutions are needed to pull ahead in the technological race against scammers and cybercriminals.” Furthermore, TIA underscores that retirement plan providers “must work hand-in-hand with plan sponsors, plan participants and other financial industry partners to defend against these evolving threats to Americans’ retirement security.”

NCTR agrees and believes the new TIAA report offers important information concerning the signs that plan participants – particularly older plan beneficiaries – should heed regarding effective scam prevention, and the steps that retirement systems, public employers and plan participants can take to improve fraud prevention and intervention activities to help protect older adults from the financial and emotional damages increasing fraud presents.