This is NOT Fraud Advice: Elderly Fraud

Hello, fraudsters - can you believe it is almost September :(

The good news is that I have been able to flex the sweaters I got on sale this summer at the office this past week. Definitely earlier than expected. Great to begin amortizing the new goods. If you see me strutting around Soho looking for compliments, please indulge me.

Now, let's get down to business. We are chatting about Elder Fraud. This piece was inspired by some excellent reporting at Bloomberg, covering a woman duped into turning over $1.4 million to fraudsters. Shout out to Alexander Johnson for putting it on our radar.

This type of fraud has been on the rise lately. Today's elders often have a limited understanding of technology, but all have phones, emails, and social media to keep up with their families. They also now hold a record amount of wealth. This is a perfect storm for clever fraudsters.

Bloomberg covered one case, Annette Manes. She is an 83-year-old JP Morgan customer and millionaire who was the victim of a heartbreaking scam.

Annette received a call from a fraudster pretending to be a member of the Fraud Team at JP Morgan. He claimed they suspected an internal employee had been selling the identity information of their older customers. The fraud team needed Annette's help. She was to play the role of a victim to help them catch the bad actor.

The fraudsters instructed Annette to withdraw and wire large sums of money to different accounts, mimicking a victim's behavior. They gave her instructions on how to respond to inquiries from the bank, explaining that this was a secret operation and nobody else could know.

Over nine months, five bank accounts, and three credit cards, the fraudsters stole $1.4mm from Annette. Finally, Wells Fargo contacted Adult Protective Services, which contacted her son, Peter. Peter now has the unenviable job of detangling this mess and fighting to regain some of these losses. Regaining the money is particularly challenging.

Banks have long held the position that they are not responsible if one of their customers falls victim to a scam so long as they take "commercially reasonable" security protocols to verify the transaction's authenticity.

They train their tellers to look for hints, but if the customers respond confidently, they often approve the transaction and carry on.

It does not seem like these practices are enough to protect some of their elderly customers, and this fraud is rising. In a study, AARP estimates that annual fraud losses by people over 60 exceed $23 billion (more than half of the $40B of fraud losses to identity theft each year).