Elder Financial Abuse

With the advent of new financial technology and digital currency, older adults are more vulnerable than ever to online financial fraud and exploitation.

Elder financial abuse is a category of financial scams that continues to evolve as technology changes. Aging populations are particularly vulnerable to online scams due to their lack of familiarity with modern technologies and limited access to tech support. This naiveté, coupled with increased isolation and a generally trusting nature, make older Americans attractive targets for both simple and sophisticated scams.

In 2023, almost 25% of cryptocurrency-related complaints received by the FBI were made by Americans 60+.

Common Cryptocurrency Scams

In addition to traditional hacking and other types of online fraud, cyber crimes targeting American seniors has expanded to include cryptocurrency scams. Here are some examples of how scammers may execute their attacks:

• Sim Card Swap Hack - A cyber criminal tricks the mobile phone carrier into transferring a victim’s phone number to the attacker's SIM card, allowing them to intercept 2FA communications.
• Spoofed Exchange Websites - Scammers develop fraudulent websites or applications that imitate a legitimate exchange or wallet, tricking victims into depositing funds.
• Impersonation or Call Center Fraud - Scammers will impersonate a bank, business, government agency, tech support agent, or notable public figure to gain access to a user’s computer systems, passwords, and/or personal information.

Visit the FTC's consumer guide to avoiding cryptocurrency scams here.

How does Elder Financial Abuse occur?

Although institutions have the tools and knowledge to prevent financial exploitation of their customers, oftentimes banks and digital currency platforms are negligent in their responsibilities. Scams are able to occur due to several failures:

Lack of Adequate Safeguards by Cryptocurrency Exchanges: Cryptocurrency exchanges often do not invest sufficiently in compliance and consumer safety measures, despite having advanced transaction monitoring technology.

Failure of Traditional Banks: Banks act as entry points for fraudsters by allowing transfers to cryptocurrency exchanges without proper due diligence, increasing the vulnerability of older adults to financial scams.

Ignorance of Red Flags: Both cryptocurrency exchanges and banks often ignore warning signs, such as irregular transaction behaviors, that could prevent scams.

Neglect of Duties as Mandated Elder Abuse Reporters: Financial institutions fail in their legal responsibilities to protect vulnerable customers and report suspected elder abuse.

Crypto Theft Recovery

Cryptocurrency theft has increased drastically over the past few years, as more inexperienced investors flood the space. Many victims are unsure where to turn for help. At Kronenberger Rosenfeld, our cryptocurrency theft attorneys advocate for victims of cryptocurrency theft, handling:

• Disputes with centralized exchanges
• Thefts from private wallets
• Scams involving voluntary transfers from a private wallet due to fraudulent promises