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Fraud Watch and the Importance of Reporting Scams

Kathy Stokes talks about the AARP Fraud Watch program and why reporting scams is so important.

Many people assume that scammers target older people. But that couldn’t be further from the truth. Scammers go after everybody, regardless of your age, your education, how much money you have to lose, or anything else. But fraud watch organizations have a difficult time determining exactly how much scams are targeting any demographics. They can’t know what people don’t report. That’s just one of the reasons why reporting scams is so important.


See The Problem with Not Reporting Scams with Kathy Stokes for a complete transcript of the Easy Prey podcast episode.

Kathy Stokes is the Director of Fraud Prevention Programs with the AARP. She leads their social mission to educate older adults about fraud and how it puts their financial security at risk. Her career started in government affairs and public policy issues. One of her early projects was helping employers understand and manage the shift from traditional pensions to 401(k) plans. From there, she started doing financial education for large employers, helping to educate their employees about the benefits of 401(k)s. Over time, her education work transitioned from 401(k)s specifically to how people can prepare for a financially secure retirement, and then how scams and fraud put people’s hard-earned assets at risk. Now she runs the AARP Fraud Watch Network, which is all about helping everybody, especially older adults, understanding the risk fraud poses to their finances, and also supporting people who have experienced fraud.

The AARP Fraud Watch Network

AARP can be a confusing organization, even from the inside. That’s because it has three parts. There’s the for-profit AARP Services Incorporated. That’s what most people think about – it’s the part of the organization that has memberships and works to get great discounts and membership resources for those members. They also have a foundation that does charitable work to support older adults. And finally, they have what they call the enterprise. This is the social mission part of the organization, and it’s where heir outreach, education, and advocacy work happens. That’s where the Fraud Watch Network is, working hard to help people protect their assets from fraud.

All that great stuff you did to have these assets … to live through retirement are at risk.

Kathy Stokes

The AARP Fraud Watch Network has actually been around for a long time in different forms. AARP has offices all around the country. In the mid-2000s, a handful of those offices saw a lot of fraud activity happening and decided they should do something. They created their own fraud network program, completed with trained volunteers. Eventually, that caught the attention of the AARP national office. It became a nationwide program around 2013. In 2019, it was moved to a different part of the organization, revamped, and given more resources. That’s when it took on its current form – talking about how people can protect themselves, and also what society needs to do to adjust to the state of fraud today.

Fraud Targets Everyone

The common understanding is that older people are more likely to be targeted by scammers and fraudsters. But it’s hard to prove or disprove that with data. We really don’t know how much fraud is out there. No one can count fraud that isn’t reported, and fraud is extremely under-reported.

We really don’t know how much fraud is out there because you have to report it for anybody to know.

Kathy Stokes

Even with the lack of reporting, the Federal Trade Commission (FTC) has been looking at this data for years. Younger adults have always reported more fraud to the FTC than older adults, and they lose money more often. We can’t be sure if more younger adults are being victims or if they’re just reporting it more. But it’s very clear that scammers and fraudsters are also targeting younger adults.

What concerns Kathy and the Fraud Watch network is that with older adults, there’s much higher potential loss. It makes sense if you think about it. Someone who is just out of college or just starting their career doesn’t have a lot of assets and is probably at the bottom of their earning ladder. But an eighty-year-old with a good retirement nest egg has a lot more money to lose. And there’s also a time horizon to that loss. It might be devastating for that recent graduate to lose the $1,000 that was in their checking account, but they will likely be able to earn it back in a few months. Not only does a retiree have a lot more money to lose, they have significantly less time and ability to earn more to make up for the loss.

Reporting Fraud to Law Enforcement

We don’t have definite data on fraud because it’s significantly under-reported. And one of the biggest barriers to reporting is one that is, thanks to a lot of people’s hard work, starting to break down. That barrier is shame and victim blaming. People are ashamed that they fell for it, and they are afraid that other people will blame them.

Fraud watch doesn't have great data on fraud because people are often ashamed to report.

We are very close to a turning point with that barrier. Just a few years ago, research showed that people didn’t think they would fall for a scam, and if somebody did they assumed it was something they did that made them vulnerable. Having this attitude prioritized fraud. If you can say that it only happens to other people, you don’t have to worry about it. But that’s starting to change. Just a few weeks ago, the AARP Fraud Watch Network launched new research asking people about their concerns about fraud. And they’re not finding that people think it only happens to other people. The vast majority of US adults worry about fraud. And their top concern? Being a victim themselves.

91% of US adults worry about fraud now, and their number one concern: Becoming a victim themselves.

Kathy Stokes

This allows for the change we need to see. We don’t often ask what the victim did wrong if they are robbed or carjacked. We might say they should have locked their doors if that was a factor, but it’s still a small part of a larger discussion. And that person is still seen as a crime victim. The police still show up, investigate, hunt for the bad guy, and hopefully catch and imprison them. That’s not really happening with fraud.

Report Fraud to the Police Anyway

Police often aren’t helpful to fraud victims. They often say that it’s a financial crime, so the police can’t help. That’s not the fault of the officer taking the report. They’re made to believe property crimes and violent crimes are the ones they can do something about. They view fraud as something they can’t do much about, so they don’t try.

Kathy still encourages everyone to report scams and fraud anyway, for a few reasons. One reason is data. Reports give organizations like the AARP Fraud Watch Network and the FTC more data to work with. They also give law enforcement a better idea of how big the problem is. And when law enforcement can see something is a massive problem, they start allocating resources to it. More resources leads to more investigations and, hopefully, more fraudsters arrested.

The other reason to report is for potential future reimbursement. If several years down the road, the government creates some sort of restitution fund for financial crimes victims, having a police report will make it much easier for you to claim some compensation. And if a bunch of other people report the same scammer, they’re arrested, and the police recover some money, a report shows that you were a victim and you might get some of that back.

How Fraud Reporting Helps Fraud Investigation

One big challenge with fraud investigations is that they never start to begin with. Many people in the legal system don’t understand the impact prosecuting fraudsters could have. And fraud is often done by crime rings overseas, so they assume they couldn’t get at the criminals anyway. But the truth is, there are things they could do. The masterminds may be outside the country, but there are tons of co-conspirtors working within the US as “money mules” to launder their ill-gotten gains.

Law enforcement and the justice system could go after these middlemen. That’s actually how we handle drug crime. It’s much harder for the people outside the country to commit crime if they don’t have the middlemen inside the country to help them do it. They key is to get these middlemen off the streets and give them real time. This actually happened in San Diego County a few years ago. Law enforcement took down the US end of a grandparent scam that had stolen millions of dollars. The lawyer argued that they were just moving money. But the judge knew what was up and gave them nine years.

The problem is these scams that are happening … [to] law enforcement, they’re low-dollar.

Kathy Stokes

Another challenge with these scams is that especially to federal law enforcement, they’re low-dollar. If you lose $10,000 to a scam, that’s obviously not low-dollar to you. But because of resource limitations, federal law enforcement views that as not enough money to be a high priority. This is another place where reporting helps fraud watch and investigations. Reporting could connect your $10,000 to other losses. Instead of “John Smith lost $10,000,” now you have “This criminal group stole $1,000,000 from Americans.” Once the number gets big enough, the FBI feels like it’s worth investigating.

Reducing Shame Around Reporting

We can all take steps to help fraud watch and investigation efforts. One big thing that anyone can do is to help reduce the shame around being scammed, which can help more people to report. Kathy encourages everyone to check out aarp.org/saythis. It’s a page designed specifically for adults doing some kind of caregiving for older loved ones. It helps them understand that if fraud happens to an aging parent, it’s not something they did.

We also need to talk about scams out there, and do it regularly. When someone knows what scams are out there, they’re better able to see t hem coming. Research done in 2019 showed that if people knew about a specific scam, they were 80% less likely to engage with it. So talk about scams with your parents, aunts and uncles, and even siblings. Having conversations is very protective.

AARP also has a version of this webpage for professional contexts at aarp.org/wordsmatter. This page is designed for financial institutions, helplines, law enforcement, Adult Protective Services, and other organizations to help them understand the victim experience. No one wakes up intending to send $10,000 to a scammer; the scammer convinced them their grandchild needed help. When we think about that context, we’ll start to see change.

Language to Avoid

AARP Fraud Watch Network talks about language because using the wrong language can make people feel shamed or blamed and discourage them from reporting. It’s important to avoid focusing on something the victim did. Don’t say they “fell for it,” he “was scammed,” or she was “duped.”

The focus on something that the victim did, the victim fell for it … these kind of things don’t even bring into the discussion that there was a crime committed.

Kathy Stokes

We don’t say a bank teller was tricked into handing over money from the cash drawer when an armed robber came in. We focus on the fact that a bank robber committed a crime. Words like “swindled” or “tricked” completely ignore the fact that a criminal committed a crime and stole their money. Instead, we can rephrase those sentences. Instead of “He fell for a scam,” say “A criminal stole his life savings.” There are examples on the websites mentioned above that can help.

Fraud watch encourages us to change our language - instead of blaming the victim's actions, remember that scams and fraud are crimes.

Protect Yourself From Scams

One of the things AARP Fraud Watch Network does is teach people how to protect themselves from scams. There are things everyone can do to be safer. Just like locking your house at night and locking your car when you walk away from it can help keep you from getting robbed, there are things we can do to make it harder for scammers to steal from us.

Unfortunately, in society right now, we cannot trust incoming communications.

Kathy Stokes

A big thing is not to trust any incoming communications. Unfortunately, no matter who a caller, texter, or emailer claims to be, it’s hard to verify that. Kathy recommends having a small list of people, like your daughter or your doctor, who you do answer when they call, and everybody else goes to voicemail or your answering machine. We also get a lot of emails with malicious links. Any email or text message from a company you do business with, don’t engage. Instead of clicking the link or calling the number they give you, go directly to the website, or open the app, or call a trusted number you know to verify.

Social media is a big vector for fraud, too. Kathy sees it all the time. Somebody’s Facebook account gets hacked and they send messages to all that person’s friends saying they just collected a bunch of federal grants, and they can get free money too by clicking the link. It’s important to lock down your accounts. Turn on two-factor authentication if you can. And limit the audience who can see your posts.

What to Do If You’ve Been Targeted by (Or Lost Money To) a Scam

If the scam had anything to do with a bank account or financial institution, contact them as soon as you realize. They may have an option to stop the transaction or at least part of it. If they coerced you into buying a gift card and reading them the number, call the number on the back of the card. It may not be happening as much now, but in the past, money might not be drained right away because scammers just had so many of them – there may be an option to get some of that money back.

The most important bottom line is to report it to law enforcement. There are a lot of valid reasons for not reporting, but no good reasons. It’s important to get past the idea that it’s your fault and you’re stupid. Instead, get angry! Somebody made you believe something that isn’t true, and they used that to steal your money. Report it to the police! Will they investigate? Probably not at this stage, but the information might help with other cases they have, and it’s certainly not going to hurt you.

In some ways, it parallels your health in that you have to be your own advocate. Don’t just assume the police are going to follow up and the bank is going to do their part. Follow up with them. Ask what they’re doing and what they’re going to do. You’ll find people do want to help. There’s a growing understanding that it’s not the victim’s fault slowly changing how front-line people approach these issues. Even if you can’t get your money back, you may be able to find other support or even just validation – and that can go a long way.

AARP’s Victim Services

One of the services the AARP Fraud Watch Network provides is victim services. They operate a helpline that has been operating since before the Fraud Watch Network was even official. They have trained volunteer fraud specialists taking calls all over the country. You can call them at 877-908-3360 Monday through Friday from 8AM to 8PM Eastern time.

If you didn’t lose any money to a scam but want to report it so the Fraud Watch Network has better data, you can do that. The person at the hotline will record the scam you tell them and send it to the FTC. If you’re not sure about something, or you or a loved one lost something to a scam, they also have 200 trained fraud specialists on staff that you can talk to.

They also operate a Zoom-based victim support group. The sessions include a facilitator and five or six people willing to talk about their experience. It’s about supporting each other and understanding that it’s not your fault and you’re not alone. There are repeat attendees all the time because the emotional support is so helpful. Don’t be afraid to seek out support where you need it. Support is out there.

Learn more about the AARP Fraud Watch Network and their programs at aarp.org/fraudwatchnetwork. They have lots of great articles, a Resource Center, and a scam tracking map. They also produce the podcast The Perfect Game, which looks at victim impact and the criminals getting away with it.

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