Congress Concerned about Fraud Schemes Targeting Seniors

Beyond the Numbers

Thursday, April 5, 2018
Posted by: 
The Communications Division

To Rita Shiman, the voice on the phone sounded just like her grandson, Kabo.

About three years ago, a person called Rita and claimed to be Kabo, an adopted native of Botswana.  The caller said he was arrested in Atlanta and needed bail money. He drove to Georgia from Maryland, he said, to attend the funeral of a college classmate. Now, Kabo was being held in a county jail and was assigned a public defender who promised Kabo’s release after he paid a $1,230 bond.

Soon after, the supposed public defender called Rita and said the transaction had to be in cash and sent via Western Union to a contact in the Dominican Republic. The judge would release Kabo after receiving payment.

“This statement alone should have raised a red flag, but we were so caught up in the moment that we were simply acting on autopilot,” Rita and Stephen Shiman said.

They sent the payment, but the whole situation left them feeling unsettled. They soon called their son’s house, and their grandson Kabo picked up the phone—he was never in Georgia in the first place.  

The Shimans were victims of a fraud scheme, and their money was gone.

The couple told their story during a Senate Special Committee on Aging hearing on stopping senior scams on March 7. The hearing focused on emerging financial-exploitation schemes, and the need to educate seniors and their families and caregivers about these threats. Committee Chairman Susan Collins said “the stakes are extremely high,” citing a recent report from the Government Accountability Office that found that seniors lose nearly $2.9 billion a year to financial-exploitation schemes.

Imposter Schemes an Ongoing Threat

The OIG has warned citizens about government imposter scams over the past year, including SSA and OIG impersonation schemes. In January, Acting Inspector General Gale Stallworth Stone alerted the public about ongoing SSA employee impersonation schemes; the Federal Trade Commission (FTC) similarly reported an increase in complaints from the public about suspicious phone calls from people claiming to be SSA employees.

The FTC also recently released its Consumer Sentinel Network Data Book for 2017. Through the Consumer Sentinel Network, the FTC collects allegations from the public and makes allegation information available to law enforcement to assist investigations. The Data Book included several noteworthy items on imposter-scam allegations in 2017: 

  • Imposter scams were the No. 3 most-reported allegation to the FTC, behind debt-collection and identity theft scams.
  • The FTC collected 348,000 total imposter-scam reports.
  • $328 million was lost to imposter scams; 1 in 5 people who reported being involved in an imposter scam reported a monetary loss.
  • Scams include people falsely claiming to be with the government, as the OIG has reported.
  • The most common method of contact for imposter scams is by phone, and victims are typically encouraged to send funds via wire transfer. 

Joint Effort to Protect Seniors

After hearing the Shimans’ story, Committee Ranking Member Bob Casey said Congress should ensure that law enforcement has the necessary resources to punish fraudsters and organizations that knowingly allow fraudsters to receive payments. Casey and Committee members said they would consider legislation that would increase penalties for these types of fraud schemes.

Casey also said that alerting and educating citizens is critical, but law enforcement, consumer-protection groups, and financial institutions also play vital roles in combating schemes that target and affect seniors.

“Helping older Americans protect themselves and their hard-earned savings is the least we can do,” Casey said. “The responsibility to protect oneself from a scammer should not sit solely with our aging loved ones.”

For tips to protect yourself and your family members from schemes, current fraud advisories, and information on reporting schemes, please visit the OIG’s Scam Awareness page.