Emerging Fraud Markets are Targeting the Elderly
Emerging Fraud Markets are Targeting the Elderly
2020's influx of new online shoppers due to the pandemic accelerated ecommerce growth, while also introducing a broader range of consumers to the online shopping world.
With the influx of new shoppers to the online world, it created more opportunities for fraudulent activity - making the rise of online shopping a convenience as well as a threat - especially for older generations.
Online Convenience Exposing Elderly Shoppers to New Threats
The surge in online shopping tested even the strongest ecommerce brands, which faced massive fulfillment issues as they responded to a growing number of online orders. And if this wasn’t enough, the amount of fraudulent activity shot through the roof. Fraudulent behaviour affects everyone online, but elderly shoppers are a primary target of fraudsters for a variety of reasons;
- The older generations may not be as well versed in navigating the digital landscape, and are more susceptible to scams and fraud patterns that would make more savvy online shoppers suspicious.
- The elderly, in particular, may not have a circle of friends and family they see or speak to regularly who could alert them to scams or act as a sounding board.
- The more socially isolated a person is, the more likely they’ll be searching online for friendship -something unscrupulous types prey upon.
- Elderly consumers typically have better credit ratings and money saved to retirement funds, making them an attractive target for identity theft and long-term scams, in general.
While fraudsters targeting more vulnerable shoppers is not necessarily a new concept, the pandemic exacerbated the problem. Online access has gone from an option to a necessity, making it both a lifeline and a destructive force for those finding themselves dependent upon it.
Elderly-focused Fraud Tactics
While elderly-focused fraud is on the rise, it’s important to note that a good number of elderly people are complicit in these crimes - and many may not fully understand the ramifications of them. They’ve been befriended by a kind stranger online who may act like they want to help, but it is far from their true motivation.
With a sense of community amongst other elderly folks and loved ones pretty much decimated, they’ve been unable to rely on traditional networks for aid. They’ve been not only physically and emotionally isolated, but have faced excessive financial burdens as well. They’ve been forced online to access necessities where they have built relationships with these “kind strangers”. These strangers (read: fraudsters) use this vulnerability to convince these elderly friends to help them out (read: turn to crime).
This should sound shocking as it’s not what we expect from grandma and grandpa in their golden years, but time, opportunity, and lack thereof all play a part here. It’s often a long con that takes time to build. They are initially made to feel emotionally connected and trusting of these fraudsters. Grandpa really doesn’t see the harm in helping Fraudster Frank ‘reship’ some things for a percentage of the sale. He’s a good guy who chats with him every day and this is a way to make some money . . . until it isn’t.
Elderly people are seeking a secondary income and they often have little understanding of what the ecommerce process is really like. Reshipping does bring in some cash for them - until they get caught and are left holding the bag.
Reshipping Fraud Moves Fast
As the United States Post Office shares, “reshipping fraud” is a relatively new scheme led by criminals operating primarily from Eastern European countries and Nigeria. They “reship” illegally obtained products.
These items are purchased with stolen credit cards and sent to whomever (in this case, it is the elderly co-conspirator duped into participating). The fraudsters choose real people for the initial purchase rather than drop-shipping addresses because it gives validity to the purchase. Having a drop shipping address is easy to identify as fraud. But when you have legitimate people who have public records and are able to confirm they live in these addresses, it gets really hard to tell if they are getting scammed or not.
The purchased items, once delivered to the elderly recipient, are then reshipped by these folks who often don’t realize the severity of the crime, nor do they consider that they are the ones whose address is being used to perpetuate the fraud. All they know is that they receive items, repackage them, and then ship them off to parts unknown for a small fee. Oftentimes, those fees aren’t even paid to them, so they’re committing fraud for free.
So, what can merchants do to combat these crimes?
How Merchants Can Help Elderly Customers - and Themselves
When the data is available, specifically for those merchants who sell age-specific items, having an additional layer of verification in place for those older than 50 or 60 couldn’t hurt. For most merchants though, those who aren’t capturing this demographic data, it’s important to be aware of data points that can aid merchants in identifying patterns and uncovering specific items or activities being targeted by fraudsters. Monitoring regular purchase patterns helps merchants flag anything out of the ordinary and head off some of this fraud.
Also, offering tips to consumers around the perils and dangers of reshipping fraud isn’t a bad idea either. Most companies send mailings to customers for sales and offers anyway, so why not include additional informational pieces on topics such as How to Protect Yourself From Identity Theft, Ways Fraudsters Fool You, and how Reshipping Items for Someone Else is Fraud. The upside here is that consumers will appreciate the warnings and view it as you looking out for them. It may just help someone think twice about participating in reshipping fraud, which really is beneficial to both you and the consumer.
Other forms of elderly fraud are on the rise as well, of course. There will always be unscrupulous catfish types and identity theft, but this kind - the type that elderly are being duped into participating in - is one where merchants can step in and make a real change.
Reach out and we can offer additional ideas to help you keep clientele of every age bracket informed about fraud, as there are tactics directed toward everyone online these days. Get your payment processing house up to speed with the latest protections!