Credit: AARP

A fast-growing fraud industry is stealing billions of dollars from U.S. consumers every year. The impact is profound, particularly when victims are older adults who are at a time in their lives when they are least able to recover financially.

Dawn, from Savage, Minnesota, was afraid that her computer had caught a virus and contacted what she thought was a legitimate repair service. After giving the “IT specialist” online access to her computer, she was instructed to accept a $200 refund for service. However, the scammer changed the amount to $20,000 and then pressured her to fix the error by withdrawing the difference from her bank. Dawn’s bank flagged the scam before the transfer occurred, but she learned that others in the same situation were not as fortunate. 

Today’s fraud criminal takes great advantage of faster and newer ways to move money. Knowing about the financial tools they employ can help you recognize a scam attempt in process and disengage before the criminal’s payday.

How it works:

  • Every fraud criminal is out to steal money (or sensitive information, which leads to money).
  • A common scenario starts with an unexpected and urgent communication that yields a heightened emotional response in the target. The criminals’ playbook tells them it’s hard for the target to employ logic when their brain is emotionally hijacked.
  • After this opening, the criminal seeks their payday, often taking advantage of payment methods that are quick or that their target may not fully understand.

What you should know:

  • Based on federal data from the first three months of 2024, the majority of theft happened through cryptocurrency and bank transfers ($830 million, and we know that’s a vast undercount).
  • Criminals employ crypto in bogus investment schemes and as a means of payment to address a fake issue — directing the target to withdraw large amounts of cash from their bank and deposit it into crypto ATM machines, which are popping up everywhere.
  • Theft through bank transfer occurs when an account holder is fraudulently induced to initiate a funds transfer (for a bogus investment or to “protect” money from a hacked account) or when the account holder’s bank credentials have been stolen and used to access and drain the account.
  • Other common ways of stealing money include convincing a target they can buy a gift card and share the numbers to pay some obligation (untrue); using peer-to-peer payment apps such as Zelle, Cash App and Venmo to buy something that doesn’t exist; or hacking accounts through a fake email or text and draining them of funds.

What you should do:

  • If you receive a communication out of the blue that causes a strong emotional reaction, take a pause, knowing this is the way most fraud attempts begin.
  • Disengage and connect with the entity in a way you know to be legitimate: Sign in to an account via app or website, or call using a number on a paper statement. If the communication is purportedly from a loved one, disengage and contact them directly.
  • Refuse to use the methods criminals use to steal: cryptocurrency, bank money transfers, gift cards and peer-to-peer apps.
Dawn Patton Credit: AARP Minnesota

There are few viable options for recovering money lost to scams. AARP Minnesota is pushing for a state-level Consumer Fraud Restitution Fund to help victims recover their losses.

Under the proposed Consumer Fraud Restitution Fund bill Fund (SF 447, Rest; Carlson; Koran; Klein; Dornink | HF 1392, Lee K.; Freiberg; Kozlowski; Mueller; Roach), excess funds from Minnesota civil penalty payments in consumer fraud enforcement cases would be directed to a new restitution fund rather than the state’s general fund. To be eligible for this fund, the Minnesota Attorney General would bring a public enforcement action against a defendant based on an investigation establishing that the person was defrauded.

Public civil law enforcement tools in Minnesota are insufficient to stop scam operations. A Consumer Fraud Restitution Fund would:

  • Motivate the Attorney General to sue scammers and help victims recover their money
  • Encourage scam victims to report crimes.
  • Use penalty money from big company bad actors to pay back victims who can’t recover their losses otherwise.

AARP is dedicated to fighting fraud by educating the public about current trends, advocating for stronger consumer protections, and enforcing laws. The AARP Fraud Watch Network™ offers free information, tools, and tips to help you safeguard your hard-earned money from fraud and scams. Remember, if you’ve been targeted by scams or fraud, you are not alone.

Credit: AARP Minnesota

To learn more and get involved, go to aarp.org/MNfraud.

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