Antitrust Law Daily Wrap Up, CONSUMER PROTECTION NEWS: FTC issues report detailing work to protect older Americans, (Oct 21, 2024)

By Peter Reap, J.D., LL.M.

Older adults reported losing over $1.9 billion to fraud in 2023, only a small fraction compared to the amount that went unreported.

The FTC has issued an annual report highlighting key trends based on fraud reports by older adults, and the FTC’s multipronged efforts to combat the problem through law enforcement actions, rulemaking, and outreach and education programs. The report, Protecting Older Consumers, 2023-2024, A Report of the Federal Trade Commission, also outlines a number of actions taken by the FTC-led Scams Against Older Adults Advisory Group, which was created as a result of 2022’s Stop Senior Scams Act. The report refers to persons 60 and older when using the terms “older adults” or “older consumers” to be consistent with the requirements of the Elder Abuse Prevention and Prosecution Act.

According to the findings, older adults reported losing more than $1.9 billion to fraud in 2023. Because the vast majority of frauds are not reported, this figure represents only a fraction of the overall cost of fraud to older consumers in 2023, which the FTC estimates may be as high as $61.5 billion.

Older adults report losing more money, $538 million—a 34% increase over 2022, to investment scams caused than any other type of fraud, followed by business imposters at $311 million (up 16% from 2022), and romance scams at $277 million (up 16% from 2022). Although adults aged 60 and over were less likely to report losing money to fraud than younger adults, adults over 60 often reported losing substantially more than younger adults. Consumers 80 and older reported losing a median of $1,450 to fraud, while those in their seventies reported a median loss of $804. The number of older adults reporting losses of $100,000 or more has increased more than threefold since 2020.

The FTC’s four-fold approach. Protecting older adults is one of the FTC’s primary objectives, and it uses several approaches. First, the FTC brings enforcement actions to stop unlawful practices and, when possible, returns money to consumers. This year, the FTC has brought enforcement actions regarding schemes involving money-making opportunities, cash advance scams, deceptive claims about COVID-19 prevention and other home goods, debt relief, tech support services, and illegal robocalls, among others. The newly released report highlights eight enforcement actions filed within the last fiscal year in which the Commission noted a significant impact on older adults. It also describes other agency actions that affected older consumers, including case resolutions, consumer refunds, and criminal actions brought by other agencies relating to FTC matters or pursued with FTC assistance.

The FTC’s enforcement efforts in this last fiscal year resulted in relief of more than $267 million to consumers of all ages. The FTC has also conducted rulemakings intended to increase its ability to obtain monetary relief for consumers, including older adults.

Second, the FTC continues to spearhead as well as participate in forward-thinking education and outreach directed at older adults nationwide. The FTC’s ongoing efforts serve to alert older adults to common types of fraud and to provide them with resources to avoid such fraud. Third, in its work to protect older adults the FTC collaborates with a wide variety of partners, including government, academia, AARP, industry, military family and veterans service organizations, and other older adult advocates. The FTC applies the information and analyses obtained from these efforts to develop strategic initiatives on how to best address issues older adults face.

Fourth, recognizing the benefits and threats posed by artificial intelligence to all consumers, including older adults, the FTC successfully held a voice cloning challenge to promote the development of ideas to protect consumers of all ages from the misuse of artificial intelligence-enabled voice cloning and other harms.

Scams Against Older Adults Advisory Group actions. The Scams Against Older Adults Advisory Group (“Advisory Group”) is comprised of twenty-one representatives from government, industry, and consumer advocacy groups. It held its first public meeting on September 29, 2022,101 where it launched four committees to address fraud impacting older adults. These committees have focused on: 1) expanding consumer education and outreach efforts; 2) improving industry training on scam prevention; 3) identifying innovative or high-tech methods to detect and stop scams; and 4) reviewing research on effective consumer messaging to prevent scams.

The group’s consumer education committee implemented multiple consumer education pilot programs, and experimented with new materials, partnerships, or communication channels to provide more effective education on scams to older adults. The industry training committee reviewed current training methods and identified best practices and gaps that exist across industries on how employees are trained to stop and prevent fraud. The technology and new methods committee established multiple working groups addressing issues from ways to better help recover funds lost by consumers to scammers, particularly through bank transfers, as well as ways to reduce fraud in the gift card system and in text messaging. The group’s research committee presented findings from a review of research across academic literature on effective scam prevention messaging.

The Scams Against Older Adults deliverables are available to the public at ftc.gov/olderadults.

Levine comments. "Through our cases, rulemaking, and outreach, we’re taking every step we can to stop scams targeting older adults and help them protect themselves,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “This report highlights that work and the key actions of the working group formed under the Stop Senior Scams Act.”

News: ConsumerProtection FederalTradeCommissionNews