In 2023, 16,806 Americans aged 60 and older reported falling victim to scams, collectively losing a staggering $1,648,455,748, according to the Internet Crime Complaint Center. Unfortunately, all these scams had one common factor: cryptocurrencies.
While cryptocurrency was once hailed as the future of finance, the FBI reported over 69,000 complaints related to digital currency scams in 2023, costing victims across all age groups a total of $5.6 billion.
Why Are Older Adults at Risk?
The complexity of digital currencies, coupled with increasing interest in new investment opportunities, makes crypto scams easy to perpetrate. Unfortunately, older adults, who often can’t afford to lose retirement savings, are particularly vulnerable.
Common Cryptocurrency Scams
According to an FBI report, these are some of the most common types of crypto fraud:
Fraudulent Investments: The largest cause of losses, resulting in over $3.96 billion in damages.
Phishing and Spoofing: Cost victims approximately $9.6 million.
Fraudulent investments, such as fake initial coin offerings (ICOs) or bogus digital wallets, are especially common. Victims may be misled into buying worthless currencies or unknowingly give criminals access to their digital wallets.
Phishing and spoofing scams involve tricking people into sharing personal or financial information, often by pretending to be legitimate companies.
How Older Adults Can Protect Themselves
To avoid falling victim to crypto scams, retirees can implement the following strategies:
Do Independent Research: Don’t rely on celebrity endorsements or aggressive sales tactics.
Watch for Red Flags: If an investment sounds too good to be true, it probably is.
Avoid Impulsive Decisions: Don’t rush into purchasing cryptocurrency due to fear of missing out (FOMO).
Choose Reputable Companies: Only invest through well-established companies, and consider sticking with well-known cryptocurrencies like Bitcoin.
Protect Personal Information: Never give out personal or financial details over email or phone. Always verify the legitimacy of a company by contacting them directly through official channels.
Consider Caution or Avoidance
Older adults, especially those on fixed incomes, may want to avoid the volatile crypto market altogether. For most retirees, investing in stable, proven assets like the U.S. stock market might be a safer and more reliable approach.
Final Thoughts
Crypto scams are a serious threat, particularly to older Americans. By staying informed, practicing caution, and sticking with reputable investment strategies, retirees can better protect their hard-earned savings.