Generative AI Threatens Seniors

Declining financial ability — and overconfidence — make older adults easy targets, says a senior-victimization expert.

By Ed Prince

Financial advisors, beware. Artificial intelligence can be your new best friend, performing hours-long tasks like meeting preparation in a few minutes. But it can also be your older clients’ worst enemy. They’re also much more susceptible to cryptocurrency scams than you probably imagine.

Generative artificial intelligence is “the future of fraud,” warns Marti DeLiema, an assistant professor at the University of Minnesota School of Social Work and an expert on financial victimization. And it’s already here.

“It feels like every day, I’m seeing a new story on the news about how criminals are using AI to deceive us,” said DiLiema, while recently presenting the webinar Elder Financial Exploitation: What Aging Services Professionals Need to Know. DiLiema collaborates with financial institutions, the Federal Trade Commission, the U.S. Postal Inspection Service, and the Finra Foundation to combat the growing problem of elder financial exploitation.

AI’s voice-mimicking ability poses the biggest victimization threat, according to DiLiema.

“Criminals only need a couple of seconds of your voice or family member’s voice in order to create a very convincing AI model of your voice print,” she said.

In one recent case, a woman received a call from what sounded like her daughter, who was on a ski trip. “And the daughter said, ‘Mom, I’ve been kidnapped, I’m in trouble.’ She was crying. The mom absolutely thought it was her daughter. And then the criminals got on and demanded that she wire the money,” DiLiema said. As the woman testified at a Senate Committee on Aging hearing, she was able to reach her real daughter, revealing the voice deepfake scam. No ransom money was sent.

But many victims aren’t as quick to spot voice-deepfake scams. “It’s really convincing, and it’s being used mostly to convince us that we’re talking to someone we know like a friend or family member.”

“Pig Butchering” Added to Scammers’ Arsenal

Another more concerning new AI trend is a scam with “a horrible name,” DiLiema said. Referred to as “pig butchering” it combines two old techniques, romance and investment scams.

Anyone can produce realistic AI-generated images of non-existent people for free at, said DiLiema. She surprised the audience by revealing that her webinar “bio photo” is not real. “I don’t own that outfit,” she said. “That picture was never taken. That is an AI-generated image of me using a really simple headshot generator for, like, $14.99.”

Romance con artists and other scammers used to steal photos of real people on the internet, DiLiema says. Now there’s an endless resource of free, realistic fake images available.

A Problem with Exponential Growth

The danger of elder financial fraud and victimization is increasing as America approaches the “great wealth transfer,” the time when a record amount of wealth will pass from baby boomers to younger generations, DiLiema says. Boomers hold $78.3 trillion in assets, more than half the nation’s wealth, according to data she presented. And the Census Bureau estimates older adults will outnumber children and teenagers in 10 years, she notes.

“I’m concerned that scammers and other financial predators are going to have an eye on that wealth and are going to try to get their hands on it,” she says, “including adult children who might be motivated to try to cash in on their inheritance early.”

The annual cost of elder financial exploitation is over $28 billion, with the majority of that stolen by friends and family members, not strangers, the AARP estimates. But the real number is much higher, DiLiema says, because many seniors who have been cheated out of their money fail to report it.

Additional Reading: Any Clients Lonely? Had Life Setbacks?

Those trying to help seniors at risk of financial exploitation face challenges. One is that older adults have the right to refuse help and advice, DiLiema says. Another is their overconfidence in their financial acumen.

Targeting the Literacy-Overconfidence Gap

A survey of adults ages 60 to 90 found a steady decline in financial literacy with increasing age. Those aged 60 correctly answered 60% of financial literacy questions on the survey, while those aged 90 scored only 20%.

But the survey also asked the respondents to rate their confidence in their ability to manage money, credit, investments, and insurance. All the age groups, from 60 to 90, awarded themselves scores between 70% and 80%.

“As financial literacy — actual performance — seems to go down, confidence remains high. So, there’s this widening gap between how a person thinks that they’re doing financially or at least in their financial literacy, versus how they’re actually performing on a financial literacy quiz,” DiLiema says. “That gap is the scammers’ playing field. That’s exactly the type of person they want to target for their scam.”

Additionally, she says, “Older adults have the right to refuse intervention,” which can make it difficult for others to help them if they fail to follow advice or refuse to cooperate with investigators.

She cited the example of a man in his 90s who lived alone and was bilked out of $340,000 by a succession of four con artists. Although the first scammer was caught and convicted, police didn’t pursue subsequent cases, saying he “obviously didn’t learn his lesson.” In the end, the man lost his family home.

“We are sometimes faced with two values that are at odds,” DiLiema says. “Our value to protect people, but also our value for those people to have the right to self-determination. And that is a big challenge for adult protective services in our country.”

Crypto Quickly Becomes a Scammer Favorite

Swindlers have been adding to their toolkit of deception in recent years, DiLiema says, citing data from the Federal Trade Commission.

Government impersonation is a widely used tactic, with scammers claiming they represent the IRS, Social Security Administration, or other agencies. Another is tech support, where the caller claims they represent Microsoft or Apple or says the victim’s computer is infected with a virus and they’re there to help. Business impersonation increased dramatically during the pandemic, with many scammers claiming to represent Amazon.

Cryptocurrency is another new technology that has exploded in popularity with scammers, she says.

According to the Federal Trade Commission, most fraudulent financial transactions in 2023 (53,396) were done with credit cards, amounting to $123.4 million.

But that dollar amount is dwarfed by fraudulent transactions accomplished with ACH, or automated clearing house, bank transfers ($901.4 million, 25,707 transactions) and crypto, ($716.0 million, 23,269 transactions).

“We’re seeing those two methods of money transfer really pulling a lot of funds,” she says, noting that crypto and ACH transfers have surpassed credit cards, gift cards, and wire transfers.

“And that’s largely because so much money can go out in a single transaction with these two methods.”

“And I also want people to know because they might see this in their communities. Gas stations and corner markets, they’re starting to put Bitcoin or blockchain cryptocurrency ATMs in their places of business. And criminals are directing their victims to go to those locations and put cash in those machines, and it gets converted into cryptocurrency and then into the criminals’ virtual wallets,” DiLiema says.

“This is a really new way that that criminals are getting money from older adults in the United States.”

In a four-decade career in journalism, Ed Prince has served as an editor with many of New Jersey’s leading newspapers, including the Star-Ledger, Asbury Park Press and Home News Tribune.

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