A task force committed to assisting senior and vulnerable investors

Elder fraud is on the rise. According to the FBI Internet Crime Complaint Center’s Elder Fraud Report, over $3.4 billion were lost due to elder fraud in 2023, an 11% increase from 2022, and an average loss of $33,915 per victim.

Protecting clients is a top priority, that’s why Schwab has a team dedicated to helping senior and vulnerable investor clients. Casey, an employee of over 29 years, has spent the last six years as a member of Schwab’s Senior and Vulnerable Investor Investigations Team. In light of the recent statistics impacting this group of customers, we asked him what Schwab is doing to help curb elder fraud and what investors can do to protect themselves.

We are a team dedicated to investigating financial exploitation of clients aged 60-plus, or those with severe diminished financial capacity that affects their ability to manage money and makes them more vulnerable to fraud and financial abuse. Unfortunately, that means we primarily assist seniors who have fallen victim to scams or are being taken advantage of by family members or caregivers.

Everyone at Schwab is trained to identify potential fraud during client interactions and can submit an incident report if they notice red flags suggesting possible exploitation within this context. For example, a financial consultant may notice their 80-year-old client, who has only taken an RMD (retired minimum distribution) for the last five years, begins requesting wire transfers to foreign countries for reasons that don’t appear to make sense based on the financial consultant’s understanding of the client’s circumstances. We don’t assume every senior fits a mold, but patterns like this can be a red flag that is filed and sent to our team to investigate. 

The first thing we do is reach out to the client for a general discussion about recent activity. It’s a simple fact-finding mission. I might say, ‘I see you are sending out a $30k wire. Can you tell me what it is for?’ The client may tell me he’s decided he wants to invest in crypto. Well, that could be legitimate, but scammers anticipate these questions and coach their victims with prepared stories. So, I dig deeper.  ‘What platform are you using to trade crypto?’ If the client starts getting flustered or I hear conflicting stories, that’s when I start suspecting fraud. At that point, I have more direct conversations about what is actually going on, how to protect their money, and how to contact law enforcement.

Achieving that balance is a recognized challenge, and, for the client, can be an emotional rollercoaster. At first, clients can be defensive, embarrassed, or even ashamed. Many scams involve romantic manipulation, and we have to approach these conversations with sensitivity. Often, scammers instruct victims to say, ‘It is my money, and I get to do what I want with it.’ While that’s true, if I have identified a scam—even if the client doesn’t believe it yet—I have to explain that, due to financial regulations, we need more details because we can’t knowingly send money to criminal enterprises. 

I reassure them that I am on their side, and that this is just a fact-finding mission. But our team is highly skilled at recognizing scams, and I always remind clients that these criminals do not discriminate—they are equal opportunity thieves. Falling victim to a scam doesn’t mean you’re foolish, and there’s no reason to be ashamed.

We are trying to take a proactive approach by doing a couple of things. First, we are partnering with our Financial Crimes Awareness Team to educate clients on emerging scams and fraud tactics, including creating digital content on schwab.com/schwabsafe to keep them informed.

Second, we are providing training to our client-facing representatives—teaching them to recognize fraud and feel confident discussing preventive measures like setting up a trusted contact or power of attorney when a client clearly needs extra support.

By the time a case reaches our team, the damage is often already done. Our goal is to intervene earlier—empowering both clients and employees to spot red flags before fraud occurs. 

One of the simplest and most effective steps is adding a trusted contact to your account. If your financial institution detects suspicious activity, they will have somebody to reach out to—potentially preventing further harm.

Another critical rule: never share your password. No legitimate financial institution will ever ask for your password. And strengthen your security by setting up a verbal password and two-factor authentication for added protection whenever possible.

If someone does contact you unexpectedly, whether by text message, a phone call, or email, approach the situation with a healthy level of skepticism. Scammers rely on urgency to manipulate you. If someone claims your grandchild is in jail and needs money, pause. Call your grandchild, or your financial consultant before taking any action. Scammers use a playbook that leverages your emotions, so take the time to run the urgent scenario by someone you trust first.

Finally, don’t assume you or your loved ones are immune to scams. We all have vulnerabilities, and fraud tactics are constantly evolving. And if you do fall victim to a scam, tell others about it. The more we expose these schemes, the harder we make it for scammers to succeed. That’s how we stop them—by exposing their tactics.