The FBI has termed it a “distress scam,” often referred to as grandparent fraud. This scheme deceives older adults into believing that their grandchildren are in dire situations and require immediate financial assistance, sometimes before scheduled court appearances or legal deadlines. Reports indicate that victims lost over $5 million to this type of fraud in 2025, although the FBI’s Internet Crime Complaint Center suggests these figures likely represent only a small portion of total losses.
In August 2025, the Federal Trade Commission highlighted that many rapidly growing scams targeting seniors exploit fear and urgency to cloud judgment. Scammers may claim that a person’s bank account has been compromised, insisting that the individual move their money right away to safeguard it. Unfortunately, the funds aren’t transferred to a secure location; they go directly to the scammer.
AI’s Role in Fraud
The advent of AI voice cloning technology has made these fraudulent attempts even more believable. Scammers can use videos or recordings of a grandchild’s voice, then make a call that sounds alarmingly familiar, heightening the sense of urgency around the request for money. Last year, the FBI estimated that individuals over 60 lost around $352 million due to fraud linked to AI.
Targeting Vulnerable Demographics
There are specific reasons why scammers focus on grandparents. Most financial institutions require only a few key pieces of information—date of birth, the last four digits of a Social Security number, and current address—for identity verification. Many older adults in their 60s and 70s have these details readily available. A significant data breach, mentioned by Texas Attorney General Ken Paxton, compromised the information of over 25 million individuals tied to Medicaid records in early 2026, marking one of the largest breaches in U.S. history.
According to the Federal Reserve’s Consumer Finance Survey, Americans aged 65 to 74 had a median net worth of $409,900 in 2022—ten times that of adults under 35. The FBI also found that older victims in 2025 suffered loss averages of about $38,500, which is nearly double the amount seen among younger individuals who report similar crimes.
Why Seniors Don’t Report Fraud
In 2024, seniors reported fraud losses totaling $2.4 billion to the FTC, but a subsequent report suggested that actual losses could be as high as $81.5 billion. Most incidents probably go unreported, making it difficult to combat identity theft effectively. Unauthorized withdrawals from pension accounts may never get reported to banks, and suspicious new credit accounts may not come to light until victims check their credit reports, often weeks later.
Protecting Accounts
Given how quickly scammers operate, setting up protective measures beforehand can be beneficial. Such precautions allow families and financial institutions to catch potential issues sooner.
1) Use Trusted Contacts
Brokerage accounts offer a feature that many users overlook: the ability to designate trusted contacts. Under FINRA Rule 4512, brokerages must ask for trusted contact information during account updates. Trusted contacts can be relatives, attorneys, or accountants who can be contacted by the brokerage if financial exploitation is suspected. These contacts don’t have access to account details but can help watch for red flags.
2) Pause Suspicious Withdrawals
Under FINRA Rule 2165, brokerage firms can temporarily withhold payments if they suspect financial exploitation may be occurring. Currently, this hold can last up to 55 business days, although a proposal to extend this period to 145 days has been discussed.
3) Verify Emergency Requests
If someone claims that a grandchild is in urgent trouble, it’s wise to hang up and call back using a known number rather than the one provided by the caller. An FTC study found that 41% of seniors who lost substantial sums to identity theft first made contact over the phone. This emphasizes the importance of verifying stories before taking action.
4) Block Online Changes
Social Security accounts can block electronic access to account records. Once disabled, any changes to direct deposit or mailing address information must go through an SSA representative. It’s also good to know that there’s a toll-free helpline for seniors that can answer questions about securities.
The Challenge of Recovering from Identity Theft
Even with strong protections in place, some instances of fraud won’t be caught immediately. This highlights the need for identity theft monitoring and recovery services, which help families act swiftly if personal information is compromised.
Some services actively monitor online spaces for exposed personal data, helping to identify fraud and assist in the restoration of identity when necessary. These services can also offer insurance for eligible recovery costs, including legal fees.
While no service can guarantee complete protection against identity theft, family vigilance and recovery strategies can significantly reduce the timeframe for response.
Key Takeaways
Grandparents often become prime targets because culprits know how to incite panic and, ultimately, financial loss. An emergency call can lead to devastating results in an instant. To bolster defenses, it’s crucial to set up safeguards ahead of time. Implement trusted contacts, block online changes to Social Security, verify emergency requests, and maintain conversations about red flags within families. This proactive approach can help create a stronger safety net for older adults against fraud.
