Five Fraud Trends to Watch Out for in 2025
By Cameron Huddleston, Editor at Large, Carefull
February 20, 2025
If there is a lesson to be learned from 2024, it’s that protecting consumers from fraud – especially older adults – is becoming more important than ever.
Losses to fraud and scams have been staggering. A report issued by the Federal Trade Commission in October 2024 estimated that consumers of all ages lost $158 billion to fraud in the past year, and adults 60 and older lost $61.5 billion.
Many of the fraud trends in 2024 will become even more prevalent this year. Here’s what to expect in 2025 and what to do to enhance fraud protections, particularly for older adults.
Increased Shift to Social Engineering
As financial institutions invested heavily in preventing digital payment fraud, criminals bypassed those defenses in 2024 by using social engineering to manipulate consumers into sending funds or providing access to their accounts, according to The State of Fraud and Financial Crime in the U.S. 2024 report by PYMNTS Intelligence. This shift in tactics resulted in 121% more lost to scams that deceived consumers in 2024 than in 2023 in terms of the share of total dollars lost to fraud, according to the report.
The trend will likely continue in 2025 as criminals become more adept at using social engineering to manipulate consumers. Investing in advanced fraud detection technologies, such as behavioral analytics, can help financial institutions mitigate financial losses and protect consumers.
Bigger Fraud Losses
Reports of victims losing their life savings to scams grabbed the headlines in 2024. And data from the FTC show that large fraud losses are a growing trend: The number of adults 60 and older who have reported losses of $100,000 or more have tripled since 2020.
Losses will only continue to grow as scammers become even more sophisticated with social engineering tactics – that is, unless consumer education efforts improve. As Judith Bovin, who lost nearly $600,000 to a scam told Washington Post columnist Michelle Singletary, had her financial institutions been more personal and descriptive about what a scam could look like as she asked to withdraw large sums from her accounts, “maybe I would have wised up sooner.”
More Data Breaches
Massive data breaches at companies such as Change Healthcare, AT&T and Dell exposed millions of consumers’ personal information in 2024. Identity Theft Resource Center expects cybercriminals to increase efforts in 2025 to exploit software vulnerabilities by using AI.
This highlights the need for a proactive approach. Consumers who have comprehensive account, credit, and identity monitoring can be alerted to unusual activity, potential fraud and misuse of their personal information and quickly respond to limit damage.
Evolving AI Risks
AI will continue to make it easier for bad actors to take advantage of consumers with more convincing phishing emails, text messages and even voice cloning to sound like family members in need of money to get out of a bad situation. Increased consumer education about this threat will be key in limiting AI-fueled fraud.
Criminals also are expected to rely on AI more to exploit identity verification systems at financial institutions, according to CyberRisk Alliance’s SC Media. Transitioning from passwords to passkey technology – and providing resources to help less tech-savvy older adults adopt this secure solution – will help combat this threat.
Increased State Regulation
States are increasingly enacting laws directing financial institutions and broker-dealers to play a role in preventing elder fraud. More than half of the states in the U.S. now mandate the reporting of suspected elder financial exploitation by financial institutions or by all adults, and several states have pending legislation mandating reporting.
A growing number of states, including Virginia and Wisconsin, have passed legislation allowing financial institutions to let older adults provide a list of trusted contacts to be notified if exploitation is suspected. And federal and state regulators issued a joint statement in December 2024 urging financial institutions to adopt a range of strategies to combat elder fraud, including using trusted contacts.
A Market-Ready Solution to Support Elder Fraud Prevention
Partnering with a market-ready solution can be an affordable and effective way to address the growing threat of elder fraud. Carefull partners with financial institutions and wealth management firms to provide their older clients and account holders with comprehensive account, credit and identity monitoring, education, support and a secure trusted contacts system.
Carefull’s senior-specific monitoring catches changes in account holder behavior that might otherwise go unnoticed and provides alerts with action steps for dealing with issues that are being flagged. It allows users to add trusted contacts, who can be granted view-only access to accounts and receive alerts when Carefull spots unusual transactions. And Carefull’s timely articles and Scam Alerts provided to users in their Carefull dashboard keeps them aware of the latest threats.
Connect with Carefull for more information on how to combat elder fraud.
About Carefull
Carefull is a PRT (protect/retain/transfer) service for credit unions purpose-built to protect older members, retain deposits, and bridge to the next generation ahead of wealth transfer. It is the first and only digital platform designed to help credit unions protect the daily finances of seniors while assisting the adult children who often support them.