Elder Financial Abuse
How to Recognize and Prevent It
With the increasing number of aging baby boomers comes a corresponding increase in their financial abuse. Many elders are lonely, infirm and trusting — and they hold 70 percent of the nation’s wealth, all of which can make them easy targets. Findings from The True Link Report on Elder Financial Abuse 2015 reveal that an astounding $36.48 billion is lost annually to fraud against older Americans.
Moreover, National Adult Protection Services reports that family and trusted others make up 90 percent of elder financial abuse perpetrators. As seniors age, the amount of in-home traffic outside the family increases as more people are recruited to meet an elder’s daily living needs. For these reasons and more, seniors are a vulnerable demographic for financial fraud by both family members and professional con artists. Abuse of trust is common because greed does not discriminate.
Read on to understand how to recognize financial exploitation, respond to and prevent it.
1. Recognizing Fraud: Different Forms of Financial Abuse
Elder financial fraud is a complex issue that takes various forms. To keep things simple, the True Link report categorizes it into three areas: exploitation, criminal fraud and trust abuse.
I. Financial Exploitation occurs when businesses and individuals deliberately mislead or apply pressure to secure consent from seniors for otherwise imprudent business transactions.
II. Criminal Fraud occurs when professional con artists and scammers misrepresent themselves. This includes telemarketers who pose as bogus companies and others who fabricate stories to convince people to give them money. Some notorious examples are the grandparent scam, identity theft and Nigerian prince scam.
III. Caregiver Abuse occurs when family, friends or paid caregivers use their position of trust to take money or assets from the elderly. Common examples include rewriting wills and changing power of attorney, using the senior’s credit cards, and the unauthorized use, transfer and sale of assets hoping the senior will not notice.
2. Signs of Elder Fraud: Red Flags
If your elder suddenly begins acting intimidated and afraid of a trusted person, be on the alert. If you notice significant account activity that cannot be explained, blank checks made to cash, or sudden suspicious openings of joint accounts or joint credit cards with a family member or “new friend,” these may be indications of financial fraud.
3. Ways to Mitigate Risks of Elder Financial Abuse
- Do not be afraid to ask lots of questions during a sales pitch.
- If something sounds too good to be true, then it probably is!
- Screen caregivers thoroughly.
- Do not pay in full for any contracted work that has not been performed.
- Add your telephone number to the Do Not Call List.
- Appoint a trusted person to become power of attorney long before you or your elder reaches a state of cognitive impairment.
4. How to Respond to Elder Financial Abuse
Elder financial fraud is criminal and should be reported immediately. According to a CNBC 2016 article, former head of the Elder Abuse Unit in the Manhattan district attorney’s office, Liz Loewy, says many cases are unreported because the victim is too embarrassed or afraid to admit abuse. And because of cognitive decline, the elder may be unaware that fraud is even taking place.
Moreover, when family members and trusted individuals are the perpetrators, the situation becomes further complicated. While there is no one solution that prevents elder financial abuse, responsible family members and trusted individuals should work together to prevent the elder from having isolated financial interactions with a single individual.
In addition to contacting the police, filing a complaint with the state’s attorney general office will open a legal investigation and build a case against the abuser. The National Center for Elder Abuse urges victims of elder fraud to report to the local state Adult Protection Services because APS caseworkers are first responders to elderly abuse reports.
Contact your bank right away if fraud is suspected. The American Bankers Association has launched a community outreach program called Safe Banking for Seniors; the program urges financial institutions to file a Suspicious Activity Report to help stop fraudsters in their tracks.
Through education and awareness, it is possible to safeguard against financial exploitation. For more information on this topic, visit http://www.napsa-now.org/get-informed/what-is-financial-exploitation/.