Financial abuse against the elderly is real and costly. Some estimates put the total loss at $37 billion each year. While many abuses are instigated by strangers who prey on society’s most vulnerable, plenty of losses are caused by people the victim trusted. Few cases are documented, however. Victims may be embarrassed about having fallen for a scam, unaware that they’ve been swindled or reluctant to take a stand against someone they know or care about.
Reasons why seniors fall victim to abuse vary, but some common ones include:
– Not technically savvy. An older person may be more likely to fall for an internet scam, clicking on a suspicious link or failing to check for a secure web address before entering personal information.
– Trusting. Not everyone is immediately suspicious of a request for money from someone claiming to represent an official-sounding entity or even a family member.
– Emotionally vulnerable. It’s natural to want to help and support family members and hard to figure out that there is no real need. Some seniors are intimidated by younger relatives who make financial demands.
– Available. Seniors make attractive targets because they are more likely to have a nest egg saved, own their home and have good credit.
Seniors tend to be lonelier and needier for attention and interaction than younger adults who still drive, work or engage in social activities, leaving them more vulnerable to scams. Furthermore, if the money manager in a relationship dies, the surviving partner may not know how to recognize a financial scam when it comes along.
Types of Financial Abuse
Elder financial abuse is a broad umbrella that includes any illegal or improper use of an older person’s assets. According to research from True Link Financial, the three main classes of elder financial abuse are:
1. Exploitation. Legal but deceptive financial practices designed to confuse and pressure seniors in order to hustle them out of money via bad deals.
2. Fraud. Illegal scams, including thieves masquerading as a grandchild or other relative who needs an immediate supply of emergency cash.
3. Caregiver abuse. Possibly the most reprehensible is the swindling of money by the very people who are meant to look out for the best interests of the senior. Average losses caused by caregiver abuse run far higher than those caused by strangers.
Financial abuse can take almost any form. Here are just a few examples:
– Telephone scams. Every hustle under the sun has been attempted by phone. Callers offer free help to avoid foreclosure, a wonderful prize or vacation, a promise to feed starving children or help others in need, or other noble causes with no foundation in reality.
– Presentations. Free lunch seminars or presentations that offer a free weekend vacation in exchange for attendance are often high-pressure sales pitches that are very, very hard to walk away from.
– Gifts to self. Caregivers and relatives help themselves to cash, jewelry, artwork and other assets, either nefariously or because they feel they have a right to.
– Healthcare fraud. Unneeded medical supplies and treatment are provided, and insurance billed. Fraudulent bills are submitted for services never rendered. Prescription drugs turn out to be counterfeit.
– Funeral fraud. Premium services are misrepresented as basic or required, including embalming or a casket.
– Breach of trust. Some seniors sign the deed to their house over to a relative in order to help that person avoid estate taxes after the senior dies. The relative evicts the senior and moves in or sells the home.
Reporting rates are low. Victims may not realize they’ve been scammed. They may fear reprisal or further abuse for taking a stand or making a report. Some are reluctant to admit being victimized for fear that the family will conclude that they are incompetent to handle their own affairs. If paperwork is already signed, the victim may feel there is no way to undo the damage done. If time has elapsed since the fraud, the victim may have trouble remembering the details. A senior might not know where or to whom to make a report.
Protecting Aging Parents
Hire help. Your loved one should enlist the services of a qualified financial advisor to make a plan for all assets, including retirement accounts, will, power of attorney and medical directives. A trust can limit relatives’ access to money. If the senior can’t or doesn’t want to handle daily bill paying, the task should be delegated to a trusted person, but controls must be in place to prevent inappropriate spending.
Legal documents can have safeguards built in, too. According to Consumer Reports, a power of attorney can be drawn up with limits for no additional cost. A third person can monitor the one who holds power of attorney, or two signatures can be required on every check, for example. Consider appointing a family member to attend financial planning meetings with the senior and help implement safeguards.
Communicate. Talk about common scams and basic strategies for keeping safe. Help your loved one learn to never give out personal information over the phone unless they’ve initiated a call to a trusted party. Any respectable charity will offer the option of donating by mail, so there’s no need to succumb to pressure to give a credit card number on the spot.
If your senior has already been targeted and a phone number is available, try to reach the salesman and ask him to stop calling. Get on the Do Not Call list. Cancel the senior’s landline telephone service in favor of cell phone service only, to cut down on random telemarketing calls and remove the senior from active white pages listings.
Have an open discussion with family about who will be responsible for the senior’s care and whether they’ll be paid and if so, how much.
Use security measures. Run a background check on hired help. Lock away personal papers. Use a mailbox that locks. Shred documents. Password computers. Maybe even install a home camera system.
Contact an advocacy organization. The National Center on Elder Abuse can connect you to abuse prevention resources in all 50 states.
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More on Identity Theft from Credit Sesame:
How to Check Your Child’s Credit Report
How Do You Know If Your Identity Has Been Stolen?
5 Steps to Take Immediately If You’ve Been a Victim of Identity Theft
How to Protect Yourself in the Age of Data Breaches
10 Things We Need to Fix to Slow Down the March of Identity Theft
