We all know that seniors are likely to be victims of various financial abuse scams. What we don’t know is how big of a problem elder financial exploitation is. Without national data, it is hard to determine the scope of the issue. Various studies have shown conflicting statistics regarding elder financial exploitation.
If elder financial abuse is such a growing and common problem, where are the resources to recognize and curb this kind of abuse? What effect is elder financial exploitation having on our seniors? How can we protect our elders and prosecute the abusers?
Conflicting Financial Abuse Statistics
When it comes to elder financial exploitation, the first issue is that we don’t have a grasp of how large (or small) the problem may be. Without having accurate information about the scope of the fraud, it is hard to find solutions. Multiple studies have resulted in multiple conclusions.
One study, conducted in 2010, found that 20 percent of Americans aged 65 and older have been victimized by a financial scam. According to MetLife, these financial abuses are costing seniors an average of about $2.9 billion annually. Other studies have estimated that elder financial exploitation actually costs older Americans more than $36 billion annually.
Even still, there are researchers that have conducted studies and have come to the conclusion that consumer fraud is actually less prevalent among seniors. Many people do not accept the results of this study because seniors do not typically report financial abuse due to shame and embarrassment.
The New York State Elder Abuse Prevalence study found that only 1 in 44 cases is ever reported. Furthermore, how do you take into account the seniors with cognitive impairment that don’t even know they have been victimized? How do we count the seniors with dementia that “consented” or “gifted away” their assets?
Types of Elder Financial Abuse
We hear about elder financial abuse and the schemes that some seniors succumb to, but how well can we recognize all the different kinds of abuse? Many times, elder abuse involves a trusted person in the senior’s life but family members and caretakers are not the only ones that may commit abuse. Professionals and strangers can also victimize elders to exploit them financially.
Let’s look at the different types of ways that seniors may be exploited financially depending on who is doing the scamming.
Financial Scams by Family Members
Here are some of the ways that family members, friends, and other closely trusted persons could take financial advantage of a vulnerable adult:
- Using a Power of Attorney. Though the victim grants authority, the perpetrator will then use their new authority to steal the senior’s money.
- Using joint bank accounts. The abuser will again use their trust to handle finances to instead funnel money from the senior for their own use.
- Using victim’s ATM card. Using a senior’s ATM (or cashing checks) to steal money from them, even if there was a legitimate need to withdraw cash for the senior.
- The threat of Abuse. Sometimes family members or caregiver will threaten to abandon, hit, or harm a senior victim if the elder does not give them what they want.
- Medical Neglect. This happens when an abuser refuses to get their senior the medication or care they need so that they can keep the assets or money that would be spent on those services. This could also include taking medications from the senior to sell illegally to make money.
- Overcharging for Services. In-home care providers may overcharge for services or not provided the services they should.
Elder Financial Exploitation by Professionals
There are many different ways that professionals may take advantage of a senior financially. A stranger could also conduct many of these scams, but I wanted to point out professionals your senior may trust that could take advantage of them. Here’s a list of a couple of schemes to look for:
- Predatory lending. Pressuring a vulnerable senior to take out loans that do not need or cannot afford.
- Investment/securities schemes. Any type of pyramid scheme or investment where unrealistic returns are promised; dealer is not licensed.
- Internet phishing. Sending fraudulent emails “from” reputable sources in order to get victims to reveal personal information that is used to take advantage of them.
- Identity Theft. Opening up fraudulent credit cards in the name of a senior unknowingly. This could also include coercing a cognitive-impaired senior to “give” you a credit card or open a line of credit for you.
- Medicare scams. We hear of Medicare scams in the news often, but abuse is typically carried out by doctors, practitioners, or insurers that take advantage of Medicare policy loopholes.
Elder Financial Scams by Strangers
Strangers can easily take advantage of older Americans. There are many different scams they may try to get money from your senior. Professionals also conduct many of these schemes.
- Lottery/sweepstakes. These scams usually come in the form of an email telling a senior they have won some sort of prize for a contest that didn’t enter. The email sender will tell the senior to send a specific amount of money to cover the taxes, and they will send the rest of the money.
- Grandparent scam. This is when a senior receives a phone call that their grandchild is in trouble or sick. The caller will tell the seniors that the child needs money immediately.
- Charity scams. We see these, especially after disasters. Abusers will ask for donations for good causes but the money is kept for themselves.
- Utility company schemes. In this sort of scam, a person will show up to your senior’s door saying they are from the utility company and they need the senior to come outside so they can show them something. Meanwhile, the abuser will have an accomplice that goes in the home and steals valuables while the senior is outside.
The Other Costs of Elder Financial Exploitation
The effects of financial abuse on an elder go beyond stolen or missing money. Seniors can experience great emotional distress after being financially abused. Here is a list of some of the devastating emotional effects:
- Loss of trust in others
- Loss of sense of security
- Depression
- Feelings of fear, shame, guilt, anger, self-doubt or worthlessness
- Inability to replace lost assets by working
- Inability to hire attorney to pursue legal action
- Loss of primary residence
Addressing the Financial Exploitation of Seniors
It is hard to address an issue when you don’t understand the brevity or complexity of the situation. This is why curbing the financial exploitation of seniors is proving to be a difficult task. We know that if we suspect that a senior is being abused, financially or otherwise, we should report it so they can get help. But what is the government doing to help protect vulnerable aging seniors?
In 2015, The White House Conference of Aging made elder justice one of its main four focal tracks. Government agencies teamed up to gather data on a national level and create materials and resources for professionals and family members. The government organizations involved are the Elder Justice Coordinating Council, the Department of Justice, the Health and Human Service’s Administration for Community Living, and the Consumer Financial Protection Bureau’s Office for Older Americans.
The DOJ has introduced the Elder Justice website, which is a one-stop-shop for victims, families, researchers, prosecutors, and practitioners to learn about elder abuse. There are many resources available on the site including training modules to help lawyers recognize and address financial exploitation.
There is also information available for law enforcement, which is incredibly important since police are not trained to recognize, prevent, or deal with the complexity of elder financial exploitation cases.
Hopefully, in the near future, we will see more research regarding elder financial abuse, as well as more funding for elder fraud prevention resources and programs. It will take a concerted effort from all of us – prosecutors, caregivers, family members, detectives, and victims – to curb financial abuse. I hope we all make the effort sooner than later.
