In today’s world, everyone should take special care to protect their sensitive information and safeguard their assets. It seems pretty obvious to most people, but there is a large portion of the US population that are often more vulnerable. In 2010, our elderly population had grown to 13% and each day approximately 10,000 Americans reach the age of 65.1,2
Elder abuse can take many forms, including but not limited to physical, emotional, passive neglect, and increasing in prevalence is financial exploit. Financial exploitation is the fraudulent or otherwise illegal or improper act or process of an individual that uses the resources of a senior citizen for monetary or personal benefit, profit, or gain. It may result in depriving senior citizens of rightful access or use of their resources or assets.3
It has been estimated that cumulative associated costs to the victims that report financial fraud can range to a height of $36.5 billion a year lost due to elder financial fraud according to the National Council on Aging. Even with that shocking number, you may not have heard much about the subject. This occurs largely because the crimes often go unreported.
Only 1 in 44 cases of elder financial abuse is reported.4 Seniors may not come forward due to several factors. Most commonly a feeling of embarrassment, shame, or concern that they will be judged. Additionally, they may fear that their family will force them to give up privileges or restrict their abilities once they disclose that they have been victimized.
Far too often the senior will be hesitant to come forward because the perpetrator is a family member and they do not want that loved one to get in trouble. Family, friends, and caregivers commit nearly 81% of financial fraud perpetrated against elders in Arizona and 67% of elder financial fraud in New York.5
In addition to those who are close to the victim, there are plenty of other potential scammers looking for targets and new ways to extract wealth from unsuspecting retirees. The process can often begin with something as simple as a phone book search and a caller impersonating a representative of Medicare or the IRS. Perhaps, they claim to be an estranged relative who has fallen on hard times. Sometimes, they claim to be affiliated with a charity or bill collector.
Over the years, we have received reports from clients who have been approached by fraudsters announcing that they have won an award and will need to open an account to accept the prize money. These criminals will then encourage the senior to share sensitive information, grant access to their accounts, or simply send money.
If you have been approached by someone who encourages you to share personal information, it is best to end the conversation immediately and report the incident. Reports can sometimes be filed with your local law enforcement agency or they may refer you to a hotline for your state’s Adult Protective Service agency. It is also a good idea to contact your Atlas Wealth Management Advisor at that time so that we can be on alert for any suspicious activity.
How can you tell if a family member is being taken advantage of? Some indications of elder financial abuse are easier to spot than others such as account closures, unusual withdrawals, wire transfers, or new and frequent transactions. Abuse such as identity theft and more sophisticated fraud can sometimes be difficult to detect.
Often a perpetrator will work to isolate the victim from family or friends who could inquire about their finances. Like many other types of abusive relationships, there is often an element of control and intimidation by the abuser, along with feelings of guilt and denial for the victim. This can cause a reluctance, on the part of the victim, to discuss missing assets or changes in spending habits. They may become agitated or uncomfortable during a conversation. Be conscious of a victim who may have difficulty providing explanations about their finances.
If you suspect that a family member is being taken advantage of, there are steps that can be taken. Your local law enforcement agency is a good first step. These agencies will need you to provide specific details and it may be difficult to report the abuse, especially if it is another family member. However, the agency can only protect your loved one once they are aware of the situation.
For further information:
https://www.investor.gov/additional-resources/specialized-resources/caring-loved-ones/elder-fraud
https://www.justice.gov/elderjustice/financial-exploitation
https://www.consumer.ftc.gov/features/scam-alerts
[1] https://www.census.gov/prod/2014pubs/p25-1140.pdf
[2] https://www.pewresearch.org/fact-tank/2010/12/29/baby-boomers-retire/
[3] https://www.justice.gov/elderjustice/prosecutors/statutes. Title 38 Public Welfare, Chapter 9 Protection of Aged or Disabled Adults
[4] https://www.aarp.org/money/scams-fraud/info-2015/how-to-spot-early-warning-signs-of-elder-financial-abuse.html
[5] https://www.fa-mag.com/news/family–familiar-faces-are-perpetuating-up-to-81–of-elder-financial-abuse-51976.html
Additional Sources:
What to Do if You Suspect a Senior Is Being Financially Abused or Exploited, Carolyn Rosenblatt
Securities and Exchange Commission https://www.investor.gov/additional-resources/specialized-resources/caring-loved-ones/elder-fraud
DINSMORE COMPLIANCE SERVICES, LLC | ELDER ABUSE: Why it matters now
Protecting Your Clients from Financial Elder Fraud, David Kessler, Protecting the Elderly, 2015
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