Financial abuse of elders can wipe out savings, take away independence

Photo: jridgewayphotography via Flickr

Financial fraud is a business which is both pervasive and problematic. Older people can be at high risk for this form of elder abuse from many sides — trusted others, friends, family members, neighbors, colleagues, or caregivers.

It can be a crime of opportunity, or a well-planned, targeted scheme, and often goes undetected for months or even years. We all need to do our part to educate potential victims and help inoculate them about this issue, according to one expert at the recent AHCJ Journalism Workshop on Aging & Health.

While financial deception can happen to anyone, older adults are more likely to be victims of fraud or scams, and they’re often more reluctant to report it, according to Kathleen Wilber, Ph.D., professor in the University of Southern California’s Davis School of Gerontology. Not only can it wipe out someone’s life savings, it can rob them of the ability to remain independent in their homes and communities.

A recent meta-analysis found elder financial fraud and scams affect approximately one of every 18 cognitively intact, community-dwelling older adults each year. N4a (National Association of Area Agencies on Aging) says financial exploitation costs older adults about $36 billion annually and is becoming the fastest growing type of elder abuse in the nation.

“In addition to the monetary damage, there are also personal costs that go with it, like anxiety and problems sleeping and the loss of personal confidence.” she told journalists at the session. “And when you’re an older adult, and you kind of lose everything, you have to be pretty resilient to figure out how to put things back together.”

Wilbur, who co-directs the USC Center on Elder Mistreatment says fear is common tactic abusers use to gain control of an older adult’s money. “The best way to let you control their money is to scare them. shake them up, use big time fear. It’s an acting job.”

Family members perpetrate about 5% of financial abuse, according to Wilbur. They may threaten to put the older adult in a nursing home if they don’t sign over property, or allow them access to a bank account. “A vulnerable older person may rationalize to themselves that it’s better to stay in an abusive situation but remain at home, rather than be institutionalized.”

Telephone scams are pervasive, and something we’ve likely all experienced. However, older people may be reluctant to cut a conversation short, or are more easily persuaded by a savvy con artist. Scammers may claim they’re a grandchild who is in trouble and needs money wired immediately; they may pretend they’re from the IRS or other agency, contending a person’s Social Security account or Medicare card has been compromised and need all kinds of personal information to “fix” the problem.

Sometimes, a family member may use money or assets that the older adult doesn’t agree to, and they might not even know an adult child or grandchild is transferring money or property. changing bills, taking money out of an account, taking personal assets and items, Wilbur. “A son that might rely on mom for money and think, well, she doesn’t really need it and I have access to the bank account, this will never be missed.” Over time, that older adult will be isolated by the trusted other, which can make financial abuse more difficult to detect, let alone report.

According to this story by David Brancaccio for Marketplace, in New York State, as few as one in 44 cases are ever reported, and financial exploitation costs older people anywhere from $2.9 billion to $36 billion each year. Yet, perpetrators often don’t go to jail, because if they’re not cognitively impaired, an older adult still has a right to determine how to manage their money, Wilbur said. CNBC recently reported “Seniors scammed by strangers lost an average of $17,000, while those who were ripped off by someone they know lost an average of $50,200, the [US Consumer Financial Protection] bureau found.”

“They can get the older person to do what they want, sign on the dotted line, authorize a transfer yes and gift them a car. And then it’s very hard to prosecute these cases when a scammer can claim “well, she wanted me to have this, I couldn’t not accept the Rolex. That would have insulted her,” Wilbur said.

Fortunately, more attention is being paid to undue influence. California law allows judges to consider four areas: the vulnerability, the authority of the influencer, the tactics and the end results. When you look at the end results, would a reasonable person say, “Well, yes, it makes sense that grandma gave this new best friend everything. It doesn’t make sense.”

The U.S. Justice Department is cracking down on financial scams against elderly, which so far has targeted about 2 million seniors, to the tune of $750 million since March 2018, according to CBS News. But it can be a bit like Whack a Mole. As fast as state and federal authorities pursue these frauds, new swindles pop up. The San Diego Union Tribune recently reported on this $7 million mortgage scam which preyed on older victims. The Boston Globe described one man’s near-miss with a Social Security scammer.

Then there are the trust and annuity scams. “Come to the free meal, and we’ll tell you about this great financial way for you save your assets from taxes,” Wilber said. They claim you need a trust, or your current trust is not what it should be. “And what they want to do is find out what the assets are so they can move that money into a new product. They border on legitimacy and the older person agrees to it, they get sold the product.”

Other common scams include those for medical products, such as claiming Medicare has authorized you for a full body scan, or some other expensive service. Email scams for products, “lost relatives” or sick kids are prevalent, and something most of us have sent right to the spam folder. However, older adults may be more vulnerable to a sales pitch for a “helpful” product or “supporting” a victim’s care, as ABC News reported. And while older adults are not the only ones vulnerable to identity theft and cybercrime, they may take fewer precautions to secure their online information, according to Bank of America.

Sweetheart scams, both online and in-person, often prey on older widows or widowers. These may be initiated by an organized ring or crime families, said Wilbur. The perpetrator’s job is to get the money and when the money’s gone they move on. The scammer knows how to make the person happy and stay mostly at arm’s length.

“You can do scams on charm and personality and you want to get this visceral emotion, using fear, or desire, or both,” she said. Those who are in early stages of cognitive impairment may be especially vulnerable.

Protecting loved ones

Education and a system of checks and balances are the first protective steps, according to this Reuters story. People need to pay attention and they need to alert family members, older adults, friends, check in with people, talk to them, Wilbur suggested.

With grandchildren, people can even set up some kind of code so grandparent knows who really is calling, like using the name of a person’s cat or dog, she said.

Some credit cards offer protections that allow a person to use them, but only for certain purchases or stores. If somebody has some cognition issues but want to have some opportunity to use their assets, a family caregiver may want to check with their loved one’s bank or credit card company about placing dollar or use limits on an elder’s card.

Reporters have a role to play too. “You in this room are a huge part of the remedies because I think the more information that can be shown on this, the better,” Wilbur said.

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