Financial Exploitation of Seniors - A Growing Problem
By Don Drake, Connelly Law Offices, Ltd.
Connelly Law and the Pawcatuck Neighborhood Center in Connecticut held a seminar on Elder Financial exploitation on Thursday, August 31. Jordan Leroy, the Communications Coordinator of the Center, organized the event.
The attendees discussed the rise of elder exploitation shown in news reports. They shared their experiences of being contacted by phone by someone attempting to commit financial fraud and had questions about how to protect their savings, the red flags associated with these scams, and how to report such activities. Given their concerns, we wanted to follow up with this blog.
"As America's population ages, financial exploitation of seniors has become one of the fastest-growing crimes," stated professional fiduciary and certified elder law Attorney RJ Connelly III. "The Elder Justice Coalition reports that seniors are falling victim to financial fraud ranging from $2.9 billion to as high as $35 billion, and the true extent of this problem remains unclear. Shame, embarrassment, and not knowing where to seek help make senior exploitation an under-reported crime."
Who Are the Victims?
It's important to note that a sizable number of women between the ages of 75 and 80 are living alone, with statistics from the United States Census Bureau showing that 47% of women in this age group are currently living by themselves. This makes them a prime target for potential scammers.
Typically, victims of financial scams often have underlying health issues such as dementia and depression. These conditions make them vulnerable targets for fraudsters. In a recent study conducted at Rush University in Chicago, it was found that even mild cognitive impairment in the elderly can increase their susceptibility to financial scams due to slowed perceptual speed and weakened episodic memory.
In most cases, the perpetrator of financial exploitation is often someone close to the victim. According to the MetLife study, 34% of reported incidents were committed by family members, friends, neighbors, or caregivers. The National Center on Elder Abuse reports an even higher estimate, with family members responsible for 57.9% of financial exploitation cases against older adults, followed by friends and neighbors at 16.9%, and home care aides at 14.9%.
The Warning Signs
According to the United States Department of Justice, the warning signs of financial exploitation include:
Sudden changes in bank accounts or banking practices, including an unexplained withdrawal of large sums of money by a person accompanying the older adult.
The inclusion of additional names on an older adult’s bank signature card.
Unauthorized withdrawal of the older adult’s funds using their ATM card.
Abrupt changes in a will or other financial documents.
Unexplained disappearance of funds or valuable possessions.
Provision of substandard care or bills left unpaid despite the availability of adequate financial resources.
Discovery of a forged signature for financial transactions or for the titles of the older adult’s possessions.
Sudden appearance of previously uninvolved relatives claiming their rights to an older adult’s property or possessions.
Unexplained sudden transfer of assets to a family member or someone outside the family.
The provision of services that are not necessary.
An older adult’s report of financial exploitation.
Other signs include:
People suddenly show interest in an elderly person's assets and offer to "help" despite previous disinterest.
Individuals in close proximity to the elderly person have a history of addiction, including but not limited to substance abuse and gambling.
Individuals who face ongoing financial struggles tend to develop a close relationship with elderly individuals.
Someone insisting on being granted power of attorney so they "can help" when needed.
Who Commits the Act?
Individuals who deliberately target older adults to exploit them financially are known as predators. The perpetrators of predatory financial abuse often build a relationship with a vulnerable older person over several days or longer.
Then there are the opportunists. Financial exploitation of older people can occur when opportunistic individuals take advantage of their relationships with the elderly. These opportunists may seize the chance to exploit the situation for their own gain. Examples of this type of financial abuse could include:
Using an older parent’s ATM card without their permission.
Forging or misusing an older person’s checks.
Using the authority granted by a power of attorney to use the older person’s funds for one’s own needs.
Pressuring an elder parent into paying expenses for oneself or someone else.
Family members, paid in-home care providers, or trusted advisors may commit “opportunistic” abuse.
Why the Increase in Financial Exploitation?
According to the FBI, seniors are currently facing a higher risk of exploitation because of the widespread use of electronic banking systems and the Internet. Many older adults find it challenging to comprehend or adapt to the electronic means of conducting business. Unfortunately, con artists tend to target this age group for assorted other reasons, including:
Many seniors, due to their homeownership, savings, investments, and excellent credit, are targeted by scammers.
Scammers understand many elderly individuals may not be the best witnesses. Financial frauds related to bank accounts and investments often take place over a prolonged period, making it tough for victims to recall specific details and nuances. Such patterns may also be misconstrued as gifts, which further complicates the process of proving the crime.
Due to their trusting nature, seniors are at risk of being exploited by both strangers and family members.
Many seniors do not report such crimes because they feel embarrassed, especially if a family member was involved in their exploitation.
As some seniors look to regain their youth, con artists take advantage of them by offering products that claim to improve memory, physical functioning, and prevent cancer. The physical limitations seniors face, such as pain, and decreased mobility, and the loss of independence make them vulnerable to the false promises of quick fixes by these criminals.
Seniors fear that falling victim to a scam will make them appear vulnerable and jeopardize their independence, so they are hesitant to seek assistance.
Many seniors who live alone in their homes after losing their partners become vulnerable targets for financial scammers. These unscrupulous operators often scour obituary reports in newspapers and on the internet to find potential targets who may be lonely and easy targets.
With the advent of social media, scammers have found it easier to prey on vulnerable elderly people. By closely monitoring online discussions related to recent deaths, vacations, and property acquisitions within families and other online platforms, these unscrupulous individuals can easily identify their targets. They often pretend to be "long lost" family members, attorneys, or financial advisors, claiming to have a check from the estate to deposit in their bank account or some other fabricated story aimed at gaining access to their victim's bank accounts.
The Telemarketers
Telemarketers are trained to exploit seniors by preying on their weaknesses. Some of the ways they do this is by using phrases such as:
“If you don’t grab this offer now, I can’t guarantee it will be available tomorrow!”
“We have a free prize for you; all you need to do is pay for the shipping and handling!”
“It is free, and we just need your credit card number to make sure you get the prize we are sending you!”
“There is no need to check with your family or your attorney, and we are here to support your independence!”
If an unsolicited caller makes any of these statements or similar ones to a senior, they should be instructed to hang up the phone immediately. Falling prey to these scammers can lead to repeated attempts to con them until all their funds are depleted. Therefore, seniors must be cautious and vigilant when answering calls from unknown numbers.
The Costs of Financial Abuse
"Financial abuse of the elderly can have devastating effects," said Attorney Connelly. "A study revealed that close to one in ten confirmed victims of financial abuse had their savings account completely depleted, which forced them to relinquish their independence and relocate to a nursing facility. Despite the prevalence of these crimes, many states with adult protective services agencies have experienced a reduction in staff and budget cuts."
If you become aware of a financial crime against a senior, it's important to report it to the authorities, even if it's too late to prevent the crime. The information you provide could help protect others from being victimized. As the saying goes, "If you see something, say something."
Finally, seniors can benefit greatly from the services of a professional, independent fiduciary. Such a fiduciary has a legal obligation to act in the best interests of their client, which includes monitoring finances, paying bills, and providing regular accounting of financial resources. By entrusting their financial affairs to a fiduciary, seniors can maintain their independence while ensuring their current and future financial needs are met. The cost of fiduciary services is minimal compared to potential losses from scams. It also provides seniors with peace of mind, making it a wise investment.
To report financial exploitation of seniors, please click this link to contact the National Adult Protective Services Association.
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