Financial elder abuse continues to be an issue that often goes unrecognized and even when it is, it is under-reported and under-prosecuted. According to a 2011 MetLife study, elder victims of fraudulent activities experience losses in excess of $2.9 billion annually. And that atrocious figure doesn’t include the related damages that result from being victimized.
Recognizing the various types of financial exploitation is an important first step is preventing it from happening to you or your loved one.
The most common financial crimes against older adults are fraud, scams, identity theft and health care fraud. While the perpetrator can be a total stranger, it’s more often the case that the person is known to the victim. Sadly, those closest often pose the greatest risk. In 2014, the National Adult Protect Services Association (NAPSA) reported “90 percent of abusers are family member or trusted others.” A survey of state Adult Protective Services agencies showed that 33 percent of reported financial exploitation of those over the age of 60 occurred at the hand of a son or daughter while other family members represented 22 percent of the financial abusers.
Of course there are things that serve as red flags and point to a potential case of financial exploitation. In my practice I have seen some of these indictors and have worked with elders and their families to take appropriate measures to stop or mitigate the damage such abuse can cause.
Some of those red flags include:
- Money is missing from the person’s account or large amount of money is being withdrawn by a caregiver or family member without explanation;
- Bills are not being paid even in cases where someone is responsible for paying them;
- Someone appears to be forging a person’s signature;
- The older person begins making unplanned transfers of property, cash reserves or other items.
It’s often very difficult for an outsider to recognize if financial elder abuse is occurring and it’s even more difficult to raise it with the elder, and potentially unsuspecting, victim. Denial is often the first response, particularly if the abuser is a family member or close personal acquaintance. Shame often follows along with the embarrassment of having been “swindled” or “conned.” According to the MetLife study, these are leading reasons why so many instances of financial elder abuse never even get reported to authorities.
Financial con artists tend to target older adults who are nearer to retirement than their younger counterparts who typically have less in savings. They may look for those who are somewhat socially isolated or lonely. They may often describe themselves as “advisors” and intimate they have inside knowledge or skills that retired adults can’t afford to live without. They may prey on fears or use other emotional ploys to try and tempt their victims to take action with little or no investigation.
Being alert and watching for signs of potential abuse can help you or your elder loved one avoid becoming a victim. We’ve put together some useful information on various type of financial abuse and what you can do to prevent them. To request a packet go to www.ToYourWealth.com/wellbeing and enter web code ABUSE for your free copy.
Michael Haubrich, CFP® and Certified Senior Advisor is a fee-only financial planner specializing in elder life planning with Financial Service Group Inc., a registered investment advisory firm at 4812 Northwestern Ave., online at www.ToYourWealth.com