While fraud, scams and financial exploitation does not discriminate based on age, our seniors are hit the hardest every year. An estimated $36 billion is stolen from older adults annually due to financial elder abuse. Financial elder abuse scams are on the rise and are becoming more prevalent each year. This is why it is now considered to be the biggest crime in the 21st century.
*This blog is for educational purposes only and should not be considered legal advice. The use of the Paths Law Firm website does not constitute a client-lawyer relationship.
Sadly, most financial elder abuse scams are never reported and the ones that are reported can be very difficult to prosecute. This makes our seniors a high-risk target for what is considered a low-risk crime to criminals. Financial scams can be devastating to anyone, however, for seniors, the results can be far worse. It can leave them in a vulnerable position without the ability to recoup funds for their retirement.
What is Financial Elder Abuse?
Financial elder abuse is when the financial resources of an elderly man or woman are taken advantage of or misappropriated. This type of exploitation can be done by trusted advisors, caregivers, family members, and scammers. This is a form of fraud that deprives the older individual of the access or use of their assets, belongings, benefits, and resources. In short, financial elder abuse is when one person takes advantage of an elderly person for the first person’s own personal financial gain.
Who Commits Financial Elder Abuse?
The volume of financial elder abuse is on the rise. Sadly, the abuse is often carried out by someone close to the victim. Surveys show that 66% of all financial elder abuse is carried out by family, friends and trusted individuals. This list can include the following:
- Family members
- Friends
- Neighbors
- Caregivers
- Health care providers
- Banks and other financial institutions
- Strangers
What Are the Different Types of Financial Elder Abuse?
A “scammer” is a person who commits fraud or participates in a dishonest scheme. There are many different types of financial abuse employed by scammers. Below are a few of the more common scams used on the elderly.
Email Phishing Attacks
With up to the minute news and media coverage on the novel corona virus, cyber criminals are now using the pandemic to their advantage with phishing attacks to exploit fear. The email messages that are being sent to the elderly identifies that the sender is from reputable organizations providing information about the virus. The email may include attachments or links as the latest statistics on COVID 19. Once the attachment is opened or the link is clicked malicious malware is then downloaded to the receiver’s computer. This malware could allow cyber criminals to take over your computer, log keystrokes, and even access personal and financial information. This type of attack can result in identity theft.
Identity Theft
With identity theft, a thief steals the identity of an individual to open up fraudulent accounts. These accounts are lines of credit or credit cards in the victim’s name. This is done by stealing the senior’s social security number and other vital information.
Loan Scams
Loan scams usually involve predators pressuring older homeowners into taking out high-interest loans or reverse mortgages. The loans are fraudulently represented, leaving the elderly homeowner in a bad financial position. These loans are not in an elderly person’s best interest and can cost them emotionally, financial strain and even the loss of their home.
Investment Scams
Investment schemes, also known as “get rich quick” scams are a popular form of theft. Here, the victim is convinced they will make double (or more) on the money they invest. Sadly, in these types of scams, the thief ends up stealing the victim’s life savings.
Sweepstakes and Lottery Scams
Sweepstakes and lottery scams are when someone claims to be associated with a prize contributor or lottery. They initiate contact with the victim notifying them they have won a prize or give hope they will soon win. This type of scam usually ends in the scammer asking the victim to send in money to pay for the taxes for the money that they have won. The Lottery or sweepstakes scam is a growing threat.
Home Repair Scams
Home repair scams are also very popular. One type of home repair scam is when the scammer approaches an elderly homeowner and tells them that they have recently completed a job in the neighborhood and that they have leftover materials. The scammer tells the victim that they need to pay upfront and will be back to do the job. The scammer takes off with the money, and never performs the work paid for.
Utility Company Scams
Utility scams occur when someone impersonates an employee from a utility company. This may be the gas, water, electric or cable company with whom the victim is familiar. The impersonator calls stating that they are trying to collect on a past-due bill. In this type of scam, the impersonator will use intimidation and may even tell the victim their utilities will be turned off if they do not pay the bill. For this to work, the victim is coerced to pay over the phone with their credit card or debit card.
Grandchildren Scams
While all scams are sad, one of the more heartbreaking financial abuse scams is when a thief contacts an older person and pretends to be their grandchild and asks to borrow money.
Power of Attorney Scams
The person that is granted power of attorney can abuse their power. When this happens, the abuser uses their designation to acquire assets, money, and possessions that were not intended for them.
Bank Cards or Check Scams
Bank card or check fraud can happen when a caretaker or family member has access to a senior’s accounts. This allows them to withdraw money and make purchases fraudulently.
Threat of Violence Scams
Elderly individuals that are unable to defend themselves become a target of threats and violence in exchange for assets or money. This type of abuse also includes friends or family who imply, or may overtly, threaten to withhold care as well.
Threat of Violence Scams
What are the Effects of Financial Elder Abuse?
The effects of financial elder abuse can be extreme for seniors. Not only are they impacted financially but they are also impacted emotionally. The victim loses their trust and becomes skeptical of even those who help them. They may start feeling depressed, fearful, angry or even ashamed. Also, there is always the worry of depleted health, stress, and destructive behavior. The loss of finances can impact their assets, residence, to the point of their inability to pay for utilities or afford proper health care and nutrition.
Why Do Seniors Fall Prey to Financial Scams?
According to research, 53% of Americans stated that financial elder abuse would compromise their ability to live a longer, financially secure life. In the survey, 47% of seniors manage their own finances, thus leaving them open to financial abuse. Only 1 in 4 seniors invite a family member or trusted advisor into conversations about their finances. A great way to protect against financial elder abuse is to have a durable power of attorney, however, it was cited, only 16% have one in place.
Everyone wants the ability and dignity to age gracefully and to maintain their independence for as long as they can. But with more than 10,000 people in the United States turning 65 years old every day, and the number of people with dementia and Alzheimer’s is rapidly increasing, this is an increasingly enticing target for the scammer. Thus, leaving them open to financial abuse, deceit, and manipulation. As people, we are living longer lives than in the past and with that longer retirements. Collaborative help for seniors is required to protect them and their life savings. Along with a durable power of attorney, a complete Estate Plan designed to protect assets is a way to safeguard the future of loved ones. If you or your loved ones do not have an Estate Plan in place, Paths Law Firm is here to help. We will work with you to set up a plan that meets your needs.
What Steps can Seniors Take to Safeguard Against Financial Elder Abuse?
Regardless of awareness of the new scams that pop up each day, many seniors recognize that they need to further protect themselves and their families financially. That includes protecting their personal information and wealth. Here are some steps that can help to safeguard seniors against financial abuse.
- Be Aware of Who is Asking for Your Information.
- Never respond to texts, emails or telephone calls asking for personal information.
- Only provide personal financial information when you initiate a phone call.
- Never click on links in emails from unknown senders.
- Make it a priority to review credit reports frequently.
- Set up alerts for banking and financial institutions related to questionable transactions on accounts.
An Elder Law Attorney Can Help Seniors Plan Ahead
Our seniors face complex and legal concerns that are often different than concerns in their earlier years. And, having an impartial third party to listen to your concerns and provide options and solutions, provides an additional level of protection for the future.
It’s important that seniors work with an attorney that is an expert in Elder Law. An Elder Law attorney will have the expertise necessary to fill the needs of seniors and issues of elder abuse as this attorney will have the most experience or familiarity with these scenarios.
An Elder Law attorney can help with things such as elder abuse and estate planning, including planning for the management of one’s estate during life and its disposition on death using trusts, wills, and other planning documents. In addition, an Elder Law Attorney can provide many other services to include things such as:
- Preservation/transfer of assets
- Nursing Home Medicaid
- Medicare claims and appeals
- Social security and disability claims and appeals
- Supplemental long-term health insurance issues
- Disability planning
- Durable Powers of Attorney
- Living Trusts
- Last Wills and Testaments
- VA and Other Benefits
- Conservatorships and guardianship’s
- Probate
- Administration and management of trusts and estates
- Long-term care placements in nursing home and life care communities
- Nursing home issues including questions of patients’ rights and nursing home quality
- Retirement, including public and private retirement benefits, survivor benefits, and pension benefits
Protecting You From Financial Elder Abuse
At Paths Elder Law, we use a holistic approach when providing legal advice and take into consideration the issues that seniors face. We aspire to a higher level of professional practice standards and provide our clients with peace of mind in the legal advice we provide to them. If you or someone you know has become a victim of financial elder abuse, Contact Paths Law Firm to schedule a consultation.
