Although it’s sad to think about someone taking advantage of Grampa Jack’s giving nature or Great Aunt Mimi’s kind heart, according to a recent study, 1 in 18 older adults will fall victim to financial scams, fraud or other form of financial abuse. Even sadder, the National Center on Elder Abuse reports that 90 percent of elder financial abuse happens by family members or people the victims know well, such as neighbors, friends or caregivers. And the impact can be catastrophic; research shows that seniors lose billions each year to financial abuse, not to mention the emotional trauma caused by the betrayal.
Why are the elderly a target?
One reason the elderly are often targeted is because they tend to be more trusting and are experiencing the mental decline that usually comes with age. However, mental decline isn’t the only factor. Many older adults are also more physically frail, and often not able to take care of things around their houses like they used to, which opens the door to unscrupulous service providers and potential predators.
Seniors also often live in isolation. If they are not very mobile, and don’t live close to family or friends, it’s easy for strangers to step in and “befriend” an elderly person for financial gain.
For those who live with relatives, this allows greater access to their mail, accounts, financial statements and personal documents. Financially motivated family members might convince the older person to transfer funds from their bank accounts, sign checks, or make excessive withdrawals.
Recognizing the signs
Seniors can be targeted in a number of ways. A caregiver, relative, or close friend, for example, may be able to take money from bank accounts, forge signatures on documents, or abuse credit cards. And while people who financially exploit the elderly come from all walks of life, studies show many abusers fit a profile.
“Perpetrators are most likely to be adult children or spouses, and they are more likely to be male, to have a history of past or current substance abuse, to have mental or physical health problems, to have a history of trouble with the police, to be socially isolated, to be unemployed or have financial problems, and to be experiencing major stress,” a report in the New England Journal of Medicine says.
As a result, it’s important to be on the lookout for signs of financial abuse involving our parents, grandparents, and other elderly relatives and friends. The Association of Certified Financial Crime Specialists says to watch for these red flags when an older person:
- Suddenly has a new companion (such as a “friend” or caregiver) who is overly interested in their finances or claims to be conducting financial transactions on their behalf.
- Is prevented from speaking for him or herself, or the companion is unwilling to leave the older person alone when discussing financial matters.
- Seems afraid, anxious, or overly submissive toward someone in control of their financial information, or you notice changes in the older person’s demeanor, appearance, grooming, or hygiene.
- Is excited over a deal that seems “too good to be true.”
- Is unable to remember or understand transactions they have made or documents they have signed.
Abusers are not always someone the elderly person knows. Many scammers specifically target the elderly, and they can be very convincing. A report from the Stanford Center on Longevity found that seniors are more likely to fall victim to financial abuse when the abuser plays on emotions like excitement or fear, for instance, saying a family member is hurt or in desperate need of money.
Here are some other common scams that target senior citizens:
- Lottery & sweepstakes scams: “You’ve already won! Just send $2,500 to cover your taxes.”
- Home repair scams: “We’re in your area and can coat your driveway really cheaply.”
- Grandparent scam: “Help Grandma, I’m in jail and need you to send money for my bail immediately!”
- Charity scams: Fake charity solicitations usually with high-pressure sales tactics, especially common after natural disasters.
- Utility scams: “I’m from the utility company; I need you to come outside with me for a minute.” (while accomplice steals valuables inside)
- Telemarketing scams, often with threatening tones and comments.
- Predatory lending: seniors pressured into taking out inappropriate reverse mortgages or other loans.
- Investment/securities schemes: pyramid schemes; unlicensed dealers.
- Phishing: false e-mails about financial accounts.
- Identity theft: credit cards opened fraudulently, etc.
- Medicare scams: “You owe money to the government for unpaid medical bills.”
Suspect abuse? Get help.
If you suspect that a family member or someone you care for has been or could be the victim of financial abuse, there are ways you can help. The National Center on Elder Abuse provides information on how to report suspected abuse to law enforcement, your local Adult Protective Services agency, or the state’s attorney’s office. You should also encourage potential victims to get in touch with their financial institution and let them know about the fraud.
Also, help your loved one to safeguard their financial accounts. Help them select secure passwords, monitor accounts regularly, and consider setting up alerts so they can stay on top of activity in their accounts.
It’s a good idea to have a conversation with your elderly relatives and friends so they too know what to watch out for, and how they can avoid being a victim.
Resources: AARP, National Adult Protective Services Association, National Center on Elder Abuse