Tuesday, September 16, 2014
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Elders Are Easy Targets for Scams



Five men wearing neon orange vests over work clothes and carrying walkie-talkies appear at an elderly couple's door. They say they're city employees and need to check on the home's water and electrical systems. Two of the men go through the house making inspections, with the couple in tow. The others disperse. The couple later discovers the men absconded with jewelry, cash, and other valuables.

An elderly woman living alone relies on a handyman to take care of home maintenance chores. She's visually impaired and has trouble writing his paychecks. He offers to help, and she accepts because she's come to trust him. After a few weeks, he adds a zero to make the $60 check into $600. More weeks pass, and he ups it to $6,000. The woman has no idea until she learns her checking account is depleted.

When we hear about such incidents, two reactions usually surface: What kind of lowlife targets elderly people? And how can elders get taken so easily? News reports of some scams—such as the rampant "Grandma, I'm in jail, send money now" ploy—surface again and again.

Why it happens

We may never understand how some humans can be so despicable. But the root causes for elders succumbing to such schemes are more discernible, says Robert Blancato, national coordinator of the Elder Justice Coalition, Washington, D.C., and a board member and former president of the National Committee for the Prevention of Elder Abuse, New York.

The average victim of elder financial abuse is a woman, age 80 to 89, who lives alone.

He points out that the average victim of elder financial abuse is a woman, age 80 to 89, who lives alone, according to The MetLife Study of Elder Financial Abuse, issued in June 2011, which Blancato helped to write. "The victim has limited contact with the outside world," he says, "and when someone makes contact, the victim often welcomes it, simply to have some companionship."

The aging process itself makes elderly people more vulnerable, says Joseph Snyder, director of the Older Adult Protective Services Department of the Philadelphia Corporation for Aging. He cites, for instance, a Harvard economist's research showing that the typical person's ability to make astute financial decisions peaks at age 53, wanes with each passing year, and drops steeply after 70. Another researcher at the University of Iowa found that the normal aging brain is prone to rising gullibility in financial matters, Snyder reports.

Fear is another factor that comes into play. "If you're an older person in America, you worry that Social Security won't be there for you or that you won't get your pension," Snyder explains. "Then you hear about something that promises you'll make a killing. Just look at all the bright people who fell for the Madoff scheme."

The aging process itself makes elderly people more vulnerable to elder financial abuse.

How much it happens

Elder financial abuse takes many forms: outright theft of money or property, forged signatures, con games, telemarketing scams, investment fraud, getting an older person to sign over a deed to property, and more.

One of the most disturbing findings of the MetLife study is that 34% of the perpetrators of elder financial abuse are well known to the elderly person. "Family members, friends, neighbors, clergy, bankers, cops ... they've all been perpetrators," Snyder says.

The annual financial loss to victims is estimated to be at least $2.9 billion, according to the MetLife study. But, Snyder points out, the study based its statistics and estimates on newsfeed articles—in other words, reported cases. Real financial losses are probably much higher. For instance, a New York study concluded that only one of 44 cases of elder financial abuse gets reported to authorities.

The losses to the elderly—sometimes amounting to entire life savings—are bad enough. The total costs, however, ripple out into society. "We don't know how many elders have been institutionalized on the public dollar because their assets were stolen from them, and they no longer can live independently. There's no way to track that," says Jenefer Duane, founder and CEO of the Elder Financial Protection Network, San Francisco.

Thirty-four percent of perpetrators of elder financial abuse are well known to the elderly person.

Taking action

Most states have laws that enforce penalties against perpetrators of elder financial abuse. Another key piece in combating the problem is the Elder Justice Act, part of the Affordable Care Act more commonly known as the health-care reform law. It increases funding for adult protective services nationwide. "By boosting the capacity of adult protective services to do its job," Blancato says, "we can better prevent and detect elder financial abuse."

Citizen awareness is critical, too, so that cases do in fact get reported and investigated. One of the common signals of elder financial abuse is that the abuser cuts the elder off from outside contact. He isn't allowed to take phone calls. She gets no chance to speak up for herself. The abuser dominates and intimidates the elder.

"When you stop by to visit, you get shooed away," Duane says. "You're always told the elder is asleep or not feeling well. Those are common signs that abuse may be occurring."

One of the common signals of elder financial abuse is that someone cuts off an elderly person from outside contact.

If something seems amiss, report it to your local adult protective services agency, which you can do anonymously. Then someone will stop by to visit the elder. If the danger is more immediate, call the police and ask for a welfare check.

"Gut feelings are underrated," Duane says. "Our guideline is that if you see a situation you wouldn't want your own mother to be in, then make the call."

Elders, too, need to be informed about elder financial abuse, the various forms it takes, and why they're at risk. They should be reminded to follow basic personal security practices, such as:

  • Not allowing unexpected visitors into your home. If someone claims to be from, say, the utility company, ask for identification or call to verify before letting the person inside.

  • Doing thorough background checks on anyone you allow to live in your home or hire as a caregiver.

  • Keeping your checkbook and valuables out of sight.

  • Never giving out your Social Security number or other personal financial information.

"These are things to be wary about no matter your age," Blancato says. "People have street smarts when they're younger. You can't lose them when you get older."

A resource that can help

The Consumer Financial Protection Bureau's Office of Older Americans gives seniors information and tools to navigate safely through financial challenges.

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