Older American adults are at an increased risk of becoming a victim of financial fraud or exploitation and criminals don't want you to know it. An estimated $36 billion is lost to these con artists each year. They gain the trust of our loved ones and use it against them in ways that leave victims emotionally and financially devastated.
A scammer will use bits of information, unknowingly provided by the victim, to create stories that convince him or her that a family member needs money to avoid jail time, that services were provided when they weren't, or that they have to pay taxes on sweepstakes they've never entered. These are just a few examples of the variety of creative ways this growing crime can make its way into the lives of loved ones.
It's important to know how to detect elder financial abuse before a parent or grandparent becomes a victim or to stop it if it's already begun.
Simply put, elder financial abuse is the exploitation of seniors and older adults for monetary gain.
Why is there such a focus on the elderly? Scammers know that older Americans hold the majority of wealth in this country and they are often more trusting and less savvy and aware than younger people. The ultimate win for a scammer is to gain access to the assets or property of senior Americans.
We often think that scammers who commit these crimes are hired caretakers, attorneys, banks, and neighbors. Sadly, upwards of 90% of abusers are family members or other persons held in confidence of the victim. Since family members, acquaintances, and even strangers can perpetuate this abuse, it's crucial that you don't dismiss unusual behavior even if the senior quickly dismisses it. Beyond the visible signs of missing property and forged documents, here are a few ways to detect elder financial abuse that might not seem obvious.
While any one action listed here may not, in isolation, confirm the existence of elder financial abuse, their very presence should warrant further investigation by a loved one. The following activities may indicate elder financial abuse has occurred or is happening right now:
Changes in Banking Habits
The elderly individual may be embarrassed, get defensive, resist talking about finances, or not be able to explain changes in their financial situation when asked. Don't let this deter you from following the evidence to wherever it may lead.
Unfortunately, unethical professionals can also be the perpetrators of financial abuse. These people, such as healthcare providers and administrators count on the elderly to pay less attention to overcharging of services, prescriptions for unnecessary medications, and billing for healthcare when none was provided. Family members who review medical billing documents with their elderly loved ones can help stop this type of fraud in its tracks.
You can stop financial elder abuse by having open discussions with your loved one about your concerns. Understand that he or she may know that they've been a victim and does not want to share what happened or is still happening due to pride or shame. If your loved one refuses to share details, talk to their friends and neighbors to gain more information. If warranted, take the evidence that you receive and report it to the appropriate authorities. This can include the local police and state agencies. Use the National Center on Elder Abuse (NCEA) directory to locate agencies that investigate suspected elder abuse.
Marguerita M. Cheng, CFP®, CRPC®, RICP®, CDFATM, Chief Executive Officer at Blue Ocean Global Wealth, is a Certified Financial Planning Expert with 18 years of experience. Prior to co-founding Blue Ocean Global Wealth, she was a Financial Advisor at Ameriprise Financial and an Analyst and Editor at Towa Securities in Tokyo, Japan. Ms. Cheng serves as a Women's Initiative (WIN) Advocate and subject matter expert for CFP Board, contributing to the development of examination questions for the CFP® Certification Examination. In 2017, she was named the #3 Most Influential Financial Advisor in the Investopedia Top 100, a Woman to Watch by InvestmentNews, and a Top 100 Minority Business Enterprise (MBE®) by the Capital Region Minority Supplier Development Council (CRMSDC).
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