We’ve heard how financial scams are soaring. Banks are still being targeted for intricate denial of service attacks, unemployment is still up and the new healthcare laws are lingering with promises of unholy insanity. But there’s something else that’s nearing a crisis level. Elder financial abuse is on the rise in the U.S.
Every state has laws that include tough laws for those who scam senior citizens and there are federal watchdog groups, including CFPB. Other government agencies are doing what they can as well. Both Eldercare.gov and the U.S. Administration on Aging is spearheading new public service campaigns.
Elder Financial Abuse Numbers
One look at the latest statistics tells the tale. According to the Consumer Financial Protection Bureau, there are now 50 million Americans who are over the age of 62. We’ve heard for years about baby boomers and what it might mean for their quality of life by the time they reach retirement and unfortunately, it’s not the retirement they had in mind. In 2010, $3 billion was lost because of scams on today’s elder population and every year, there are no fewer than 5 million financial abuse reports. That number is startling, but even more alarming is the fact that only 1 in 25 of these cases is actually reported to law enforcement.
Did you know that 3 out of every 5 homes in the U.S. have heads of household who are older than 65 and have absolutely no retirement savings? These realities can sometimes breed desperation and that’s exactly what criminals are looking for.
The Consumer Financial Protection Bureau says that because we’re living longer, it’s never been more important to hold on to our assets. Women are now living an additional 21 years above the previous generation and for men, they’re living 17 years longer.
The scams run the gamut, but many have to do with credit cards and other banking products. Several years ago, there was a scam making the rounds that targeted senior citizens. Scammers would use the phone as their “in” by saying they were trying to follow up on suspected fraud, but that their records were smeared and would the customer help them verify the numbers on their credit card.
The trick was to ensure the victim carried MasterCard since all of them began with the numbers 55. Once they knew the victim indeed carried MasterCard, they would then say, “OK Mrs. Jones, let me read you what I can make out on the smeared paperwork. It looks like 5…5…” At that point, many of the seniors would take the opportunity during the pause and say, “Yes, that’s right,” and then provide the rest of the numbers the caller couldn’t make out. Unfortunately, that trick making the rounds again.
Reverse mortgages have become popular in recent years for many senior citizens. Often, they want to pay off credit card debt, automobiles, etc. so that they can enjoy their retirement years. While these are generally sound financial products, there is a growing number of companies that promise, but don’t deliver. And these guys are going after far more than your available credit card balance – they’re going for your home. If a reverse mortgage is a consideration, it should be you making the phone call – not a company representative approaching you. Also, while these are ideal solutions for many, it’s important to understand the very intricate dynamics in these types of loans. Meet with an estate planning lawyer to ensure those basics are covered.
Why Target the Elderly
The fraud is easier to carry out on the elderly for a few reasons. They’re generally less suspicious and often, they’re lonely. Of course, most of us wonder why being lonely would make them more vulnerable, but for many, isolation is a big part of their daily lives if they don’t have friends or family. The thought of someone coming back to fix a driveway or roof is equated to human contact – at least for a few days.
Many elderly people have also lost some cognitive skills and others are grieving the loss of a loved one or sometimes even a pet. Again, it goes back to the psychology of human nature. The fact that so few of these crimes are reported, criminals see them as a sure thing.
These acts are being committed by people who have access to their potential victims. Unfortunately, gaining access is sometimes as easy as picking up the phone or scouring the web. The traditional “contractor sees damage on the roof so he does the homeowner a favor” scam is alive and well, too. Telemarketing, investment opportunities that don’t exist, theft of blank checks, reverse mortgage fraud and even sweepstakes and so-called lotteries are popular preferred vehicles of the criminal.
So what can we do to protect our loved ones? CFPB and AoA offers a few tips.
If you’re the caregiver for a parent or loved one, you are the first best roadblock for criminals. As soon as they suspect the would-be victim isn’t going to stand for it, they’re out of there anyway. Seniors should never agree to anything nor should they sign any kind of contract before allowing their lawyer or family members review it. Further, they shouldn’t be fooled by the “one day only” spiel most of them use.
Also, and this may be one of the worst aspects of this entire problem – many criminals will intimidate seniors. Encourage your loved one to call the police and if it’s safe, to notice the type of vehicle the person is driving. Of course, the same warning against giving out any kind of information over the phone or in person remains as true today as it’s ever been.
In many ways, elder financial abuse is one of the most vile crimes one can commit. If we can remain vigilant in our efforts, we lessen the odds of our parents or ourselves becoming a victim. The sooner these cases aren’t hidden away from law enforcement, the sooner we can made headway in this growing problem.