Who would steal money from a little old lady or man? Plenty. Financial elder abuse causes an estimated $2.6 billion in damages each year.
"Many victims are never the same emotionally after the abuse. The average fraud causes a $30,000 loss to the senior," says Jamie Hopkins, an attorney and professor of retirement at The American College.
Typical crimes of elder financial abuse include misuse of powers of attorney, stealing money, using credit cards without permission, and borrowing against the senior’s home, says Hopkins.
Seniors may be tricked into an unauthorized sale, transfers or changes to a property title. Lottery scams lure seniors into handing over money in order to collect unclaimed prizes. "Con men will also sell unnecessary insurance products to seniors, such as long term annuities," says Mike Endredy, owner Synergy HomeCare of Mesa.
There are many ways to dupe seniors who can be vulnerable due to death of a spouse, isolation, and illness.
As the problem grows, so does the fight against it. The American Bankers Association Foundation recently announced that early next year it will provide bankers with event materials, lesson plans, media outreach tools and best practices to provide seniors and their caregivers with what they need to help prevent financial fraud.
"Bankers are often the first line of defense against elder financial fraud from educating and advising customers to spotting the signs of abuse," said ABA President and CEO Frank Keating, in a prepared statement.
Truth is, it will take the ABA and much more. For sure the problem falls hardest on the shoulders of adult children and caregivers.
Here’s how to help keep your loved one’s money safe.
Start the conversation. Make sure you have an open talk as a family about these types of issues and make them comfortable to address, says Jeff Salter, founder of Caring Senior Service.
Offer a good support system. "A lot of times seniors are more vulnerable because they are alone and don’t have as good of a support system as they once did. Make sure you are easy to access and available to answer any questions or concerns they might have about these kinds of topics," says Salter.
Help monitor their financials. Seniors are often targeted because they are more established financially, have better credit, and potentially higher credit limits. "Keeping an eye on their credit and bank accounts will help protect against fraud," says Salter.
Pay attention. Rachel Fuller, CEO and co-founder of Care Current, a provider of software for senior care agencies. "I worked in a pro bono elder law clinic during law school and I worked on several cases where elderly clients suffered financial abuse, particularly from sweepstakes mail scams."
In one case she worked on, an elderly client was receiving up to 40 pieces of scam mail a day. "Her family later found out that she had sent them several thousand dollars in little pieces over the course of several months. It’s very important to take a proactive approach looking for scam mail."
James who prefers not to give his last name says he and his sister are going through the elder financial abuse nightmare right now. His parents live in a wealthy area and they are constantly besieged by phone calls, emails and letters trying to scam them. "My father nearly loaned half a million dollars to a ‘friend’ from his childhood village in India for a dubious real estate deal. I only found out about it because I happened to be visiting my parents that day!"
His father was also trying to mail money to people who claimed that a distant relative had left him millions of dollars. "He was convinced that he had millions coming to him and he was shouting at me for trying to stop him," says James.
James and his sister turned to technology. They had all of their parents mail forwarded to his sister’s house, and they were also able to use Google voice to intercept their calls so they could hear who was calling them. "We also put a lock down on all their accounts and moved everything to paperless so we could keep track of them on the internet. It has really worked!"
Consider a prepaid card. Instead of having large sums of cash on hand, payments can be made with the card. Money can be added easily and the adult child or caregiver can stay abreast of the balance, says Regina Rivas, vice president of marketing for Capital Prepaid Services, of the benefits of a prepaid card.
Know the signs
Be wary of changes in behavior and new relationships. "A new best friend could have malicious intent," warns Leo Newman, a spokesperson for Nurse Next Door Home Care Services.
Make sure caregivers have been thoroughly screened, including a criminal background check.
Another sign of trouble is a pile of unpaid bills, the termination of vital utility services, transferring large sums of money to a new acquaintance, and writing checks to cash, points out Endredy.
Take note too of suspicious changes to wills, powers of attorney or insurance polices, says elder lawyer Richard Newman.
An aging parent or loved one may be defenseless without your advocating on their behalf. Carolyn Rosenblatt, author of The Family Guide to Aging Parents, says in her book that most financial abuse occurs at the hands of family members. If you are a witness to this, you will need the courage to report it in an effort to end the abuse. The place to start is Adult Protective Services in the county where the abuse is believed to have occurred.
Says Rosenblatt, "Adult Protective Services may or may not proceed with a case after the activity is reported, but at least you can say that you have done your part."