Financial exploitation of seniors is heartbreaking and tragic, and it happens every day. Occasionally, you’ll read about it in the news or see it mentioned on social media, but these reports usually are about large-scale crimes. Most incidents happen outside the glare of the public spotlight.
Financial exploitation robs seniors of the financial resources on which they depend to live. Increasingly, older Americans are targeted with scams, too-good-to-be-true sales pitches, outrageous fines and fees, theft of their bank accounts and credit cards by people they trusted and even victimization by their own caregivers. A retirement nest egg, accumulated over decades, can be gone in minutes and with it the hope of a happy retirement.
Earlier this month, the Mississippi attorney general’s office announced the sentencing of a 54-year-old Laurel woman after she pleaded guilty to three counts of exploitation of a vulnerable person. Lisa Byrd Mozingo, who was employed as a caregiver to an elderly person, was accused of transferring the victim’s money into her own account and using the victim’s power of attorney to buy cars, silver coins and other items. In all, the damage totaled more than $100,000. Under the plea deal, Mozingo will serve 10 years in prison (with an additional 10 years suspended, plus five years’ supervision) and will have to pay back the money and perform community service.
According to a 2011 MetLife study, an estimated $2.9 billion is lost annually to scams explicitly targeting seniors. It’s one of the most common forms of abuse committed against seniors, notes the American Bankers Association Foundation. And most experts agree that elder financial abuse is under-reported; some experts believe that only one case in 44 is ever reported to authorities.
The problem is twofold: First, seniors hold a lot of the money in the U.S. economy, making it a tempting target for those who would seek to get their hands on it. Secondly, as many seniors age, they become less able to make good financial decisions, and in some cases suffer from dementia or other cognitive issues.
“Older Americans currently hold more than two-thirds of all U.S. deposits, making them highly susceptible to scams, exploitation and abuse,” said Corey Carlisle, bankers foundation executive director. “It’s critical that seniors and their loved ones recognize the signs of financial abuse before it’s too late and get help immediately if they think they’ve been victimized.”
The financial industry is stepping up with tools to help combat elder financial abuse. Last year, the North American Securities Administrators Association started requiring financial advisers to report suspected financial abuses to states’ securities regulators and adult protective services departments. At the federal level, the U.S. Securities and Exchange Commission will in February begin requiring its broker-dealer members to add a trusted backup contact person for all accounts and to allow members to put temporary holds on fund disbursements when financial exploitation is suspected. And the Investor Protection Trust is training physicians and attorneys to be on the lookout for warning signs of financial vulnerability.
These are all steps in the right direction, but they can’t solve the problem on their own. As the old adage goes, the best defense is a good offense. If you’re a senior, or are responsible for helping a loved one make financial decisions, there are some things you can do to reduce the risk of financial exploitation. The bankers foundation suggests these actions:
First, plan ahead. Talk to someone at your financial institution, an attorney or financial adviser about the best options for you in managing your money and assets.
Choose someone you trust to act as your agent. You may need to look beyond your family members; tragically, a substantial percentage of financial exploitation is committed by relatives of the victim.
Never give personal information, including your Social Security, account number or other financial information to anyone over the phone unless you initiated the call and the other party is trusted.
Stay alert to common fraud schemes. There are many scams targeting seniors, and they know how to get past your defenses. In the past, I’ve written about the “grandparent scam,” in which a scammer purporting to be a grandchild calls you and says they urgently need your help. And seniors are targeted every day with travel scams, pitches for products and investments and scary warnings that the IRS or Social Security or law enforcement is coming after you if you don’t pay up.
Never rush into a financial decision. Ask for details in writing and consult with a financial adviser or attorney before signing any document you don’t understand.
Check references and credentials before hiring anyone. Don’t allow workers to have access to information about your finances and make sure to lock up your checkbook, account statements and other sensitive information when others will be in your home.
Pay with checks and credit cards instead of cash to keep a paper trail.
You have the right not to be threatened or intimidated. If you believe you are a victim of elder financial abuse, contact your local Adult Protective Services, tell someone at your bank or call your local police for help.