Elder financial abuse has the potential to impact all of us on some level, whether you are protecting a loved one from becoming a victim or actively taking precautions to protect your personal estate, fraud and exploitation is a risk that grows as people age.
It is important for individuals to understand the magnitude of this crime, identify ways to both actively prevent and stop abuse, as well as understand how to escalate if it is suspected.
Seniors lose an estimated $36.5 billion every year to the crime of elder financial abuse. In fact, according to the 2010 Investor Protection Trust (IPT) Elder Fraud Survey, more than 7 million older Americans - one out of every five over the age of 65 - have fallen victim to a financial swindle. As Baby Boomers turn 65 at a rate of 10,000 a day, the threat of potential abuse heightens.
It is imperative we take preventative measures to confront this epidemic, including educating ourselves on the potential warning signs and using the resources and tools available to stop fraud and abuse from occurring.
Spotting exploitation can be difficult as the perpetrators of these crimes tend to be close friends or relatives. Studies project that approximately 70 percent of elder financial abuse is committed by family members, friends, trusted persons or others known to the individual being exploited. This increasingly blurred line of those who have one's best interest at heart and those who don't makes spotting these scams a challenge.
Here are a few warning signs:
- Sudden reluctance to discuss financial matters
- Sudden, atypical or unexplained withdrawals or wire transfers from their accounts, or other changes in their financial situations
- New best friends and "sweethearts"
- Behavioral changes, such as fear or submissiveness, social isolation, withdrawn behavior, disheveled appearance, and forgetfulness
- Changes in the will, especially when they might not fully understand the implications
- Large, frequent "gifts" to a caregiver
- Missing personal belongings
Reporting is the most important step to escalating suspected elder financial abuse. Studies show that as few as one in 44 cases of elder financial abuse are reported. Victims tend to keep details secret for a number of reasons - fear of being victimized again, reluctance to incriminate a family member or friend, or admitting vulnerability are among them.
Use the below resource to properly report suspected elder financial abuse.
- National Center on Elder Abuse ncea.acl.gov
Remember, elder financial exploitation is not exclusive. Consider the below to help protect yourself from potential abuse:
- Organize your estate. No matter how old you are it's a good idea to update and organize all your financial documentation, including your will, financial powers of attorney, real estate deeds, insurance policies, pension and trust documents, birth and marriage certificates and Social Security paperwork. Maintaining an organized file, and helping others (such as a parent, uncle or close friend) do the same, can make it easier to spot the inconsistencies and red flags that could signal financial abuse.
- Make a list of financial contacts, bankers, insurance agents, attorneys, accountants, stockbrokers, and other professionals should be on it. Share your list with your Financial Advisor and with family members you trust. In addition, ensure you have a trusted contact on file. This is an individual who the advisor could contact in the event of an emergency or suspected abuse.
Source: Wells Fargo Advisors