If you have one or more elderly parents, you can bet that someone out there is trying very hard to get into their pockets, and empty them. These miscreants skulk around the home, bang on the door, call on the phone, place ads in magazines and newspapers, on billboards, online and on TV. Seniors who in possession of most of their faculties will likely turn these scoundrels away at the source, but what if your mother or father is mentally challenged, or losing contact with reality? What if they’ve lost their ability to exercise good judgment – maybe you’ve just learned they purchased a burial plot in a state clear across the country, in response to some salesman’s telephone plea – what will you do?
If this sounds (uncomfortably) familiar, now is the time to act. Your parent(s) need your help. Perhaps they’re having problems with balancing the checkbook, keeping track of the cash or paying their bills. If you do it tactfully, they may allow you to “help.” This is your opportunity to monitor their financial affairs to make sure
What is senior financial abuse?
Elder financial abuse is “the improper or illegal use of the resources of an older person, without his/her consent, for someone else’s benefit.”
Is this very common?
As the baby boomers begin to age, the incidence of financial exploitation of the elderly will increase. It is estimated that by 2030 about 70 million elderly will grace our population, more than twice the number in 2000. Many will fall victim to financial abuse. Seniors, relatives and caretakers need to be aware of what can happen, what will result if it does, and what to do about it. Some preventative measures are also available.
Very few cases of financial abuse will ever be prosecuted – about 1 in 6, at the present time. Seniors may be afraid to report or too embarrassed to talk to police – to admit that they have been the fool for some scammer. Every case that is not reported simply makes it easier for the crooks to extract more money from the elderly. Seniors in our society are apt to have extra cash, big bank accounts, cash hidden under the mattress, stocks, bonds and other assets that can be cashed in.
Why are the elderly so vulnerable?
For many reasons. For one thing, they control more than 70% of the nation’s money. They often do not realize the value of their assets. A house that is worth 400,000 because of its location may be devalued by them because it’s a bit rundown. Also, the elderly are likely to have handicaps that cause them to depend on others for help. In an emergency, they might be forced to let a total stranger move in and take over. Seniors without living relatives or trusted friends are even more vulnerable. They may be too feeble or ill to take care of their own financial affairs or even to follow through if, for example, their property is stolen. Scammers know this, and take advantage of it.
However sharp their minds in their old age, some seniors have never studied or informed themselves on financial matters, and are not likely to take it up in their Golden Years. They don’t understand the Internet or how to use it to get information; they get flustered when they can’t find the words to express themselves in talking to their banker (and the banker’s impatience doesn’t help at all)
How do people abuse seniors financially?
Scammers are creative people who use various methods to convince the elderly that someone needs them. They can help poor or ill children; other oldsters like themselves or even their relatives. Seniors who feel a bit left out of things may jump at the chance to get involved in some worthy cause.
Here are some examples:
o A daughter persuades her father to give her power of attorney, then empties his bank account.
o A non-licensed “roofer” visits a senior lady and offers to put a new roof on her house for a low price. She is happy to agree though there is nothing wrong with her roof. The man takes the money and never comes back.
o A neighbor charges an elderly man $50 per week to buy and deliver his groceries.
o A caretaker uses a senior’s ATM card to withdraw money for necessities, but gets an extra $100 for herself.
o A stranger persuades an elderly person 300% return on the money they invest with him, but once they’ve turned over the cash, they never hear from him again.
o A con-man “collecting for charity” (vague about which charity) takes $200 from a kind-hearted senior.
o A housekeeper sneaks small valuable items from a senior’s house and sells them on eBay.
o Another caretaker charges clothing and other returnable items to her employer’s credit card.
Who is most likely to abuse?
First, family members. They are more likely to have access to keys, PIN numbers, passwords, bank statements, etc. Also, a family member is more likely to be come a caretaker than a stranger.
Caretakers, who often have access to the same.
Strangers who have persuasive skills and access to the elderly. They may watch the obituaries, lurk about senior centers, hospitals, clinics and other places where seniors are likely to be found. Their methods for extracting money from the elderly are devious and can be extremely clever. Be sure your seniors know they should inform you of any such approach by a stranger.
Service people: unscrupulous auto mechanics, lawyers, bankers, doctors, accountants or others. Seniors may find it fatiguing or simply overwhelming to shop around for the best price or service; they may have used a certain service for years and years and want to continue it, even though it’s charging them twice as much now as before.
New acquaintances: if your 88 year-old mother turns up with a 55 year-old boyfriend, your scam alarm should start going off immediately. Get your camera out and insist on taking a number of photos of him. If that doesn’t discourage him, go online and check his background. If he so much as mentions “borrowing” money to your mother, call the police.
Then there are the pros.
10,000 seniors in southern Oregon receive notices in the mail that they have won a “Grand Prize” of some respectable amount of money – say $500,000 – but in order to collect it, they must pay the taxes, an “entry fee,” or some other charge. Once they pay that, they never hear from the outfit again, although a short year later they may receive the same notice again.
Home Repair scams, as described above. These may be offers to fix the roof, reseal the driveway, fix the broken chimney or the cracked sidewalk (after convincing the victim that they are responsible for keeping the sidewalk in front of their house in pristine condition).
Someone purporting to represent the senior’s bank, credit union, mortgage company, gas or electric utility, or any other business they have patronized in the past, may call and present some (halfway) plausible reason for the senior to pay or pay again a bill they never received on threat to turn their services off, attach their house or harm their family in some way.
A person posing as a psychic or faith healer calls, greatly agitated, saying they have received a sign from “The Lord” to the effect that the senior has an unsuspected brain tumor which will soon prove fatal unless a hefty contribution is made to the caller. (I told you they were creative). If the senior is sufficiently alarmed and cannot immediately connect with advisors, they may let go of a significant amount before they can be stopped.
It is now possible to pay almost any bill online, but some seniors still prefer to write the check, lick the stamp and deposit the envelope in the mailbox, where anyone walking by can remove it.
What should I watch for?
o Bank activity. Your mother wants to go to the bank to close her account. When asked what she needs the money for, she is vague. Any sudden, vague, transfers of money should be suspect and fully investigated.
o Things are missing from the house.
o New signatories to the bank accounts.
o Checks bouncing.
o Checks written to “Cash” for the benefit of the undeserving.
o An elderly person applies (and sometimes gets) a large loan for an unexplained reason.
o Cashing in annuities or selling long-held stocks.
o Unusual or unexplained credit card charges.
o Requests to see the lawyer in connection with will(s) or property title(s).
o Unable to contact: if you live at a distance from your senior, call them often enough that if they should suddenly disappear for a few days, you know about it. Get a neighbor’s phone number also.
o Caretakers who say the senior is asleep every time you call, and deny any knowledge of the senior’s financial affairs. Also, those who ask “MYOB” questions about the senior’s financial affairs.
o Unexplained lumber, roofing materials, or other work equipment around the senior’s house.
o Sudden, unexplained cessation of regular financial documents (bank or credit card statements, etc.) arriving at the house. Make sure they’re not going elsewhere.
To protect themselves from scams seniors or their caretakers should:
Set up a direct deposit for Social Security and any other income if possible;
Keep the checkbook away from the senior if they are not capable of managing their own money.
Try for a new PIN number if you can; if not, speak to the senior about the use of the PIN Number.
Speak to them also about signing blank papers or papers they don’t understand.
Use a safety deposit box for their jewelry and other small valuables. Do not leave these things in plain view in the house.
Get your senior on the National Do Not Call list.
Investigate potential employees carefully, and always get references.
Protect their Social Security numbers and other personal information.
Review fire safety, strangers at the door, what to do if someone tries to break in.
Advise them to check with you before giving to a charity.
What can be done to combat financial abuse?
If you know or suspect that an elderly relative or friend has been scammed, or is about to be scammed, contact the police at once. They will tell you if you need to contact anyone else.
Make sure your family members know about elder financial abuse, including what can be done to prevent it.
If you don’t have a Council on Aging or some other watchdog organization in your hometown, find out why.
As is so often the case, California has stepped right out to help prevent elder financial abuse by instituting further training for police officers, including videotaping preliminary hearings in senior abuse cases, to aid in prosecution. These cases have heretofore been difficult to prosecute.
Counties have added to their crime task forces composed of medical experts and law enforcement, experts in financial matters to help investigate crimes. Legislation now in the works will force bankers to notify authorities when they suspect a senior has been financially abused.