Scammers manage each year to wrest more than $36 billion from older Americans. And money's not all that may be lost.
The overall price tag can include a hard hit to one's trust for others. Additionally, in some cases, people who have been exploited may no longer be able to live independently.
It's a problem so big that the National Association for Area Agencies on Aging has just released a public education campaign to help people recognize financial abuse, including some of the most popular methods predators use to victimize the elderly.
Most financial abuse of seniors falls into one of three categories: exploitation, fraud or trust abuse, according to Dallas Jamison, communication director of the Washington, D.C.-based association, which they refer to as "n4a" for its acronym, NAAAA.
Often, financial abuse goes unreported, something scammers count on, said Jamison. "Sometimes older people can't remember because they have cognitive impairment, or they don't report because there's so much shame associated with being scammed," she said. "Some may fear if they tell family, they will no longer be able to live independently. There's great fear around that — extremely powerful fear."
An appealing target
Last year, True Link Financial undertook a major study of financial abuse targeting the elderly and found that previous estimates were grossly inadequate. The True Link Report on Elder Financial Abuse 2015 documented more than 12 times the $3 billion in exploitation previously reported.
"What’s more, the highest proportion of these losses — to the tune of $16.99 billion a year — comes from deceptive but technically legal tactics designed to specifically take advantage of older Americans," the report said. True Link researchers believe as many as a third of senior citizens are financially harmed in any five-year period.
The victims the report identified did not match many people's expectations, either. "People often assume that those perceived as most vulnerable — widows, the very old, people with severe memory loss — are at greatest risk. In fact, risk equals vulnerability plus exposure. Seniors who are young, urban and college-educated lose more money than those who are not," it said.
Approachable, friendly seniors are targeted for elder financial abuse, possibly because it's not hard to ask them for money. "Financially sophisticated seniors" are the ones who get targeted for fraud. "Thrifty" seniors also lose a lot; for them the lure may be bargains, said the report.
The average loss from financial exploitation is $120,303, according to the AARP Banksafe Initiative.
Jeff Salter, founder and CEO of Caring Senior Service, based in San Antonio, believes seniors are targeted for financial abuse, including identity theft, more often than other groups because they have better credit, most have paid off the bulk of their debt including homes, and caregivers and family members often have easy access to valuable information that makes theft possible. It's a sad fact that sometimes the exploitation comes from an older person's inner circle of trusted friends or family.
Older people are also vulnerable, said Salter, because they have a high level of empathy and want to help others. So when they get a call saying a grandson is in trouble and needs bail or someone has high medical bills and no one else will help, some of them step up.
It's not hard to see after the fact how some of the exploitation occurred, Salter said. Undoing the damage, though, can pose major challenges.
Summer is the prime season for home improvement scams, said Jamison, so part of the n4a campaign focuses on that exploitation. She’s heard no shortage of stories about someone casing a neighborhood to find a target for bogus, overpriced or unnecessary roof or driveway repairs. Sometimes, seniors are encouraged to borrow money for repairs from specific lenders under terms so unfavorable the home itself may be lost, she said.
People in states that don't require residential contractor licensing should be especially careful about higher contractors "because your legal recourse, should problems arise, may be limited," warns n4a's report, "Home Improvement Scams: Tools to Reduce Your Risk. The brochure offers tips and also says how to make complaints or see if someone else has complained about a home improvement "service."
Financial chicanery may begin in a place where you’d expect people to be trustworthy, like church, said Jamison. Someone is befriended and “helped” and eventually jewelry, cash and heirlooms disappear. She knows a woman with dementia who had her bank account depleted to the tune of $300,000 by a “church friend.”
Or there’s the postal scam: Someone "wins" a sweepstakes, but must pay a small amount to cover processing. Sometimes the processing fee goes up. If one has memory problems, the scammer may hit repeatedly. “Once the door opens, it becomes a tidal wave,” said Jamison, who noted it was the mailman who first became concerned after noticing the volume of sweepstakes mail one woman was getting. Her family found she’d written hundreds of small checks to cover the cost of collecting her "prize."
Some scams come by phone, others in person. The variations are stunning.
N4a's Financial Exploitation: Safeguarding Your Money & Property has a checklist to help people avoid financial exploitation, learn warning signs and find resources to get help if you think you've been targeted.
Salter recommends talking to someone you trust before making a decision, especially if it involves finances.
Close family or friends sometimes commit the fraud. Most often, though, said Salter, they detect it or they try to see no one takes advantage of an elderly loved one. One of the best things families and trusted friends can do is talk before it happens about how fraud can be detected or prevented.
Such conversations may require a delicate touch, because there's some embarrassment or even denial. That's one reason it's an underreported crime. People either won't admit it or they reduce the numbers to minimize the impact, said Salter.
Uncovering an issue may require gaining access to a senior relative's financial records. It's easier to spot problems if the checkbook gets balanced each month, something many have stopped doing since transactions have moved largely online.
Salter also recommends having alerts set up on online accounts, so someone is notified if certain types of transactions occur or if balances sink to a certain point. Report concerns to both the police and financial institutions, he said.
Jamison said people need to support one another — and to look out for neighbors who lack a support network. “Check in with them. Let them know you care, that you’re interested. It’s important that we take care of one another and keep eyes and ears open for this sort of thing,” she said.
If you suspect something, call the police. Other resources include the local area agency on aging. You can find a local one by calling 1-800-677-1116. Most have an ombudsman who can provide information and direction. A state's consumer protection office is also a resource — both to check out a potential scam beforehand and to report one after the fact.
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