Financial Fraud is the our country’s fastest growing form of elder abuse. Financial elder abuse is when someone illegally or improperly uses a susceptible senior’s money or other property. Financial abuse of an elder can be both a criminal and civil matter. Most states including Louisiana have made financial elder abuse a crime and punish the scammer.
Elder financial abuse is tough to fight, in part because most cases do not get reported. Many elderly victims are often too confused, scared, or embarrassed by the crime to report it. A recent study estimated that there are at least 5 million cases of elder financial abuse in the United States, but law enforcement only learn about 1 in 25 cases.
The reason that elders are often targeted by scammers is because people over the age of 50 have characteristics that make them easier targets for abuse. In general, people in this age group expect honesty in the marketplace. They also control over 70% of the nation’s wealth. They are also less likely to take action when defrauded and are less knowledgeable about their rights in an increasingly complex marketplace. People over 50 are more likely to be home than their younger neighbors, they are often within easy reach of devious telemarketers and home solicitors. They target elders that they perceive as vulnerable because they are isolated, physically or mentally disabled, unfamiliar with handling their own finances, or have recently lost a spouse.
These scam artists often pose as trustworthy helpers. They can be strangers, like telemarketers or salesmen, or have a relationship with the targeted victim such as a friend, family member, or caregiver. Elder abusers who are family members often have money troubles that may be made worse by unemployment, gambling, or substance abuse problems. Some scammers can be tough to catch because they appear to have the legal authority to act including powers of attorney or other documents that appear to grant authorization.
Financial Scams perpetrated against older people include a broad range of conduct from outright taking money or property to forging a signature on a legal document, such as a will or a deed, to getting paid for care, products, or services and then not providing them.
The best way to protect yourself or your loved ones from elder financial abuse is to become familiar with the most common scams and learning what to do if you suspect foul play.
Keep an eyes out for these common scams!!
- Telemarketing or mail fraud
- These scammmers take in around 40 billion a year! Around 80% of the victims are 50 or older. Scammers use the phone to conduct investment and credit card fraud, lottery scams, and identity theft. They also sell seniors goods that either never arrive or are worthless junk.
When you get a call from a telemarketer, ask yourself:
- Who’s calling and why?
- What’s the hurry?
- If it’s free, why are they asking me to pay?
- Why am I “confirming” my account information–or giving it out?
- What time is it? (The law only allows telemarketers to call between 8 am and 9 pm)
- Do I want more calls like this one? (If not, then call and register your phone number on the National Do Not Call Registry)
- Getting unauthorized access to funds. In “Sweetheart Scams,” alleged suitors woo older people, convincing them that love and care are their motivations for being included on bank accounts or property deeds. These so called suitors usually disappear along with the property
- Charging excessive amounts of money. Smooth talking scammers first convince seniors that they need some goods or services, then seriously overcharge them-often hiding the high cost in extravagant schemes involving interest and installment payments. This tactic is often used for products that many older people might find essential to their quality of life, such as hearing aids and safety alert devices.
- Selling bogus items. Among the most egregious of false sales ploys is dubbed “Rock in a Box.” In them, a senior is sweet-talked into buying an item, such as a new television, at a bargain price, that comes in a box that is suspiciously sealed. What the box actually contains is a well-padded rock.
- Getting money or property through undue influence. Many seniors have been duped into parting with their homes or other property because a scammer convinces them it is for their own good. In one infamous case, three officials from the Detroit based Guardian Inc. were found guilty of embezzlement and fraud after selling a client’s house for $500– to the mother of a company official. The company also collected excessive fees from its clients, sometimes as high as 70 percent of their social security.
- Using fraudulent legal documents. Many scammers cloak their actions in legal authority, procuring a power of attorney or will or other legal document giving them access to a senior’s property. They get seniors to sign these documents by lying, intimidating, or threatening the seniors.
- Making pigeon drops. In a typical pigeon drop, two suspects approach an older person- often in a retail shopping area or near an ATM machine–and claim the have just found a package or wallet containing a large amount of money. One of the suspects volunteers to check with a “boss” offsite to get advice on what to do with the found money, then reports that it came from an illegal source such as gambling or narcotics. The scammers offer to split the money, but only after the older persons shows “good faith” by producing money of his or her own. When the scammers send the senior to the “boss” to get the promised share of the money, the senior discovers that there is no boss and the suspects have disappeared.
- Faking an injury scenario. In this situation, a scammer claims to have a connection to law enforcement and tells an elder that a child or other close family member has been seriously injured or is in jail. The scammer then convinces the senior to give him or her money for medical treatment or bail.
- Offering false prizes. A good example of this is the “You have won the lottery” scam operating out of Canada. In this scam, thousands of older people were bilked into believing they became wealthy overnight, but had to wire money in “fees and taxes” before they could collect the grand prize.
- Doing unsolicited home repair work. Typically working in teams of two or more, scammers scour neighborhoods with a high concentration of older residents, or even track recent widows and widowers through obituaries and death notices, then appear on their doorsteps claiming to spot something in need of fixing. The scammers demand payment upfront, and then often claim that their initial investigation reveals a more serious problem, with a more expensive solution. The “work” they do is unlicensed and often shoddy, such as applying paint to a roof to make it appear as if it has been tangibly fixed.
- Telephone Scams. Recently, there have been a number of scams that originate overseas. There are many versions of the scam. One version involves a person with a foreign accent will call a victim’s phone making claims that the victim owes the IRS money. They claim if the victim does not pay the money that is allegedly owed, a police officer will arrive to arrest them. These scammers even call from numbers that appear to be from Washington D.C. Note that the IRS will never: 1) call to demand immediate payment, nor will the agency call about taxes owed without first having mailed a bill; 2) demand that one pay taxes without giving you the opportunity to question or appeal the amount they say you owe; 3) require one to use a specific payment method for your taxes, such as a prepaid debit card; 4) ask for credit or debit card numbers over the phone; or 5) threaten to bring in local police or other law-enforcement groups to have one arrested for not paying.
What are the indicators that elder financial abuse is occurring?
Indicators are signs or clues that abuse has occurred. Some of the indicators listed below can be explained by other causes or factors and no single indicator can be taken as conclusive proof. Rather, one should look for patterns or clusters of indicators that suggest a problem.
- unpaid bills, evictions notices, or notices to discontinue utilties
- bank statements and canceled checks no longer come to the elder’s home
- New “best friends”
- Legal documents such as power of attorney, which the elder person did not understand at the time he or she signed them
- unusual activity in the elder person’s bank accounts including large, unexplained withdrawals, frequent transfers between accounts or ATM withdrawals
- the care of the elder is not commensurate with the size of his or her estate
- belongings or property is missing
- a caregiver expresses excessive interest in the amount of money being spent on the elder person
- absence of documents about financial agreements
- implausible explanations given about the elderly person’s finances by the elder or the caregiver
- the elder is unaware of or does not understand financial arrangements that have been made for him or her
What do you do if you suspect financial elder abuse?
REPORT IT! You should report it immediately or as soon as possible by telephone call, and then follow up with a written report. The law requires you to make a report to Elderly Protective Services or the District Attorney’s Office if you have reasonable cause to believe an older person is being abused or neglected by a care giver or by himself/herself (the law recognizes the attorney-client privilege and the minister/priest-penitent privilege as the only exceptions to the rule that everyone has a duty to report abuse of older people). You can also call the toll-free Elderly Protective Services Statewide Hotline at 1-800-989-4910.
How to prevent financial elder abuse?
When it comes to your finances, deal only with people you have known for a long time and with companies or organizations with proven track records. Get everything in writing! Never accept a verbal promise or assurance if money or property is involved. Rarely will you benefit from mistakes or misunderstandings. DO NOT sign anything without carefully reading it and never feel pressured to sign or make a decision before you are completely satisfied that the outcome will enhance you future quality of life. Remember the old adage, if it sounds to good to be true then it probably is! If something does not sound legitimate then do some research. A quick internet search, a phone call to a trusted loved one, or the Better Business Bureau might save you from financial ruin. Take your time!! Remember, it took a lifetime of work and sacrifice to build up your estate and you can lose it all with one stroke of a pen.