A Focus on Eliminating Elder Financial Fraud


We can all help eliminate financial fraud of the elderly. The elderly are common victims of financial fraud. Family members should be alert to warning signs that may signal a problem. Warning signs may include failure to pay bills, unopened statements from brokerage accounts, statements from a brokerage account the family was previously unaware of, mail boxes stuffed with sweepstakes offers, or a new “friend” providing financial advice. (“Warning Signs of Financial Fraud,” by Tom Lauricella, Wall Street Journal).

This can be a very touchy area, but family members who detect a problem should not be dissuaded or surprised by a lack of understanding or cooperation by the victim. A person with some dementia (or a condition like polypharmacy or depression that can mimic dementia) may seem to be within the normal range for his or her age in most respects, but may be completely irrational and in denial about certain behavior, such as involvement in sweepstakes scams.

The elder victim may show some awareness that something is wrong, yet recoil from cooperating with efforts to do something about it because of fear of losing their independence.

An even more difficult situation may arise when the abuser is a family member or a trusted friend ? perhaps a member of the victim’s church, a veterans group, or an accountant.

“Seniors are going to be affected by every kind of fraud, because they tend to be the ones that have the savings and the cash,” Matt Kitzi, Missouri’s securities commissioner, was quoted as saying.

Patty Struck is the head of Wisconsin’s securities division, which frequently is called upon to investigate fraud among older adults. She says that prevention starts with being vigilant, and relates the following example.

Several years ago, Ms. Struck’s office received a call from a man who was concerned about his father’s financial adviser. The son had learned that the adviser was helping the father take out a mortgage loan on the father’s house. The adviser had even driven the father to the bank to help him fill out the loan paperwork. It turns out the adviser was looting the accounts of not just the caller’s father, but also his grandmother’s and others, as well.

“It’s all about reading between the lines and asking a lot of questions,” Ms. Struck was quoted as saying. She says that concerned family members should try to get the elder to talk about their finances, and do some detective work looking for indications of fraud, such as an unexpected name on an account statement, unusual transfers or big checks being cashed.

If a financial adviser is involved, go to BrokerCheck at the website of the Financial Industry Regulatory Authority (finra.org) to see if a broker has a record of regulatory actions and customer complaints. Other fee-based background checks are also available to the public these days.

“Transparency is the key,” said one elder advocate, adding: “Undue influence and exploitation only happens if no one else is aware of what’s going on.”

Page Perry is an Atlanta-based law firm with over 170 years of collective experience maintaining integrity in the investment markets and protecting investor rights.