The number of financial scams targeting seniors is dramatically increasing according to a survey conducted by the non-profit Investor Protection Trust. “Swindles targeting older Americans are a bigger problem today than ever before,” Don Blandin, president and chief executive of Investor Protection Trust, was quoted as saying (See “Survey reveals alarming rise in financial abuse of the elderly”). The survey received responses from 763 participants, including 76 state securities regulators and 77 financial planners, as well as medical professionals, social workers, caregivers, law enforcement officials and legal experts.
Almost 60% of those surveyed indicated that they encounter elderly victims of investment fraud “quite often” or “somewhat often.” Nearly all said that the problem of financial exploitation of the elderly is “very serious” or “somewhat serious” and 84% said it was getting “much worse” or “somewhat worse.”
Senior citizens lose about $2.9 billion annually to scams and other abuses, according to the article, citing a June 2001 study by MetLife Inc. Investment advisers and brokers often notice if their client is declining mentally. In addition to apparent deterioration of memory and cognitive abilities, warning signs may include failure to pay bills, unusual risk taking and abruptly ceding control of their finances.
Financial advisers “have a duty and responsibility to report [abuse] to the authorities, and they have some personal liability if they don’t,” said Robert Lam, chairman of the Investor Protection Institute and chairman of the Pennsylvania Securities Commission. Lam added: “The results are often devastating, depriving older Americans of the opportunity to enjoy their golden years.”
Family members and professionals also need to remain sensitive to a relative’s or a client’s deteriorating abilities and, when appropriate, take action to protect that person from becoming a victim of financial abuse. It is very sad to see a lifetime of hard work disappear at the hands of a scam artist.
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.