Senior financial abuse is a growing problem and financial advisors and accountants are best able to detect senior financial abuse, even better than a family member, according to Liz Skinner’s InvestmentNews article entitled “Identifying elder financial fraud.” That is because knowledgeable professionals who regularly review their financial documents are more apt to see changes in spending and investing that even family members might not notice. Seniors may tell their adviser about falling for a scam when they are unwilling to tell their own children. Additionally, financial professionals are generally better equipped to dissuade seniors from unsuitable purchases and investments.
Seniors may be vulnerable to financial fraud because of confusion, forgetfulness, the inherent complexity of financial products, loneliness that makes them more willing to talk to strangers, and a trusting nature.
Seniors are sometimes financially abused by family members, as well as strangers and businesses. Based on reported cases analyzed by MetLife, seniors are defrauded out of $2.9 billion annually year, up from $2.6 billion as of 2008. However, 80% of cases aren’t reported, according to the article, so the true losses are doubtless much greater.
Fifty percent of financial fraud cases involving seniors were perpetrated by strangers, who often look for “flags of vulnerability” such as handicapped stickers on cars, canes or looking and acting confused.
Thirty-five percent were perpetrated by non-strangers, such as caretakers, handymen, friends, children and neighbors. The thieves stole credit cards, forged checks, emptied bank accounts, transferred assets and otherwise “decimate[d] elders’ financial safety nets,” according to the article.
Twelve percent were perpetrated by attorneys, banks, contractors, accountants and the like. Such cases in general involved greater financial losses.
Signs of senior financial fraud include efforts to hide recent financial losses, increased transactions, or requests to change the names on accounts.
Women are twice as likely as men to be victims of senior financial abuse. Women live longer, often alone, and are perceived as more vulnerable.
Rep. Joe Baca, D-Calif., in March proposed the Preventing Affinity Scams for Seniors Act of 2011, which would require financial institutions to train employees and offer services such as special protective bank accounts to older customers, and to report suspected senior financial scams.
Web sites sponsored by the Securities and Exchange Commission, the Financial Industry Regulatory Authority Inc., the North American Securities Administrators Association Inc. and others (investoreducation.org/elderinvest mentfraud) contain resources for fighting senior financial abuse.
Page Perry is an Atlanta-based law firm with over 125 years collective experience representing investors in elder abuse litigation and arbitration. While past results are not indicative of future success, Page Perry’s attorneys have recovered over $1,000,000 for clients on more than 45 occasions.