Steps to take to avoid elder financial fraud and abuse
Elder financial abuse has become a persistent problem as cases of senior fraud in 2018 reached nearly 25,000.
According to the National Council on Aging, estimates of elder financial abuse and fraud costs to older Americans range from $2.9 billion to $36.5 billion annually. With 10,000 Baby Boomers reaching retirement age every day, the problem can only get worse.
What can older populations do to protect their assets from scammers? How can their children help to recognize the signs of senior fraud before it’s too late?
Dr. Erika Rasure, assistant professor in the online MBA in financial services program at Maryville University discussed with Fox Business what you need to know to keep the aging population’s pocketbooks safe.
Boomer: What are the warning signs seniors are being financially abused?
Rasure: In general, financial exploitation among seniors can be hard to spot, and it can occur as stand-alone financial abuse or financial abuse that co-occurs with other types elder abuse. One of the biggest red flags of financial exploitation is unpaid bills related to living expenses.
This is something that is seen often, for example, with seniors who are living in nursing homes—where money from social security, meant to pay for their living expenses is misappropriated by family members. If you notice this, pay attention. Other signs include money mysteriously going missing from accounts and notice if there is money--or control of money or assets-- being given to people who are new to your senior’s life.
Boomer: If I suspect a family member of abusing a loved one, what can I do to protect their assets?
Rasure: Due to the slightly more ambiguous nature of financial exploitation, this type of abuse is often under-reported and under-prosecuted. If you do believe that there is some type of financial abuse occurring—for example, you believe someone is cashing a senior’s social security check and is not a legal guardian--please do not hesitate to report your concerns to social service providers and/or law enforcement to help step in and stop the exploitation in its tracks.
In some cases, investigation can lead to establishing a guardian or conservator to manage assets. Taking steps to ensure that a proper advance directive is in place authorizes an agent to assume responsibility on behalf of the senior can prevent financial exploitation from occurring —and in the event the agent misappropriate assets, a civil suit can be filed. You can also contact FINRA to report suspicious investment activity or behavior and financial institutions to restrict activity.
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Boomer: Who can we go to for support if we suspect loved ones of being scammed?
Rasure: Make sure that you understand first that one of the most important things concerned family members and friends can do is offer lots of support to the victim of financial abuse. Let your loved ones know that you are here for them, as they may feel embarrassed, betrayed, or ashamed that it happened—emphasize that it’s not their fault.
First, because financial exploitation cases take a long time to investigate, require evidence that is harder to produce, and the financial institutions and elderly victims involved are often uncooperative. Secondly, prosecution is more likely when the elderly person had strong family or friend support the victim’s cooperation to encourage the elderly person to pursue prosecution. This includes support all the way from the beginning stages of pressing charges through more trying elements of prosecution like testifying in court.
In addition to social services and law enforcement, The National Center for Elder Abuse is also a tremendously helpful resource to help facilitate a support network for not only the victim, but also friends and family who are helping the senior rebuild and recover from financial exploitation.