Elder Financial Abuse – 5 Ugly Scams
5 Ugly Scams About Elder Financial Abuse
One of the very worst scams committed against the elderly today is elder financial abuse, and it appears to be getting worse. Practically every day now, we read about some form of cybercrime and its effect on society in general. Ransomware attacks were made on an oil pipeline in the U.S. and a few days ago, an attack against a meatpacker in Australia.
During 2020, the number of cybercrimes reported to the FBI were a record amount, both in number and in the dollar amount of financial losses. Over one-half of these were committed against people over the age of 50. Data obtained from the FBI showed that Americans over the age of 50, on average, lost nearly $5 million every single day to cybercriminal thieves. These are staggering figures with no sign of improvement.
If we’re to protect our loved ones from elder financial abuse, our first step must be awareness. What types of scams are being committed against our senior population? Fraud comes in many different forms, but the following 5 scams are targeted against our senior citizens the most:
- The romance scam – Many seniors feel a strong need for companionship, and this is exploited by a criminal. Either by telephone or computer, they appeal to this need by pretending to be a possible romantic partner. Even before Covid came upon the scene, many seniors fell for this scam.
Now, after being confined to their homes, and the effects of isolation, they are easy targets, and soon, part with their money.
- The person in need scam – A criminal will pretend to be some loved one, like a grandchild, who is having some emergency, and in need of money right away. One of my elderly clients sent one of these criminals $5,000 last year for an alleged grandson put in jail in Brazil.
- The investment scam – This one is so common and yet it still works. Have you ever received those e-mails from an online brokerage promoting a certain security that has a guaranteed yield of 20% and up, or maybe it’s going to double in value in 2 weeks? You need to sign up and buy quick before the word gets out.
- The fraud investigation scam – This one is usually done over the telephone and has many, many variations. A criminal posing as a law enforcement official, is investigating the bank where your money is, and needs to verify all of your personal information. For some reason, the elderly fall for this one quite often. It’s one of the worst forms of elder financial abuse.
- The technology scam – A criminal calls you and says he’s on the technology support team at your bank and needs your help. He tells you that he needs remote access to your computer to correct a problem that could expose your financial information over the internet.
Who are these fraudsters?
When it comes to elder financial abuse, it isn’t always a nameless criminal at work from a foreign country. The Office of Financial Protection for Older Americans issued an alarming report whereby the victim of financial abuse knows the perpetrator personally in about 40% of the cases.
Those who are caregivers should be especially vigilant and make it a group effort. Bring other family members into the group and don’t let just one person handle everything. Many banks will allow you to place various types of alerts on the accounts too. In that way, you can bring the financial institution into the picture too.
How can caregivers protect senior loved ones?
As a caregiver, you’re naturally concerned about your loved ones. The following checklist will give you some guidance on ways that you can protect their interests:
- Talk to them about the various scams being perpetrated against the elderly. Find out what their investment goals are as well as their general attitude towards money. This should give you clues if you recognize any irregular behavior in the future.
- Set up a list of designated and trusted contacts. Make sure their financial institution and/or investment advisor know who to contact in the event of any suspicious behavior or changes in health, especially memory.
- Get all financial information organized and safely stored. This would include wills, powers of attorney, trusts, bank and broker statements, insurance policies, and especially beneficiaries. After all this information is organized, be vigilant.
- Check in with your loved one and review all financial documents on a regular basis.
- When you meet with them, pay close attention to what they say, listening for certain phrases that may signal trouble. These are “people are always asking me for money”, “I don’t understand financial decisions that someone else makes for me”, and “my bills are confusing to me”.
- Be on the lookout for certain behavior that may be a red-flag. Some of these are unpaid bills backing up, sudden changes to some financial documents, and new friends or sweethearts. Any confused behavior should be especially looked into.
There’s a lot of information readily available to educate yourself on ways to protect a senior family member from elder financial abuse. The U.S. Department of Justice is a good source and most states have a department set up for this purpose as well.