Financial Exploitation of Older Adults
A recent study estimates that the monetary loss by older adults due to financial crimes and exploitation is more than $2.9 billion a year with approximately two million older adults being exploited. This number only reflects what is reported, hundreds of cases go unreported and unidentified. Older citizens have been shown to be particularly attractive targets for fraudsters for several reasons, including:
- Frequently pay living expenses from savings accounts.
- Monthly income is generated on a set schedule, such as Social Security benefits, pension payments, or life insurance.
- Motivated to take on risky investments or gamble on large “winnings” for a more comfortable lifestyle or for a larger estate to pass on to family members.
- Secluded or isolated to some degree, so attention and companionship is more readily accepted from fraudsters.
- Declining mental health means individuals with memory problems are more willing to go along with a fraudster’s story and are unable to recall prior conversations. Fraudsters tell victims that they failed to complete a promised task or send funds, even if the victims have in fact already complied.
- Funds accessed for any plausible need without oversight or questioning by financial institutions or advisors prior to a mental health decline.
Without interventions by family, community, financial institutions, or law enforcement, the cycle continues until victims are unable or unwilling to pay. Frequently, this happens when victims exhaust their pool of funds from their bank, investment accounts, or mortgages.
How can you help spot older American financial abuse? Look for these warning signs that an older adult in your life may be a victim:
- Unusual activity in their bank accounts, including large, frequent or unexplained withdrawals.
- Desire to wire large sums of money.
- ATM withdrawals on bank statements, but they do not have a debit card.
- Withdrawals from bank accounts or transfers between accounts they cannot explain.
- New people (who may be “friends”) accompanying them places or errands to the bank.
- Sudden non-sufficient fund activity or unpaid bills.
- Confusion, fear or lack of awareness.
- Checks written as “loans” or “gifts” reflected on bank statements.
- Mention of bank statements that no longer go to the customer’s home.
- New powers of attorney the older person does not understand.
- A caretaker, relative or friend who suddenly begins conducting financial transactions on behalf of your loved one without proper documentation.
- Changes to documents, particularly any sudden changes to estate plan documents (wills and Trusts.)
There are a number of ways to help prevent older adult financial crimes. Review these tips with the older adults in your lives to help them steer clear of financial exploitation:
- Register with the Do Not Call Registry (www.donotcall.gov)
- Exercise caution on the Internet by using anti-virus software, vigilant in regards to email links, limit amount of personal information online and through social media.
- Be suspicious of situations that require to send money up front, via a Prepaid card.
- Confirm stories or offers through charities directly through published means of contact.
- Lock up checkbooks, account statements, and other sensitive information.
- Avoid rushing into financial decisions.
- Check references and credentials before hiring aids.
- Sign up for account “alerts.”
- Collect mail promptly or have mail held at the Post Office if you are going to be away.
- Review receipts, bank statements, and credit reports.
- Shred documents that are no longer needed, especially documents containing personal information.
First Bank & Trust is available to discuss response and prevention tips for older adult financial crime. Call us any time at 800-843-1552.