Research suggests nearly 40% of American seniors may experience financial abuse
Across the U.S., millions of seniors each year become the victims of fraudulent financial and investment scams. In fact, one recent survey reported that 37% of senior caregivers said their client had been a victim of financial fraud or abuse – and alarmingly, 40% of caregivers surveyed said that their client had been victimized more than once. The perpetrators, many of whom are family members, often take advantage of a senior’s reduced mental capacity in order to persuade or pressure them into making serious financial mistakes.
To fix this problem, a variety of organizations, including state governments and nonprofits like AARP, have started initiatives to expand education for seniors, improve awareness and reporting among financial and healthcare workers, and increase the severity of punishment for those found guilty of elder fraud.
Government, educational, and nonprofit organizations have been taking steps to combat senior fraud
Estimates suggest that U.S. seniors lose nearly $40 billion a year to financial fraud and abuse. And while many believe the problem has been getting worse, others think that important progress has been made, especially by nonprofit and governmental groups aiming to combat the problem. Part of that progress involves the success of both public and private programs that aim to help educate seniors about the risks of financial fraud and how to avoid becoming a victim. In many ways, preventative education is the most effective way to combat elder financial fraud. No matter how strict the laws are, if seniors aren’t educated, they’ll still be vulnerable to a variety of threats.
Senior fraud prevention and financial education programs vary greatly in size, type, and scope. Some programs simply involve online articles, videos, and other informative content, while others are decidedly more interactive. One program, created by a Los Angeles acting troupe, involves a traveling theatre show that ‘acts out’ common financial scams and financial abuse scenarios in order to help the audience understand the specific language and techniques that fraudulent individuals use to hoodwink their victims.
Attorneys say seniors should consult friends or family members before giving out information over the phone
Fortunately, it doesn’t take much for seniors to begin protecting themselves from financial fraud, and attorneys have a few tips:
- Hold periodic financial meetings with multiple family members in order to sort through your personal finances, ask questions, and make sure any irregularities aren’t due to fraud or abuse.
- Choose a “financial caregiver” – a close friend, relative, or professional who can devote time to helping sort through your personal finances (it should not be the same person as a regular caregiver). Make sure this person is responsible and has a good hold on their personal finances.
- Background check and research workers before hiring them, especially home caregivers.
- Research all brokers and financial advisors before hiring them (Use FINRA’s BrokerCheck and other, similar resources).
- Before giving money or credit card, bank account, driver’s license, and social security numbers (or other personal info) out on the phone, contact a trusted friend or relative. Even if the person or organization you’re speaking with seems completely legitimate, they may not be.
Organizations find educating workers at every level of the financial industry is essential for reducing fraud
When it comes to combating senior fraud on the corporate level, the issue isn’t just the responsibility of high-level financial executives; it’s also essential that everyday workers in the financial industry understand the warning signs of senior financial fraud and abuse. For example, bank tellers, brokers, and call center operators can be trained to keep their eyes open for suspicious activity or irregular patterns. This could include evidence indicating a senior is being forced to make major financial decisions under duress. Alternatively, it could be another person calling on behalf of or simply attempting to impersonate a senior they are attempting to steal from.
In order to address senior financial abuse, significant worker training is needed. Some of this training comes from independent non-profit programs, such as AARP’s Bank Safe program, an online education program which can help train the staff at financial institutions to detect fraud as early as possible.
In addition to training, many organizations are now employing technology to detect financial irregularities that could indicate fraud or financial abuse, including software that alerts bankers when someone attempts to withdraw a large sum from an account at once. These kinds of programs can often delay suspicious transactions in order to give the bank time to verify the identity and true intent of the customer.
New state laws and regulations aim to decrease the prevalence of elder fraud
Despite these positive strides, many victims are finding that laws about senior financial abuse may not require financial institutions to make especially strong efforts to prevent fraud. But despite what some consider the lack of thorough, universal regulations regarding elder fraud, a variety of new laws are slowly changing things. In particular, many recent regulations are beginning to require that bankers, broker/dealers, investment advisors, and other financial professionals report signs or evidence of elder abuse to authorities.
According to the National Conference of State Legislatures, in 2015, “23 bills or resolutions were adopted or enacted” to help prevent elder financial fraud. Some of the laws work to increase punishments for those found guilty of fraud, while others increase mandatory training requirements for financial industry workers, such as brokers and financial advisors. Other rules tackle specific financial products, such as annuities (which are often aggressively marketed to seniors), by increasing minimum death benefits, and mandate that elder personal assistants and other home health care workers report suspected cases of elder financial abuse.
Efforts from a variety of organizations are working to contain the growing problem of elder financial abuse
With around 10,000 individuals turning 65 in America each day, elder financial fraud has the potential to become far worse than it already is. Lack of education and an increasing number of victims make it all too easy for both professional criminals and unethical professionals to take advantage of seniors, especially those suffering from dementia and other types of cognitive decline. However, if organizations like state governments, nonprofits, and for-profit firms continue working together, they just may be able to stem the tide of elder financial abuse. To do this, they’ll need to continue helping seniors by both educating them about personal financial safety and harshly punishing those who would victimize them for profit.
If you or a loved one has been the victim of elder financial fraud by an unethical broker or investment professional, contact the Silver Law Group. Our attorneys are leaders in the field of securities arbitration and we represent individual and institutional investors across the United States who have lost money at the hands of a trusted financial advisor. Our services are provided on a contingency-fee basis, which means we are only compensated if there is a recovery of losses. Contact us for a complimentary consultation about your situation.