Is Elder Financial Fraud Is On The Rise?
It’s a story we’ve heard repeatedly: an elderly individual has been fleeced out of a large sum of money. In many cases, it was all the money they had, and don’t have a clue on how to get it back.
Americans over the age of 65 are 15% of the general population and hold a considerable amount of wealth. Many elders are particularly trusting of people when they shouldn’t be.
Because they mistakenly trust someone that took advantage of them, they may be too embarrassed to speak up or press charges. In many cases, the victim is dependent on the abuser for their everyday needs, such as a relative or hired caretaker.
Some elders have pensions and investments to pay their expenses, whereas others have on Social Security as their only source of their income. Fraudsters pay no attention to income source or level.
Defining Elder Financial Fraud
It’s simple: when someone acquires assets from an elderly person and uses it for their own personal use, they’ve committed the fraud. This action could be alone or in conjunction with physical, emotional, verbal, or sexual elder abuse, including neglect.
Elder financial fraud is one of the most common forms of elder exploitation, but the least reported. Relatives, caretakers, nursing home staff, and even financial services representatives may be the ones conducting the fraud. Without oversight, an account may be slowly drained, or drained all at once.
This fraud can happen when:
- Someone visiting the elder takes something valuable, such as cash, valuables such as jewelry, medications or other items
- A relative or other individual convinces the elder to invest in a fraudulent scheme, such as stocks or “alternative investments.”
- Someone forges the victim’s signature on checks, records, and other documentation for various financial frauds
- Makes investment decisions in the victim’s name without consent, but generates a commission or other income for the person initiating the transaction
- The victim is fooled into divulging passwords and other personal financial information in a fraudulent email
- A family member or other close individual abuses a power of attorney, or obtains a fraudulent one
- Someone convinces the elder to change insurance policies, especially life insurance
Frequently, the elderly victim has little or no understanding that their financial resources are being mismanaged to their own detriment.
Elder Financial Abuse Is On The Rise
Elder financial abuse was already increasing since 2013. But following the beginning of the pandemic that led to nationwide shutdowns in 2020, all elder abuse has increased even more.
People who have been laid off and caregivers who are experiencing financial hardships that can lead to elder abuse of all kinds. The pandemic has exacerbated these types of situations.
Family members who find themselves with no income may “move back home for a while” until they can find employment are just one method where elders can become victims. Since many elders have a home, income, and savings, they are ripe targets for abusers.
Finding And Stopping Financial Exploitation – Financial Fraud Attorneys
Social isolation in many states kept many elders from their loved ones, increasing the possibility of fraud. Physicians and other medical personnel may be their only outside contacts. They may be the first to notice any kind of abuse, and the only opportunity for the elder to be helped by intervention.
Elders with someone they know they can trust handling their financial affairs have a better chance of being protected, as well as someone detecting and stopping the fraud.
Elder Financial Fraud Attorneys
Bank employees and other financial services representatives may also witness financial abuse, bur may not immediately realize it. For instance, when the employee tries to speak with the elder, but is cut off or overridden by an accompanying caretaker or relative, or not allowed to speak to the employee alone, the bank may report this interaction to authorities for a welfare or other check.
Many larger banks have also implemented more sophisticated fraud detection and prevention aimed at automatically flagging transactions and other actions that may appear suspicious. Using artificial intelligence (AI) coupled with machine learning, potentially fraudulent transactions can be detected and stopped long before an employee notices something is amiss.
BankSafe is an AARP-sponsored training initiative along with Virginia Tech that trains banking professionals to spot potential elder financial fraud and work to stop it. Results from the initial training were significant:
- BankSafe trainees were able to prevent more than $1M for elderly customers—a rate that was 16 times higher than the control group without training
- The training included videos, skill-testing and real-life situations to help employees recognize the signs. The training helped increase bank employee’s confidence in seeing, preventing and reporting suspected fraud four times more than employees who did not take the training.
- One trainee prevented a customer from losing $500,000 to a fraudster
You can find the list of financial institutions that are BankSafe on the AARP’s website.
How To Contact A Financial Fraud Attorney
If you have a parent or other elderly relative, you may be the only thing standing between them and a fraudster. While most people think it’s a stranger doing the exploitation, studies show that 66% of elder financial fraud is committed by someone they know.
It’s important to have the conversation with your relative if you haven’t already. Although it’s a difficult conversation, it’s far easier than trying to decipher why money, checks, or their debit card has gone missing, or how they were “just helping out” someone.
The first order of business (if it has not happened already) is to make sure your relative has direct deposit instead of receiving checks in the mail. That reduces the possibility of checks stolen and cashed by someone else.
You can go to your elder’s bank and sign a “trusted contact person” form so that you are the individual contacted in the event of suspicious activity. This is a rule implemented by the SEC from a FINRA rule, and gives financial institutions the option to put holds on transactions where there is a “reasonable belief of financial exploitation.” The firms are also required to make an effort to find that trusted person in the event of suspicious activity. It does not, however, allow the trusted person to engage in any activity, including conduct transactions, or otherwise act on the person’s behalf.
It’s also a good idea to work with an attorney to have a power of attorney in place to manage and oversee finances in the event that the elder relative is no longer able to do so.
One paid option is a service called EverSafe, a monitoring service that, once set up, analyzes the elder’s financial history and spending patterns, identifies anything unusual, and alerts you—or multiple family members you select—when something isn’t right. The company also offers help when a problem appears as well as assistance to resolve it. The service works whether you live in the same area, or across the country.
Silver Law Fights Elder Financial Fraud
Silver Law Group represents investors in securities and investment fraud cases. Our lawyers are admitted to practice in New York and Florida and represent investors nationwide to help recover investment losses due to stockbroker misconduct. If you have any questions about how your account has been handled, call to speak with an experienced securities attorney. Most cases are handled on a contingent fee basis, meaning that you won’t owe us until we recover your money for you. Contact us today and let us know how we can help.