According to Consumer Reports, approximately 500,000 senior citizens lose over $36 billion each year to scammers who target them for financial abuse. Despite the widespread problem and illegality, only 5,000 confirmed cases were reported last year to states. With the population of America aging, authorities expect the problem to grow even worse and hope to bring more awareness to the problem.
Generally, senior citizens are victims of financial abuse by someone who they trust, or someone who pretends to be in a position of trust. In one of the several examples cited by The Daily Item, a convicted felon posed as a licensed building contractor and convinced an elderly woman that she could take a home equity line of credit to finance an expansion. Then, after performing some of the necessary work, claimed he located asbestos and would need more money to continue with the project. As the made-up excuses kept piling up, the felon continued to demand more money from the woman. In a victim statement to a court last year, the elderly woman said she lost over $100,000 and her home was in significantly worse shape. In another example cited by the online newspaper, a man wired money to an unknown bank account after receiving a call from someone pretending to be a federal agent from the Internal Revenue Service.
Perhaps the saddest examples involve caregivers and family members who take advantage of their position of trust, though. These lawbreakers use the trust placed in them to take care of an elderly relative or friend and choose to exploit them for their own financial gain. These scams, which can effectively ruin the financial well-being of a vulnerable citizen with lost homes, life savings, and pensions, are often deeply humiliating and shameful for the elderly. For this reason, the victims of these crimes often fail to report it to authorities.
In an effort to combat financial abuse of the elderly, Consumer Reports suggest family members take preemptive steps to lessen the likelihood their parent or loved one will become a target, which could include:
1. Talking to a loved one about money, how their bills are paid, and who they have contracted with to perform any necessary services or healthcare.
2. Setting up checks and balances, which could include making sure senior citizens have essential legal documents to prevent any financial abuse, such as a will or power of attorney which will serve as a legally binding document in the later years of a person’s life.
3. Streamline the finances of your loved one, which could include making finances more manageable with automatic bill pay or consolidating accounts when possible. It is important to speak with a financial planner before moving money, since there may be consequences in some circumstances – such as shutting down an IRA.
By taking these steps, family members can help limit the possibility that their elderly family member will become a victim of the rising epidemic of elder abuse.
