Protect Your Elders from Being a Target of THIS
As we age we eventually reach our Golden Years. It’s a point where we expect to do things we couldn’t do earlier in life due to factors such as family, work, or financial obligations.
It’s a time when we hope to continue growing as individuals by pursuing personal interests, hobbies, or even second careers, as our health permits.
If nothing else, old age should be a time that is worry-free, peaceful, and stable, where independence is retained as long as possible.
Unfortunately that’s not how it works out for many…
Seniors: Prime Targets
Some 5.8 million older adults lose more than $37 BILLION each year to financial fraud. That number is expected to soar as baby boomers retire and their ability to manage trillions of dollars in assets declines.
Victims can be left without money to pay for medications, food, and long-term care. Many get evicted. And they don’t even know what’s happening until they’re left homeless.
Someone else has to pay, which usually means family members or taxpayers.
And the psychological and social costs can exceed the financial ones. Scammers convince victims to keep the promised profits a secret. So they don’t tell anyone… not even close family members.
Once they realize they’ve been betrayed, they’re emotionally devastated. And they’re less likely to report fraud because they are embarrassed about being targeted. When a family member is the perpetrator, victims don’t act because they don’t want their dirty laundry out there.
Also, elderly victims might not report crimes because they’re concerned that relatives may think they no longer have the mental capacity to take care of their own financial affairs.
In fact, a study by New York State’s Office of Children and Family Services estimates that for every case reported to authorities, as many as 44 are not.
And it’s not only Nigerian princes who scam the elderly. Research revealed that almost 60% of cases of elder exploitation were committed by a family member.
A small sampling of how telephone pitchers, online scammers, and even people they know and trust steal from the elderly in what may appear as giving consent…
- In Maine a former lawmaker was sentenced to 10 years in prison for defrauding two elderly widowed women out of more than $3 million.
- In Pennsylvania a man whose elderly mother was among his victims of a $1.5 million investment scam has been sentenced to 17 years in prison.
- In California an unlicensed investment advisor faces 35 years if convicted of defrauding $8 million from trusting families and senior citizens.
The FBI cautions that senior citizens are most likely to have a nest egg, own their home, and/or have excellent credit — all of which make them attractive to con artists.
As the Financial Industry Regulatory Authority (FINRA) puts it:
“Financial fraudsters often attempt to evoke strong emotions in their victims to convince them to hand over money, and seniors may be particularly vulnerable to the effects of heightened emotions on decision making.”
Alzheimer’s Makes Them Even Easier Prey For Criminals
Alzheimer’s disease is the most common type of dementia. And it affects up to five million Americans. That number is expected to hit 14 million by 2060.
Symptoms begin with memory loss and possibly lead to loss of the ability to carry on a conversation and carry out daily activities such as handling money and paying bills. They may use poor judgment when dealing with money, giving large amounts to telemarketers and other scammers.
Several factors can cause Alzheimer’s. Including:
- Family history
- Education, diet, environment
- High blood pressure and high cholesterol
There is no cure, although physical, mental, and social activities may reduce the risk of getting the disease.
No Test for Alzheimer’s
Although there’s no single diagnostic test for Alzheimer’s, a recently published study by Rush University Medical Center’s Alzheimer’s Disease Center analyzed 935 folks in their 70s and 80s to determine whether a higher susceptibility to financial scams was an early sign of dementia.
All of the participants were initially free of dementia and were given a questionnaire to test their awareness of scams.
The test had five questions to determine their openness to sales pitches, their attitudes regarding risky investments, and what they knew about scams focusing on the elderly.
Over the following six years, participants had annual neuropsychological tests to check for Alzheimer’s and mild cognitive impairment.
Researchers also performed brain autopsies on the 264 participants who had died during the study.
They found that someone who had scored low on the scam awareness questionnaire had a greater chance of later being diagnosed with a cognitive impairment.
The point here is that a scam awareness test might one day help diagnose Alzheimer’s.
How to Protect Your Older Adult Loved Ones
In an editorial accompanying the Rush University study Dr. Jason Karlawish of University of Pennsylvania Perelman School of Medicine added,
“This problem [financial scams on the elderly] has
the same urgency as opioids and gun violence.”
And Dr. Mark Lachs, co-chief of the Division of Geriatrics and Pallitive Medicine at Weill Cornell Medicine and New York-Presbyterian Hospital, said,
“It’s a public health crisis.”
If you are concerned about a loved one being victimized, FINRA has an easy-to-use tool to determine their vulnerability.
FINRA’s risk meter is meant to see if they share characteristics and behavior traits that have been shown to make some investors vulnerable to fraud.
And if you think an investment being offered smells fishy, FINRA has four-question Scam Meter that could help your loved ones avoid getting scammed.
Also look for uncharacteristic behavior, such as asking to borrow money from you. This could be red flag especially if they were noted for being financially independent all their lives.
Have they given away a large amount, say to another family member, a friend, a religious organization or charity you’ve never heard of? Or was there a complex transaction that’s completely out of the norm, for instance a reverse mortgage when they didn’t need the funds?
Yes, they have the right to do whatever they want with their money. But when suffering from dementia, they may no longer have the ability to judge whether another person has their best interests at heart.
Nor do they understand the consequences of their decisions.
Keep an eye on who calls your elderly loved ones. If you see a large number of telemarketer calls, they’ve likely been scammed at least once. Victims are put on lists that are bought and sold on the black market.
Watch their mailbox, too. Older folks are accustomed to opening, reading, and responding to direct mail solicitations.
And with your loved one’s permission get a free report on their credit from the three reporting agencies. Read them carefully, looking for questionable activities.
What to Do if Scammed…
You can find a government agency that handles the type of fraud involved at https://www.usa.gov/stop-scams-frauds.
And if it was investment fraud, FINRA has an Investment Fraud Victim Recovery Checklist to help your loved one cope with the aftermath.
To a richer life,
— Nilus Mattive
Editor, The Rich Life Roadmap