A number of scams bypass existing laws, and there is a need for more tools to help protect older adults from losing their financial stability. In earlier decades, fraud schemes by snail mail and phone scams were limited. Now that digital technology, the internet, email, and social media are pervasive, criminal organizations can more easily defraud the elderly. The cost to a senior’s life is devastating. Fraud continues to become more prevalent through online and phone transactions.
Senior Legislation Efforts
A pending Bill, the Financial Exploitation Prevention Act of 2023, addresses the financial exploitation of older adults. It will allow investment companies to postpone the release of investment funds for up to 25 days if they suspect an investor, age 65 or better, is being exploited. State regulators, courts, and administrative agencies can delay the release longer if necessary.
The bill is awaiting approval in the Senate. It’s a second attempt to find a solution that costs the aging population about $3 billion annually, with average individual losses at $120,000. Older adults experiencing cognitive challenges are most easily exploited. Unfortunately, their family members may steal much more than strangers.
Financial Fraud has Plagued the US Aging Population
In 2020, the largest ever nationwide elder fraud sweep by the US Department of Justice (DOJ) identified more than 260 defendants in fraud, accounting for more than 750 million dollars. In each case, the defendants allegedly engaged in financial tactics that either specifically targeted or mostly affected seniors. Fraud operations are evident in every federal district in the United States.
In one of the most horrific cases, an 83-year-old woman was defrauded of her life savings by her caregiver. She was left with no means to afford her retirement home bills and took her own life.
Financial Scams Take Many Forms
Fraud schemes are creative and involve a number of ways to gain access to personal information and accounts, including:
· Fake drug discount cards
· Remote access to computers posing as technical support
· Grandparent schemes claiming to be relatives in financial distress
· Insurance fees for collecting nonexistent sweepstakes prizes
· Mass mailings
· Money mule fraud
· Fraudulent debt collectors
Elder Fraud in an International Problem
The Office of International Affairs, through the DOJ, has been working with numerous countries to secure evidence and capture defendants. These countries include a network of criminal and civil law enforcement agencies in Belgium, Canada, Europol, the Netherlands, Norway, Spain, the United Kingdom, and the United States. By sharing information and providing avenues for criminal extradition, this international body is a model of cooperation against specific threats that endanger the financial wellbeing of member country’s residents.
How to Protect Yourself or a Loved One from Financial Scams
Education about how fraud operations work is critical. A scammer will try to evoke a strong emotional response in their target to persuade them to part with their money. A senior experiencing high levels of excitement or anger is more susceptible to risky decisions. They should allow 24 hours to pass before making a financial decision. Feeling overly excited or pressured to make a quick decision is a red flag.
One of the easiest ways to avoid scams is never giving out personal information to unknown people or entities. If you’re unsure, do the following:
· Ask for credentials
· Speak to supervisors
· Do a background check
· Get another trusted individual involved
Have systems in place for a trusted family member or financial professional to approve financial transactions outside the scope of your normal daily purchases or bill payments. Also, review any automated deductions in your bank account monthly. Scammers often start with a small withdrawal to see if there is oversight in the account that targets fraud or identity theft.
Resources for Seniors
Consumers can file elder fraud complaints with the Federal Trade Commission online or by calling 877-FTC-HELP. The Department of Justice provides resources relating to elder fraud victimization through the Office of Victims of Crime. Get educated and protect yourself by connecting with a trusted elder law attorney specializing in senior fraud and abuse.