Financial Abuse of Elders Growing More Common, More Costly
Elder financial abuse is even more widespread and more costly than experts had believed – and the incidence of abuse appears to be rising fast. That’s the conclusion from a surprising and disturbing study we read about late last year on the financial website of Time magazine. You can click here to read this important article – and if you’re a senior, or if there’s a senior friend or loved one in your life, you definitely should. This information, while a few months old, is still very timely, and we consider it vital for you and your loved ones to know.
In 2014, Allianz Life surveyed caregivers and estimated then that about 20% of senior adults had experienced financial abuse, including various forms of fraud, scams, and identity theft. That statistic was bad enough. However, when the company repeated the survey in 2016, the number of victims had skyrocketed to 37% of all senior adults, or about three of every eight seniors. To make matters worse, many if not most seniors don’t want to talk about their financial victimization, silenced by guilt, shame and fear. “Most people think it will never happen to them,” says AARP’s Debra Whitman quoted by the Time article. “But it does. And it does on a daily, hourly basis.”
The average loss for those victims of elder financial abuse is a staggering $36,000, with some data showing even larger losses. Sadly, the dollar loss – from which few seniors will ever recover – is only part of the trauma of financial fraud. Even smaller financial losses, says AARP’s Whitman, “can have cascading impacts on financial security and stability and even their health.” Many scam victims suffer emotional and mental trauma from their experience, and for some the fraud and accompanying sense of stress, sadness and shame trigger early mortality. Financial abuse of older Americans truly can be a life or death issue.
The Time article points out that the rise in frequency of Alzheimer’s disease and other forms of dementia is part of the problem of financial fraud. Alzheimer’s disease now affects nearly 5.5 million Americans, a number which is expected to double by 2050, and even those in the earliest stages of the illness can lack the ability to manage finances well. But Time goes on to say that, “even without dementia, the aging brain may have trouble making sound financial decisions.” According to geriatrics expert Mark Lachs of Weill Cornell Medical College, “Many older Americans suffer a pattern of imprudent financial decision making known as ‘age-associated financial vulnerability.’” Lachs calls this a “defined pattern” of making unwise decisions when it comes to money, decisions with lasting negative consequences.
Since the Time article appeared, this article on the same topic was published on the website of Forbes magazine. It listed four warning signs, or risk factors, that increase the likelihood you or someone you love may be a potential victim of financial abuse. The first is poor physical health which may tend to cause a senior to be less diligent about their finances. The second, as we mentioned above, is the increasing prevalence of cognitive impairment. The third warning sign is difficulty with the activities of daily living, and the fourth is social isolation. Put these four together and you have a senior who is frail, confused, vulnerable and alone, a combination that greatly increases the odds of financial victimization.
Unfortunately, with so many scam artists and criminals trying to separate seniors from their money, there are few simple answers to the escalating problem of elder financial abuse. Some of the common-sense basic methods of protection are more important than ever these days, and if you’re a child, caregiver or friend of a senior, you may have to be the one to help implement these safeguards. For example:
- Don’t answer the phone, especially if you don’t recognize the number on caller ID.
- Even if caller ID seems innocent enough, screen your calls before saying hello.
- Never give out personal information over the phone – hang up.
- If the caller claims to be from a known company, you can always call the customer service number on your bill or statement, and verify that the call is legitimate.
- The same precautions also hold true for emails.
What about giving a trusted family member access to your accounts as a way to guard against fraud? This might be a good option, but you still need to be cautious, since financial abuse of elders can often take place at the hands of those closest to you. We recommend you contact us here at AgingOptions and let us review your situation and suggest some solid precautions. It’s possible, for instance, to allow a trusted person to have “view-only” access to your accounts so they can see unusual activity and alert the bank without having direct access to your funds. No matter what, it’s essential that we all begin to take financial abuse of elders even more seriously. The financial security, even the very life of someone you love may depend on it.
Are you starting to take the challenge of retirement planning more seriously? We hope so. Heading into your retirement years without a solid plan is a recipe for disaster. At AgingOptions we offer a type of retirement planning that is unlike anything else we know of – a comprehensive plan called a LifePlan that encompasses far more than mere financial planning. With your LifePlan in place, not only will your financial security be assured, but all other aspects of retirement living will be included in one comprehensive plan: legal protection, housing choices, medical coverage and family communication. LifePlanning is the key to a secure and fruitful retirement future!
Find out more about this breakthrough approach to retirement planning by attending one of our free LifePlanning Seminars. We offer these throughout the Puget Sound region, so click here for dates, times, locations and online registration . If you prefer, you can contact us during the week and register by phone. If you’re a senior, bring your spouse and adult children – this information is important for everyone. We’ll look forward to assisting you as you plan for a retirement that is fruitful, rewarding and secure.
(originally reported at http://time.com/money)