If you watch the nightly news, it seems like nearly every week there is a story about a new fraud scheme that is being used to target seniors. Unfortunately, criminals are getting more and more sophisticated in their tactics, making it difficult to keep up with the latest ways they use both technology and psychology to prey on older folks.
A few of the common schemes financial predators may use to defraud seniors include:
- Phone calls or emails demanding immediate payment of fake fees or fines
- Intentionally overcharging for medical care or other services, or charging for services that were never in fact performed
- Pre-paid funeral or cemetery plot cons
- Recurring charges to credit cards for subscriptions or services that were requested to be cancelled
How common is the crime of elder fraud, and what can seniors and their loved ones do to help guard against these thieves?
A costly and all-too-common crime
Make no mistake about it: While it doesn’t leave physical wounds, elder fraud is a form of elder abuse. In fact, according to the CDC and the National Council on Aging, financial exploitation is the most common form of elder abuse. Research from the Senior Investor Protection Resource Center estimates that one in five people over age 65 have been a victim of financial fraud or exploitation resulting in a combined loss of at least $2.9 billion annually.
A recent report from the Consumer Financial Protection Bureau revealed that between 2013 and 2017, banks and other financial services companies filed 180,000 “Suspicious Activity Reports” on over $6 billion in assets held by seniors, which, unbeknownst to the senior, the bank suspected may have been targeted by fraudsters. In that four-year period alone, elder financial fraud quadrupled.
Looking at these numbers on an individual level, the average fraud loss for people between 70 and 79 years old was $43,000. Sadly, however, not all of the criminals targeting seniors’ money are strangers, and in cases where the older adult knew the suspect, which is common, the average loss was even worse—around $50,000.
>> Related: How to Recognize and Address Elder Abuse
Protecting seniors from elder fraud
Whether the perpetrator is a family member, friend, business partner, or complete stranger, elder fraud is a serious issue in the U.S. and around the world, in some cases causing financial ruin from which the senior can never recover. The severity of the problem prompted lawmakers to pass the Senior Security Act in May, which would create a dedicated task force at the U.S. Securities and Exchange Commission aimed at stopping fraudsters from targeting older Americans.
If you are concerned that your older loved one may be susceptible to financial exploitation or fraud, there are proactive things you can do to help protect them.
- Hold a family meeting, including the senior, to identify what financial accounts they hold, who has access to each of them, and how bills are verified for accuracy and then paid. Be sure to consider how (and how often) the accounts are monitored for any fraudulent activity.
- Identify a trusted family member or friend to make a list of all monthly income and monthly expenses.
- Establish a process to monitor financial accounts and credit cards on a regular basis. It is also wise to periodically review the senior’s credit report to check for any anomalies.
- Take advantage of online banking technology to set up automatic payments for recurring bills like insurance premiums, car payments, or rent.
- Consolidate financial accounts to streamline and simplify the management of senior’s finances, and cancel any credit cards that are not being used.
- Create a power of attorney so a trusted loved one has the ability to manage the senior’s financial accounts.
>> Related: Financial Caregiving: An Important Topic No One Wants to Discuss
What to do if you suspect fraud
Despite even the most diligent prevention efforts, criminals can still find new ways to financially exploit seniors. If you believe that you or a loved one has been a victim of elder fraud, there are several things you can do.
- Notify your bank or other financial institution as soon as you notice any suspicious transactions.
- Contact your local adult protective services (APS) agency to report the suspicious activities or events. You can find the contact information for your local APS agency by using the Eldercare Locator at acl.gov or by calling 1-800-677-1116.
- Contact the Federal Trade Commission at ftc.gov/complaint to report suspected elder fraud scams.
If you would like to learn more about spotting and stopping elder fraud, the Consumer Financial Protection Bureau has a lot of helpful resources, as does the CDC’s website.
FREE Detailed Profile Reports on CCRCs/Life Plan Communities