Elderly people are vulnerable to fraud and financial abuse. There are many reasons: isolation, weakening mental and physical condition, memory loss and lack of knowledge about today’s markets and technology.
According to New York State Elder Abuse Prevalence Study, only 1 out of 44 cases of financial abuse is reported, usually because the victim is too ashamed to report the incident. Even in 2010, the estimated cost of financial exploitation against seniors was $2.9 billion. This number is only expected to increase, as the number of baby boomers is growing and perpetrators are becoming more sophisticated.
The types of financial crimes against the elderly are varied. The few that I have seen personally include the following.
1. Computer Access: A senior gets a phone call from a person pretending to be a representative from a computer company. The senior is told that his computer is infected and is asked to provide his password in order for the company to ‘clean out’ the virus. Once the perpetrator gets access to the computer, sensitive information is stolen.
2. Bank: A senior gets a letter saying that he inherited money from a distant relative and the proceeds need to be deposited in his bank account. The bank information (account, routing number and name) is requested. Once the perpetrator is given the bank information, the senior’s bank account is cleaned out.
3. Assets: A senior is targeted by an aggressive and charismatic financial advisor, who convinces the senior to invest all her money with this advisor. Once that happens, the money is invested in inappropriate or dubious investments that pay extremely high commissions to the advisor. The senior’s assets are significantly diminished.
4. Income: A woman with dementia receiving a high pension and social security is targeted by a man 15 years her junior. The man marries the woman and takes control of her monthly income. The woman is left to live in horrible conditions, while the man enjoys a lavish lifestyle.
New York is one of the few states in the country that includes age as a protected category in the definition of ‘hate crimes’. To be a hate crime, the victim must have been selected based on his characteristic, such as age or disability. While being in a protected category may provide additional recourse in the event the perpetrator is caught, it does not protect the seniors from becoming victims in the first place.
We all need to watch out for our aging relatives and our clients, as people looking to abscond with their money are already on the lookout for them.