Senior financial abuse scams are a multi-billion dollar industry. Learn how to spot the perpetrators and prevent this from happening to you and your loved ones.
No one wants to think about the aging process, let alone all the dangers associated with advanced age and living in today’s world. Education and planning are the two most important steps to preventing any type of issues in the future.
Senior financial abuse scams are a multi-billion dollar industry. This type of abuse not only effects the senior individual but also their families, their financial institutions, taxpayers and all the services that provide relief to the victims. A study was done in 2011 by Metlife Mature Market Institute and they estimated that the annual financial loss from senior financial abuse was 2.9 billion dollars! That number was based solely on the cases that made it to the media.
Seniors are especially susceptible to fraud. This is because we tend to be more trusting as we age, we have more wealth accumulated by that time in our lives, and our worlds become smaller. Generally, Seniors do not have contact with a wide variety of people and become secluded from the outside world. While this is a natural process that comes with age, it also provides opportunity for those who mean to cause us harm. All seniors are at risk for being targeted, but women account for the majority of these types of crimes. I am not convinced this will always be the trend but for now it is. That is due to the fact that women live longer than men, leaving them alone when their spouse passes, and elderly women in 2017 are from a generation where they are used to relying upon others in their lives to help them make important decisions.
What Are The Common Types of Abuse?
Financial abuse comes in a variety of forms but there are certain forms that present themselves over and over again and have become very commonplace. Types of senior financial abuse include:
- Identity Theft and Credit Card Fraud
- Power of Attorney Abuse
- Reverse Mortgage Scams
- Living Trust and Annuities Scams
- Deed Theft and Foreclosure Rescue Scams
- Undue Influence
- Healthcare Scams
Who Would Do Such a Thing?
The perpetrators are not so easy to spot. They come dressed as your family member, friend, neighbor and people working in a professional atmosphere with ready-made deals, and ideas on how to invest money.
When someone approaches an elderly person regarding: reviewing an estate plan, reverse mortgages, annuities, or any other product that would effect the individual’s financial portfolio – beware! If something needs to be changed, either a trusted advisor who you have been working with for years will bring it to your attention during the course of a regular review or you will be the one reaching out to the professional. Not the other way around. As a rule of thumb, if someone calls you, walk away. That includes your family members. If the family is urging you to do something, get at least three professional opinions before making any decisions. Unfortunately we cannot simply trust anymore so we have to be cautious. Especially as we age.
What Can I Do to Prevent This From Happening to Me?
The only real way to help prevent this type of abuse is to have a revocable living trust created, and be very thorough regarding your wishes. That is what is so beautiful about creating your plan; you have control throughout every stage of your life. This process is critical to accomplish properly otherwise you won’t be doing yourself any favors in the future.
Here are some things to consider when getting ready to create an estate plan:
- Do not create a plan online. There are too many chances to get it wrong then you spend even more money when you have to hire an attorney to fix the one you created yourself or have to start from scratch anyways.
- Do not create a plan with a company who offers estate plans as a gimmick to sell you insurance, annuities, or other “financial resources.” An insurance agent or a financial planner will contact you offering an estate plan but really they just want to profile you and gain access to your financial information so they can help you reinvest your money in all the products they offer. The fee for the plan will be nominal but remember, you get what you pay for. Also, if you never have contact with the attorney the company claims is drafting your estate plan – RUN.
- Carefully choose your estate-planning attorney. You are looking for someone who is not only knowledgeable, but wants a client for life, not just for the estate plan. Anyone who knows estate planning understands the plan evolves and you need someone who can be a resource for you throughout your lifetime as well as a resource for your family without being nickel and dimed every step of the way. This is a professional who will instruct your relatives as to the details of your plan when you may not have the capacity to do so anymore.
- Carefully choose your financial and medical power of attorneys. When you make the right decision, you can have the peace of mind that this person is trustworthy and will care for you how you specified. There are different profiles for each type of power of attorney and this should be discussed during the planning stages with your estate planning attorney. There are also alternatives if you do not have someone in your life who you would trust to handle your money or make medical decisions for you.
- Carefully choose your successor trustee. Similar to the power of attorneys, this person must be held to a high standard so you can rely that your plan is working for you.
Where Can I Turn for Help?
If you believe you, or someone you know, has fallen victim to financial abuse, you may want to contact Adult Protective Services (APS). https://des.az.gov/services/aging-and-adult/arizona-adult-protective-services-aps
APS programs are comprised of state and local agencies that investigate reports of abuse, neglect and financial exploitation of older persons and adults with disabilities.
Contacting an attorney regarding elder abuse is the best plan, but most people do not have the resources to go to court. Regardless, you still may want to speak with an elder law attorney to better understand your options and the process and most elder abuse attorneys do not charge for the initial consultation. Platt & Westby, P.C. has a team of experienced attorneys who can talk with you about your options and are happy to consult without charge. You can reach us online at www.plattwestby.com, or by phone 602.277.4441.
Other Helpful Online Resources for Seniors:
- National Center on Elder Abuse www.ncea.aoa.gov
- Consumer Financial Protection Bureau www.consumerfinance.gov – This government agency assists consumers by ensuring they get information they need to make good financial decisions.
- Federal Trade Commission www.ftc.gov – This government agency protects consumers from business practices that are unfair, deceptive, and fraudulent.
- Federal Crimes Enforcement Network www.stopfrauds.gov
- Postal Inspection Service https://postalinspectors.uspis.gov – Investigates frauds using the US Mail.
- The Securities and Exchange Commission www.investor.gov – This government agency investigates securities fraud.
- U.S. Administration on Aging www.eldercare.gov 1800-677-1116 – This government agency helps with finding trustworthy local support resources for seniors.
Remember to educate the people you care about and to get your plan in place