Despite the ever fluctuating, unsteady economy, there is one multi-billion dollar industry that continues to grow annually- the financial exploitation of seniors. With tax season upon us, even the IRS is becoming involved in the issue- warning seniors against the latest scam: bogus “tax refunds” based on the American Opportunity Tax Credit. But these scams are nothing new, as financial exploitation is the third most prominent type of abuse. Sadly, financial exploitation accounts for 21 percent of investigations by Adult Protective Services, but all types of elder abuse are provided less than 2 percent of federal abuse prevention dollars according to the Elder Justice Now Campaign.
A Personal Story
I encountered financial exploitation first hand when my own grandfather was a victim of a scam by a financial advisor he trusted to invest his retirement funds. He and the other seniors who were preyed upon were all upper class, successful adults who trusted the well-known advisor to invest their savings wisely. By the time the police became aware of the scam artist, none of the money was able to be recouped but the advisor was given a hefty jail sentence. Keen and independent in his old age, my grandfather was ashamed to tell our family and to this day it is rarely discussed, despite the cut backs he has had to make in his personal life.
The Cold, Hard Statistics
In cases of dementia, financial capabilities are one of the first skills to decline, but any senior can become prey to a scam artist, whether it be a false lottery claim, phony repair work, or a spam email from a distant relative needing money. MetLife estimates older adults’ 2011 financial losses from financial exploitation at a whopping $2.9 billion dollars.
But these scams are not just a voice over the phone or an email over the Internet; family members are often the perpetrator. According to the U.S. Department of Justice, Office of Public Justice, financial exploitation by a family member is reported by 5.2 percent of older people a year. When it comes to all types of elder abuse, the perpetrator is a family member in 90 percent of cases. Crimes of family preying on family are one of the main reasons many financial exploitation cases go unreported. What mother or father wants to air their dirty laundry and/or press charges against their own child?
The Law Steps In
Locally, Attorney General Lisa Madigan is communicating with the new Office of Older Americans within the Consumer Financial Protection Bureau on how to better recognize, report and protect Illinois seniors. Madigan’s recent focus has been on reverse mortgage scams and has already filed two suits against reverse mortgage companies.
The Illinois Department on Aging boasts the “B*Safe” program (Bankers and Seniors Against Financial Exploitation). This program trains bank personnel, often the first responders, on how to recognize and report exploitation. Just this February, employees of an MB Financial Bank recognized and prevented a case of elder financial abuse when a senior customer showed irregular bank activity. The bank employees were honored with an Honorary Civic Commendation from the CAPS Implementation Office for their efforts.
Nowadays, banks and other financial institutions especially need to be concerned with the abuse of Powers of Attorney for Property. Often a caretaker will convince a senior to name them as agent in the document, then use the paperwork to transfer money to their own accounts.
A Deeper Wound
Financial abuse not only hurts a senior’s bank account, but it can cause psychological damage as well. This type of abuse can result in depression and anxiety, in already frail older adults, due to the fear of being unable to gain back the money and becoming dependent on family or the state for care. Financial abuse is also often accompanied by physical and emotional abuse to control the senior. Renowned actor, Mickey Rooney, was a victim of financial exploitation himself, testifying before the Supreme Court, “I was eventually and completely stripped of the ability to make even the most basic decisions in my own life.”
Any employee licensed by the State of Illinois is a mandated reporter of elder abuse, including financial exploitation. In the field of older adult services, it is everyone’s responsibility to take these staggering statistics to heart for their clients, patients and their own families. Although baby boomers are becoming more technologically savvy, there is no doubt the criminals will adapt and become more savvy as well. Financial exploitation is a problem that can only be combated with the awareness brought about from our professional diligence of reporting and reacting to potential cases of abuse.
Have you ever reported a case of abuse? Have you suspected abuse in a patient’s home and investigated? Read more about Preventing Elder Abuse Awareness and Prevention 2012.
Let’s start a discussion about the reporting/response system in Illinois and what we as practioners can do about it!
Thanks to Bridget Murtha for editing this post. And, thank you to CarbonNYC for letting us use your photo.