Category: Elder Abuse And Exploitation

Financial Crimes Against the Elderly

Financial crimes affecting the elderly fall into one of two groups:  exploitation by outsiders, and financial exploitation by family members, friends, and caregivers in Rhode Island.  The aftermath can’t be understated both financially and emotionally.

Financial Exploitation and Fraud Committed by Outsiders

  • Contests and sweepstakes.  These crimes involve the elderly being notified they have won a prize and to claim the winnings they must send in money to cover taxes and other handling costs.
  • Charitable contributions.  A play on a senior’s  sympathy to help others. Often the charitable organization is a scam and non-existent.
  • Unscrupulous investment advisors.  The selling of inappropriate investment products to an elderly person with the promise of high returns.  These products often include high investment and management fees which drastically lowers the rate of returns.  Example:  A  tax-deferred annuity to a senior in a low tax bracket with current liquidity needs.
  • Contractors and repairman.  Unnecessary renovations and repairs.  The work may subsequently not be finished or involve substandard materials or workmanship requiring correction.  Examples:  Driveway re-pavement, roof repairs, kitchen and bathroom renovations, dishonest auto mechanics.
  • Telemarketing, mail, and IRS scams.  Unsolicited telephone calls and mail promising false winnings, selling fraudulent investment products, charitable giving scams, IRS scams.  The likelihood that the elderly person was so lucky to win or to have been fortunate to have been contacted is small.  The elderly person should seek to determine its authenticity and consult with others before acting.

Financial Exploitation and Fraud Committed by Family Members, Friends, and Caregivers

Unlike financial crimes committed by outsiders – family members, friends, and caregivers are often in a position of trust.  It is a sad commentary but family and friends are often the biggest perpetrators of elderly exploitation and fraud.  Often the elderly person is not aware of the manipulation and fraud committed against them due to the close ongoing relationship that exists.  The methods include:

  • Simply taking the elder’s money, jewelry, and valuables.
  • Improper use of credits cards and ATM machines.
  • Changes to wills and trust documents making the perpetrator a beneficiary or increasing a beneficiary inheritance.
  • Borrowing money and not repaying it back
  • Improper cashing and signing of pension checks, social security, and other third-party receipts.

Elderly Financial Abuse

Financial fraud (aka) abuse is increasing and the elderly are the most common victims.  Here are some common causes of elder abuse and steps you can take to help someone you know.

  1. Family members: It’s distressing but children are often the most common perpetrators of financial fraud.  It often starts quite innocently when they become the responsible person over Mom or Dad finances.  In time, the child starts dipping into the accounts for their own needs.  Over time a significant amount of assets disappear.

Steps you can take:  It’s best to be transparent by having other family members stay involved.  If there are more people involved in the process you have a better system of checks and balances.

  1. Internet, telephone, mail and IRS scams:  They are becoming a daily annoyance and many are very good at conning their victims out of their money.  A caller may be asking for money for a relative in need or to stop collection on a false IRS debt.

Steps you can take:  Protect your personal information.  Never give out information over the phone.  Be very selective who you will release your social security number to.  Don’t pay out money unless a trusted friend or advisor is involved.

  1. Romance scams:  Remember, many older adults, both woman, and men, are victimized in this manner.

Steps you can take:  Be especially vigilant.  Be aware of your environment.  Try to look beyond the superficial.  Limit your use of social media.  Pursue relationships face-to-face.  Unfortunately, in this day and age, deception comes in all shapes and sizes.

  1. Caregivers financial exploitation:  This is a type of abuse that is difficult to prevent.  These caregivers range from personal care aides who provide non-medical assistance such as helping with the laundry and cooking to home health aides.  Older adults often rely on and trust in-home caregivers, and some caregivers have used that relationship to exploit their clients.

Steps you can take:  Limit a caregiver access to an older adult’s ATM or credit card. Don’t leave valuable papers open and on tables for caregivers to see.  Always have a criminal background check before hiring.

Taking Care of Elderly Parent’s Finances

Physical or cognitive changes to a parent’s health can thrust children who have little knowledge of their parent’s finances to take control.  Here are some steps a family can take to prepare for the unexpected.

  1. Take notice of changes in a parent’s health. The earlier you recognized physical and cognitive changes in your parent health the earlier you can plan.
  2. General Discussions. Parent – child discussions should take place early rather than at the time of a crisis.  Preserving wealth and transferring wealth are reduced when decisions are made under stress.
  3. Prepare a listing of all items of value and documents. Include a written detailed listing showing names of bank accounts, brokerage accounts, life insurance, real estate, collectibles, jewelry, and other assets.  Include vital documents in the listing, such as wills, insurance policies, tax returns, trusts, health directives, power of attorney, and where they are kept.
  4. Prepare a power of attorney. In the event, a parent is no longer able to handle their financial affairs an assigned power of attorney will allow another person to oversee the finances.  Don’t wait, for a power of attorney to be valid, your parent must be competent at the time of signing.
  5. Validate the will. Make certain the will correctly stipulate how a parent wishes their assets to be divided after they are gone.
  6. Signs of financial abuse and exploitation. Unfortunately, older adults are often the victim of financial abuse and exploitation. Perpetrators include spouses, children, relatives, friends, identity theft, IRS scams, caregivers, contractors, unsolicited emails and telephone calls.   Factors such as loss of a spouse, loss of friends, sickness both physical ailments and mental changes, and loneliness all contribute to increasing the chances of a parent becoming a victim of financial abuse and exploitation.

Daily Money Management for Seniors

Daily Money Management (DMM) services may be as simple as paying bills and reconciling the checkbook, or the issues may be more complex.

It has been estimated that 5-10% of all older adults living in the community could benefit from some form of DMM.   Elders who have the following conditions are often in need of DMM.

  • Cognitive impairment
  • Physical conditions that limit a person’s ability to write.
  • Visual impairment.
  • The loss of a spouse, family member or friend who previously handled the person’s finances.

DMM can prevent abuse and neglect.

  • By eliminating opportunities to abuse.
  • Blocking access to assets, or removing the motive to abuse.
  • Ensure that all bills are paid and critical service needs are met.
  • Ensure that rent, debts or other revenues owed to elders are collected.

ELDERLY FINANCIAL EXPLOITATION

Financial exploitation occurs when a person misuses or takes the assets of a vulnerable adult for their own personal benefit.

Older adults are vulnerable if they require assistance with their daily tasks either due to a physical or cognitive condition. The assets are commonly taken via manipulation, coercion, threat, deception, false assertions, or duress.

Predators often include:

  • Family, friends, caregivers
  • Telephone and internet scams
  • Romance scams
  • Financial advisors
  • Contractors

HOW TO HELP AN OLDER ADULT WITH THEIR FINANCES

As older adults, age, sickness to their physical condition and their mental state of mind make it difficult for them to handle their financial issues.   Overwhelmed by their finances they often feel confused and lost.  Children, friends, and relatives will often offer their advice and support.  Here are a few important facts you should be aware of before providing assistance.

  1. Be transparent and open will all who are involved including the older adult, siblings, and financial advisors.
  2. Organize all records. This may involve tracking down assets, finding lost documents, securities, financial statements, insurance policies, power of attorney, health care directives.
  3. Be alert to fraud and exploitation. It is not uncommon for older adults to be taking advantage of by relatives, friends, caregivers, and others.

Be careful undertaking more than you can handle.  Often the task is too difficult for even a child, relative, or friend with the best intentions.  Know when you need to step back and seek