Protect Yourself: Elder Financial Abuse on the Rise

With our senior citizens continuing to live longer, we should all take a moment to think about these staggering statistics that affect the well being and safety of our senior citizens. 

According to the National Council on Aging, one out of 10 Americans over the age of 60 have experienced some sort of elder abuse in their lifetime.  Just last year alone, it is suspected that over five million seniors were abused in some way and only one out of 14 victims report the crime to authorities. Who could be praying on our elder population to derive such eye popping numbers?  Well, apparently you don't have to look too far.   60 percent of the time, the abuse comes from family members. 

With the rapid increase in abuse towards our elder population, it is apparent that many senior citizens suffer from the crime of financial exploitation.  Those who are 50 plus control over 70 percent of our nation's wealth and are becoming easy targets for financial abuse. Financial abuse is a crime that deprives older Americans of their resources and independence.

The American Bankers Association reports, one in five seniors have suffered some sort of financial abuse.  Most of the time, our older Americans are afraid or are embarrassed to report the incident to authorities, so with that in mind, these numbers are stunning.  Estimates show that financial institutions report $1 billion in bank fraud and customers lose nearly $3 billion annually.  According to another article published in Consumer Reports our senior citizens are losing $30 billion annually to elder financial abuse.  Government officials, agencies, regulators and the financial industry are all stepping up their efforts to help, but it takes individual responsibility to set up your own safeguards.

Additional efforts are underway at the North American Securities Administrators Association where Securities regulators released a Model rule to help combat elder fraud.  The rule mandates that investment brokers and financial advisers report suspected elder abuse to state authorities.  Joe Borg, NASSA President and Alabama Securities Commissioner, said brokers and advisers are protected from liability if they stop account disbursements. Borg added, 13 states have adopted versions of NASSA's Model rule and other states are likely to join in this year.  At the federal level, the House of Representatives passed the Seniors Safe Act in January. H.R. 3758  encourages financial firms to provide training to front line producers and employees while granting them immunity for reporting suspected abuse to law enforcement. Dick Kempthorne, President and CEO of the American Council of Life Insurers, told Think Advisors, a comprehensive research and news organization for the Investment Advisory community, “Encouraging the reporting of suspected fraud, the Seniors Safe Act improves the ability of companies to work with regulators to protect seniors from losing their retirement savings”.

Elder financial abuse and exploitation is difficult to detect.  There are no easy solutions, but offers 4 excellent tips to help prevent this crime: 

  • Being Present - talking about money with parents is sometimes difficult, but being vigilant in your parents lives will help prevent them from becoming a victim. By simply being present on regular occasions will help safeguard them. By being close by, it is easier to gauge excessive spending, unpaid bills and other unusual behaviors that can be red flags.

  • Having Difficult Conversations - one of the most crucial steps is having your parents financial wishes in writing before dementia or cognitive challenges occur. It is important to have difficult conversations early on.   Those who talk to relatives and friends are more likely to take financial safety measures to protect their resources.

  • Evaluate caregivers closely - it is prudent to carefully scrutinize all caregivers. To provide additional assurances for safety, you may consider using a licensed agency that conducts background checks for all of their employees who care for seniors.  Also, getting good referrals from people you trust will be very helpful in finding the perfect caregiver.  Once a caregiver is hired, it pays to have someone checking in to ensure your parent isn't sharing personal financial information.  Debit cards, checks and credit cards shouldn't be easily accessible.
  • Utilizing technology - while the internet can be an easy source to perpetuate a crime on senior citizens, it can also be a tool to help safeguard against financial abuse. 


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