Millions of older adults fall victim to elder financial fraud annually and due to the pandemic, it appears the problem is getting worse by the day.
The U.S. Senate Aging Committee reported last year that older Americans were losing $3 billion annually to financial fraud. If those numbers don't alarm you, early 2020 reports indicate fraud linked to Covid cost Americans an additional $382 million, according to the Federal Trade Commission.
After seeing his mother suffer from a financial scam, Congressman Josh Gottheimer decided to fight back against the criminals by introducing the bipartisan Senior Security Act. Thankfully, the United States House of Representatives approved the measure recently, sending it to the US Senate. Hopefully, the members will understand the sense of urgency and pass HR 1565 too.
It seems like the scam artists are a step ahead of law enforcement with their clever tactics. They create new financial scams daily and typically senior citizens are ultimately the victims. There are only so many things law enforcement can do to protect older adults from fraud, although education and information can certainly help. Representative Gottheimer's legislation establishes the Senior Investor Taskforce at the Securities Exchange Commission and it will:
- Identify challenges that senior investors encounter, including problems associated with financial exploitation and cognitive decline;
- Identify areas in which senior investors would benefit from changes at the Commission or the rules of self-regulatory organizations;
- Coordinate, as appropriate, with other offices within the Commission and other task forces that may be established within the Commission, self-regulatory organizations, and the Elder Justice Coordinating Council; and
- Consult, as appropriate, with state securities and law enforcement authorities, state insurance regulators, and other federal agencies.
The Securities Industry and Financial Markets Association (SIFMA), a supporter of the legislation, will be charged with identifying problems senior investors encounter, including financial exploitation and cognitive decline. The plan is for the task force to report to Congress every two years on observations, best practices, and other areas identified. Also, the U.S. Government Accountability Office will be required to survey the economic costs stemming from financial fraud and exploitation, providing much-needed data on financial exploitation.
The National American Securities Administrators Association sent a strong letter in support of the Senior Security Act to Representative Gottheimer highlighting their concerns about senior financial exploitation across the country. Over the last 12 months, many seniors have been in isolation during the pandemic making them an easier prey for fraud.
SIFMA reported state and federal policymakers have made significant steps incentivizing reporting by financial professionals in recent years, but more needs to be done by bringing awareness to financial exploitation.
Since older Americans have financial savings and are trusting in nature, they are the number one target for fraudsters. Even though the statistics are eye-opening, seniors are oftentimes too ashamed to report being scammed, so the numbers are worse than they appear.
If you or someone you know have been a victim of a financial crime or elder fraud, contact your local FBI Field Office or file a complaint online with the FBI's Internet Crime Complaint Center.