new survey from the Investor Protection Trust (IPT), a nonprofit devoted to investor education.
More good news on the elder fraud front, especially if you have parents in their 70s, 80s or 90s: there are now a bunch of efforts underway to prevent these scams and aid victims. Federal and state government regulators are pitching in. So are AARP, IPT and some financial services firms. “Many times, the financial adviser is the first person to notice a problem,” said Cynthia Hutchins, director of gerontology at Bank of America Merrill Lynch.
Rampant, Expensive and Lethal
Older consumers will likely be especially glad that some banks are taking seriously elder financial abuse, a category of crime Kathleen Quinn, executive director of the National Adult Protective Services Association, has called “rampant, largely invisible, expensive and lethal.” A recent survey for the AARP BankSafe campaign found that 81% of bank customers 50 and older prefer to establish their accounts at banks that protect them from exploitation or provide an age-friendly service.
As for the “good” news in the IPT survey: Although the poll found that 17% of Americans age 65 and older have “been taken advantage of financially in terms of an inappropriate investment, unreasonably high fees for financial services, or outright fraud,” that’s down from 20% in 2010.
This is not a huge drop, but it’s a drop, nevertheless. (The 2016 survey, conducted by Public Policy Polling, interviewed 2,257 Americans 65 and older and 703 adults with parents 65 and older.)
Why Fewer Are Becoming Victims
IPT President and CEO Don Blandin said fewer older adults are becoming victims partly because scammers are getting “more sophisticated about who they target.” They’re taking a rifle approach, going where the big money is, rather than taking a shotgun approach and hoping to score random hits. As Consumer Financial Protection Bureau (CFPB) Director Richard Cordray said last week: “Older Americans make attractive targets for financial exploitation because many have accumulated some wealth in the form of retirement savings or home equity. They can be isolated and lonely, and some may have impaired physical or mental capacity that makes them especially vulnerable.”
IPT’s survey also pleasantly discovered that the percentage of older Americans exhibiting one or more of the warning signs of financial victimization fell from 50% in 2010 to 43% in 2016. The reason for the drop, said Public Policy Polling’s Jim Williams, is that just 5% now said they didn’t feel confident making big financial decisions alone, down from 16% in 2010. “There could be more of a support network and more vigilance out there,” said Williams.
And in what IPT calls a “major improvement,” 51% of people 65 and older correctly answered all the poll’s investment questions; in 2010, just 44% did.
However, 21% of the adult children surveyed said they think their parents would be ashamed to tell them if they thought they were being swindled and would hide this from them. Worse, 47% of the adult children think it’s not likely that they could figure out if their parent had been swindled if the parent didn’t disclose it; that’s up from 35% in 2010. So not everything is rosy on the elder fraud front.
How Doctors Are Helping
The IPT survey finding that surprised me most: A full 21% of the adult children said their parents’ health care providers mentioned concerns about how the parents were handling money; this was up sharply from just 5% in 2010.
Blandin gives some credit to IPT’s Elder Investment Fraud and Financial Exploitation (EIFFE) Prevention Program, encouraging doctors to spot and report signs of mild cognitive impairment (MCI), which can make older people more vulnerable to money swindles. More than 8,600 medical professionals have been trained and some physicians keep IPT’s “pocket guide” handy to help them ask key questions. “My doctor now has something on his intake form to see if patients have any financial issues,” said Blandin.
One problem: The IPT survey also found that 61% of adult children are not in touch with their parents’ health care providers. (Continue Reading)
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The Good News About Elder Fraud