Financial exploitation of seniors

By LouAnn Schulfer, AWMA®
, AIF®

With our aging population, financial exploitation of seniors is a serious and growing problem. It happens throughout all economic levels and has robbed people of their savings, their financial security, their homes and ultimately their dignity. We tend to think of criminal activity as obvious and violent. However, exploitation often begins with a much softer approach. By playing on emotions, money or other assets are often stolen through gradual persuasion, with the victim eventually signing over money or other valuables thinking they are doing the right thing by helping someone else in a time of need. Often there are promises of returning the “borrowed” money. Sometimes, the emotion is our own greed, as exploitation may be a promise of returning the money along with a great rate of return. Exploitation can escalate through coercion, trickery, deception, and even harassment and threats.

Each year, I attend LPL Financials’ annual national FOCUS conference with a few thousand other advisors and financial professionals. Protection of seniors is of such importance that it has been one of the few mandatory sessions that all securities licensed advisors have been required to attend. The SEC approved amendments to FINRA Rule 4512, Customer Account Information, and FINRA Rule 216.5, Financial Exploitation of Specified Adults. As of February of 2018, advisors are required to make efforts to obtain the name and contact information for a client’s Trusted Contact person when opening or updating an account. The Trusted Contact person is an additional resource for advisors to consult when a complex situation arises, such as having concern for a client’s physical or mental wellbeing or responding to possible financial exploitation.

If you do not have a Trusted Contact on the record of your accounts, contact your advisor or the company where your money is held and request detailed information on how this can help to protect you, and what the firm’s policy is on contacting the Trusted Contact. Additionally, it is always a good idea to let a responsible adult know some basics about your financial affairs — where to locate assets and/or who to contact on your behalf in the event of concern, death or disability.

The State of Wisconsin has put together a guide of common consumer protection issues facing Wisconsin’s senior citizens. It is an excellent resource and I encourage you to read it: www.datcp.wi.gov/Documents/SeniorGuide170.pdf. Together, let’s work to detect and prevent the financial exploitation of seniors.  

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Financial exploitation of seniors 

Financial exploitation of seniors persists

Story by Jennifer Bullock

COLUMBUS, Ohio (WCMH) – Older Americans are falling victim to scams. Better Call 4 has told you about some of the most common tactics reported to agencies like the Better Business Bureau of Central Ohio, the Attorney General’s Office, the Federal Trade Commission and even the Federal Bureau of Investigation.

In fact, the FBI’s Internet Crime Complaint Center (IC3) recently released its 2023 Elder Fraud Annual Report, which stated that adults over the age of 60 reported around $3.4 billion in monetary losses to fraud and scams last year.

“So, what the FBI’s report is about is what they call ‘elder fraud,’ which is when a stranger takes advantage of an elder,” Ian Bednowitz, general manager for cyber safety company Norton Lifelock, said.

Bednowitz said around the same time, the Financial Crimes Enforcement Network — a bureau of the U.S. Department of the Treasury — released its report. The findings, for Bednowitz, hit close to home.

“They, in general, talk about elder financial exploitation, and there are two types,” Bednowitz said. “One is the elder fraud, the other is elder theft. And the number two form of elder theft is when a caregiver in the home actually steals from the elder. That was my personal experience was with elder theft.”

Bednowitz said the caregiver hired to take care of his mother was actually taking money from her.

“Thousands of dollars,” said Bednowitz. “And my heart sunk.”

Bednowitz said he spent a lot of time and energy cleaning up the mess that caregiver created, and doesn’t want to see anyone else go through that.

“The best defense is a good offense,” said Bednowitz. “If you have a caregiver in the home, you need to protect yourself.”

Bednowitz suggested vetting the agency and the caregiver, but warned against relying solely on a background check.

“My caregiver was background checked,” Bednowitz said. “She actually had a fake identity that she used past the background check.”

Dig a little deeper into their identity, he said. Before you invite them into the home, get all of the personal information out.

“Make sure you get all tax returns out, get the social security number out, start changing, redirecting where mail is going, so that it’s not coming to the home,” said Bednowitz.

Finally, consider freezing your — or your loved one’s — credit.

“If your credit is frozen, no one can take out access without you giving permission yourself to use your credit,” said Bednowitz. “And if you’re not going out and actually using your credit to buy a car or a home, keep your credit frozen.”

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Financial exploitation of seniors persists

AG Jennings Warns Seniors Of Uptick In Financial Scam Reports

Department of Justice Press Releases | Featured Posts | Date Posted: Wednesday, September 6, 2023

In the wake of an uptick in reports of financial exploitation of seniors, Attorney General Kathy Jennings and the Delaware DOJ’s Investor Protection Unit (“IPU”) is cautioning seniors to be vigilant for scams.

Delaware law requires banks, credit unions, and certain other financial institutions to report suspected exploitation of a senior or vulnerable adult to the IPU. Recent reports involve a number of different kinds of scams, including: 

• Tech support scams in which a fraudster leads the victim to believe that their computer has been hacked
• Money and check transfer scams, in which a fraudster asks the senior to help them transfer funds or deposit a check
• Social media romance scams, in which a fraudster feigns romantic interest in the victim in order to convince them to send money

“Anyone can be the victim of fraud, but scammers frequently target seniors specifically,” said Attorney General Jennings. “Protecting Delaware’s seniors is a top priority, and it’s an all-hands-on-deck job. I’m grateful to the financial professionals who have reported suspected exploitation to the Investor Protection Unit. They’re doing their part to help protect our seniors.”

While the increase in reports has been specifically noted in Kent and Sussex Counties, it is unclear whether downstate seniors are being targeted because of their location. Attorney General Jennings urges seniors across the state to be vigilant and take precautions to protect themselves from investment scams by doing the following:

·         Remember: if it sounds too good to be true, it probably is.

·         Never deposit money or transfer a check for someone you do not know.

·         Never send money to someone you do not know.

·         Never pay money to receive money.

·         Never send money or provide credit card or online account information to anyone you do not know and trust.

·         If you get a phone call you did not expect from someone who says there’s a problem with your computer, hang up.

·         If you are looking for computer tech support, contact a company you know and trust.

Financial institutions may file a report of senior exploitation with the Investor Protection Unit using the form available here: https://attorneygeneral.delaware.gov/fraud/ipu-exploitation-of-seniors/

Source:
AG Jennings Warns Seniors Of Uptick In Financial Scam Reports

Task force releases recommendations to address financial exploitation of seniors

Robert Torres, Pennsylvania Secretary of Aging

The Pennsylvania Department of Aging (PDA), joined by the Pennsylvania attorney general’s office and other members of a public-private task force, held a media briefing to provide an overview of its work and announce a series of recommendations, focused on multi-disciplinary approaches, to help prevent financial exploitation of older adults and to effectively respond to incidents of financial exploitation.

PDA led the task force, which included representation from state government, the legal and financial sectors, aging, law enforcement and healthcare stakeholders. The task force met from December 2020 to April 2021 and concluded with the development of specific strategies covering four categories: education, training, operations and procedures and legislation.

“The Financial Exploitation Task Force’s recommendations cover a wide spectrum and offer great opportunities for ongoing collaboration to implement them," Secretary of Aging Robert Torres said. "They are designed to offer practical solutions to raise awareness of financial exploitation and to improve how we work together to protect older adults from becoming victims.

“I thank all of the task force members for their engagement, input and dedication on addressing the financial exploitation of older adults. The department staff and I look forward to supporting the workgroups that will continue working on these recommendations to achieve tangible results.”

Some of the recommendations include developing a training program for financial services providers on reporting financial exploitation, creating an online toolbox to help law enforcement investigate cases of financial exploitation and updating Pennsylvania’s Older Adults Protective Services Act (OAPSA).

"Every day, my office hears from older Pennsylvanians who share their stories of and concerns about being financially exploited," said state Attorney General Josh Shapiro. "The resources that have been put together by this task force address many of the conversations that we have with older folks, as well as providing helpful information for family members and caregivers who are looking out for their loved ones."

Over the course of five months, the task force reviewed the common types of financial exploitation, learned how capacity and cognitive decline in seniors increases their risk of being exploited, explored how to strengthen collaboration between government, law enforcement, financial services institutions and healthcare organizations, heard from family members of older adults who were victims of financial exploitation and discussed the critical need to update OAPSA.

“Like my family, I think most of the general public remains unaware of the sheer volume and heartache associated with financial exploitation of seniors until they become victimized," said Amanda Cassel, whose grandmother was a victim of financial exploitation. "Having been through the process of picking up the pieces due to this crime, my family hopes that by sharing our story we can help others going through this process or even prevent another senior from being victimized.

“I am very impressed with the work that the Financial Exploitation Task Force is doing to help protect our seniors, and I am happy to be able to contribute to their efforts by participating in this way.”

"This task force builds better outcomes by joining organizations into a 'Think Tank' environment," said David Shallcross, director of senior protection, attorney general’s office. "It has become apparent that no single organization is capable or prepared to handle all the aspects of preventing and responding to Older Adult Financial Exploitation on its own, it requires a team approach to accomplish our goals.”

“People living with Alzheimer’s disease or other dementia are especially vulnerable to financial exploitation because the disease may prevent them from reporting the abuse, recognizing it, or even remembering that it occurred in the first place,” said Jen Ebersole, director of state government affairs, Alzheimer’s Association. “Recognizing early signs of the disease that leads to an early and disclosed diagnosis can initiate important conversations between physicians, patients and caregivers that can prevent financial exploitation through advance planning when cognition is least impacted.”

“Pennsylvania’s credit unions help protect older members from financial abuse and exploitation on a daily basis by questioning suspicious financial transactions and counseling older members on how to protect themselves," said Christina Mihalik, senior vice president of government relations, CrossState Credit Union Association. "We routinely work with local authorities when abuse or exploitation is suspected. As the trade association for credit unions in New Jersey and Pennsylvania, CrossState welcomes the opportunity to collaborate with other groups, including those represented on the Financial Exploitation Task Force, that are seeking to protect senior citizens and others from being taken advantage of financially.”

The task force will reconvene later this year to review and discuss the progress made on each recommendation.

The formation of a task force was one of five recommendations from a study on the Financial Exploitation of Older Adults conducted by PDA and released in September 2020.

The goal of the task force was to explore better coordination and proactive supports for older adults to improve early detection, prevention of and response to financial exploitation. Prior to assembling the task force, PDA convened a state interagency workgroup to explore improved collaboration between agencies and to develop initial recommendations for the task force to consider. This effort led to improved information sharing among several agencies.

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Task force releases recommendations to address financial exploitation of seniors

Oregon DHS study: Financial exploitation of seniors costly, still difficult to prove

SALEM, Ore. (KTVZ) – Family members or those in a close, trusted relationship are responsible for nearly half of substantiated financial exploitation cases of older adults in Oregon -- and the success of all investigations often depends on access to records and involvement of law enforcement, according to a new study.

The study by the Oregon Department of Human Services Office of Aging and People with Disabilities found that financial exploitation and neglect are tied for the lowest survivability rate of all abuse types, and at least 13 percent of the victims in this study had to immediately seek some sort of governmental benefit as the result of the abuse. 

This included Medicaid to cover the cost of residential care and property tax deferral, energy as well as utility and food assistance.

These findings are part of a comprehensive study of financial exploitation of older adults in Oregon. The study is a follow up to Oregon’s 2014 retrospective study on financial exploitation, and helps provide a better understanding and picture today of financial abuse in Oregon, DHS said Monday.

The study contains analysis of financial exploitation from more than 600 cases investigated statewide in 2019. Staff reviewed these cases while documenting what has changed, what has stayed the same, where did interventions applied after 2014 work and where is focused effort still needed. 

Some of the other findings include:

• In 2019, there were 4,152 investigations of alleged financial exploitation in Oregon conducted by the ODHS Office of Aging and People with Disabilities. This report pulls from some of those cases. In the 2014 report, 400 cases of the 2,929 reports involving financial exploitation were reviewed.
• Family members and others that are in a close trusted relationship with the victim continue to be the highest percentage of perpetrators using means of undue influence, deceit and threats to steal from the victim.
• The average quantifiable loss to a victim in this year’s report was $16,905.  In 2014, the average loss per each substantiated case of monetary theft was $24,915.
• The tools that the Legislature has given financial institutions to limit losses are working, including the passing and implementation of House Bill 2622 in 2017. This has given these institutions a tool to very quickly stop the financial losses on some of these cases.
• There are many other losses to victims such as personal property, unauthorized credit card use, and medication that can be more difficult to quantify financially.
• Victims are more often women than men by nearly a 2:1 margin.
• The average age for both alleged and confirmed victims of abuse is 75.9 and 77 respectively. In 2013, the average age for a confirmed victim of financial exploitation was also 77.
• Financial institutions and case managers are the most frequent reporters of financial exploitation making up more than a third of all reports received and subsequently investigated.
• Bankers are not only well positioned to identify financial exploitation, but they often identify other types of abuse and self-neglect as well.  In 2019, they reported more than 200 other concerns that were investigated including 150 cases of possible self-neglect and multiple cases of physical and verbal abuse. 

While there still is a lot of outreach to be done, progress is being made through education and outreach to financial partners and law enforcement stakeholders. The ODHS Office of Aging and People with Disabilities has teamed up with these stakeholders to continue to make an impact on this issue.

The primary barrier to investigating these cases thoroughly and effectively continues to be the inability of investigators to obtain necessary financial records.

“Financial exploitation has a major impact on older adults, especially those who may be isolated or lack social support systems,” said Marie Cervantes, ODHS Adult Protective Services administrator. “This publication offers updated findings so that we may more closely examine this very costly, prevalent and disturbing form of abuse of our most vulnerable Oregonians.”

Mike McCormick, interim director of the ODHS Office of Aging and People with Disabilities added, “With the aging demographics here in Oregon and nationally, financial exploitation is unfortunately forecast to grow. It’s critical that we, as a society, devote all the tools and resources to protect vulnerable adults from exploitation.”

Resources:

To read the study in its entirety, go to: Financial Exploitation in Oregon: A Look at Community Based Investigations During 2019

 

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Oregon DHS study: Financial exploitation of seniors costly, still difficult to prove