Seniors lose between 27 billion to 37 billion dollars per year[i] to fraudsters, scammers, and theft. These numbers vary depending on how they are measured. What we also know is that there are an estimated 5,000,000 fraud cases per year of which only 200,000 get reported. In plain English, 97.5% of these crimes against our parents, grandparents, or yourselves (birthdays depending of course) do not get reported.
An essential part of being a financial professional is monitoring for signs of exploitation of our senior clients. Forget your 60’s is the new 50s no matter how everyone says you look 10 years younger than you are. According to the Senior Safe Act[ii] (The ACT) passed on May 24, 2018, a senior citizen (for purposes of investment accounts managed under an SEC or FINRA regulated firm) is defined as “Not Younger than 65”. Clients and their families are relying more on their financial institutions and professionals in the protection of their accounts and wealth. This type of legislation better helps protect seniors from players whose sole purpose is to harm our elders, while enriching themselves.
The Act provides immunity to our clients’ “covered financial institutions” and their employees who report financial abuse of seniors to the appropriate agencies. One condition for this immunity is the type of training my colleagues and I undergo on how to identify, report, and recognize common signs of exploitation and other suspected incidents. What type of institutions are covered and eligible to report suspected foul play? That can be your: Credit Union, Depository Institutions, Investment Advisor, Broker/Dealer, your insurance agency/company. There are many guidelines we must follow. The disclosure must be made in good faith, with reasonable care, while protecting clients’ privacy and respecting the integrity of each person. Guarding our senior investors is imperative – more information can be found here.[iii]
Several factors may increase a senior’s risk for financial abuse. Being lonely, and isolated for one, or perhaps having lost someone recently, they may be unfamiliar dealing with financial matters and money on their own. Seniors with pre-existing or onsetting physical or mental disabilities face a little-known darker side; dependency on a family member providing care with the potential to victimize them. Data suggests certain relatives that may be unemployed, have problems with substance abuse, or have other personal issues may give rise to elder abuse against relatives in their care. The National Institute on Aging website has excellent information on spotting signs here.[iv]
As 10,000 Americans are turning 65 daily over the next decade, our aging population is increasingly targeted for exploitation. There are a few defining characteristics predatory fraudsters and scammers look for. Seniors not familiar with or intimidated by technology. Those who have problems managing their finances and money; and are (or have been) susceptible to IRS, credit card scams, and phishing scams. Predators are emboldened by these targets, who are frail and may not survive long enough to bring them to justice. Many are so debilitated or embarrassed they won’t pursue legal recourse at all. There is a real fear of losing control of their independence due to family or legal intervention on their behalf. More reading on the many forms of financial scamming and deterrents can be found here.[v] Whether for your good, a dear friend or family member, keep these things in mind - awareness about elder abuses can one day help to preserve and protect yourself and your loved ones.