Seniors' wallets are squarely in the crosshairs of financial predators. Financial exploitation runs the gamut from the quaint and quotidian to brazen and breathtaking abuse. Telemarketers sell auto-club memberships to seniors who no longer drive. Caregivers who are asked to help with the banking withdraw cash for themselves. Or an adult child who holds power of attorney drains your retirement savings and pressures you to change your will for his benefit.
The numbers are stark: People 60 and older accounted for 27% of fraud complaints last year, up from 22% in 2011 and the highest percentage of any age group, according to the
The statistics actually illustrate only a fraction of the problem because most senior financial abuse goes unreported, fraud experts say. Seniors may be reluctant to report they've been scammed because they are embarrassed, afraid they'll be deemed no longer capable of managing their own finances or unwilling to expose a family member who has been stealing their money. And seniors suffering from dementia may not realize they've been exploited.
Among the factors that can make seniors targets for scams: ample retirement savings, social isolation and health conditions that may diminish financial decision-making ability. And in recent years, "interest rates have been so low that seniors living on a fixed income have to take on some risk, and con artists know this" and tout inappropriate products, says
But an array of new tools and techniques are helping seniors and their advocates shed light on elder financial abuse -- and prevent it from happening in the first place. New research is pinpointing which seniors are most susceptible to financial scams. Regulators and senior advocates are recognizing that professionals in the legal, medical and financial industries should play a role in shielding older adults from financial exploitation. And new types of debit cards and smartphone apps are helping protect seniors against fraud.
THE LINK BETWEEN FRAUD AND HEALTH
New research on the interplay between financial scams and declining health shows how seniors can potentially safeguard their pocketbooks by paying close attention to their medical conditions and even discussing financial problems with their physicians.
More than one-third of people 71 and older have some form of cognitive impairment or dementia, according to Duke University research. And people with even mild cognitive impairment have far more trouble with basic financial tasks such as paying bills and managing bank statements than those without the condition. Indeed, trouble managing money is often the earliest sign of developing dementia.
Other health problems can also make seniors more susceptible to scams. A recent
Given the links between physical and financial health, investor-education group
Family members and friends can look for many of the same red flags that IPT is training doctors to evaluate. Growing confusion about how to pay bills and sudden concern about running out of money at the end of each month may be signs that a senior needs help.
If you see signs of cognitive decline, a doctor can evaluate whether the senior should be referred for neuropsychological testing or a functional MRI. If you suspect financial exploitation, report it to your local adult protective services agency; for information, visit the Web site of the federal Eldercare Locator (www.eldercare.gov), or call 800-677-1116.
Just as an illness can make seniors more susceptible to financial fraud, suffering financial exploitation can also affect a senior's physical health, researchers say. In some cases, seniors who have been scammed forgo paying for needed health care. In other cases, the simple knowledge that they've been ripped off seems to spark a physical decline.
But when she was in her late seventies, he began to see signs of financial troubles, including hefty credit card bills. One charge that stood out:
When Tischler's mother entered assisted living, she had no resources to pay for it, leaving her dependent on her children. After he told his mother about the financial exploitation, "her health declined rapidly," Tischler says. "It starts small and it grows." After his mother's death in 2011, Tischler started EverSafe, a company focused on safeguarding seniors' finances.
A little planning can go a long way toward protecting your finances in the event of declining health. Tell trusted relatives where to find your financial documents in case you're seriously ill. Set up direct deposit of any income and benefit checks you receive regularly. And if you designate a power of attorney for finances -- an agent who can manage all your finances if you're incapacitated -- build in safeguards to prevent abuse. For example, require that the agent periodically report to a third party, such as a friend or lawyer, or that a third party approve any large gifts of your property.
Such steps -- besides protecting you against predators who operate online, by mail and by phone -- can also help prevent financial abuse by people who are close to you. Family members account for nearly 60% of cases of senior financial exploitation, followed by friends, neighbors and paid home-care aides, according to a recent study in the
Leefer's own father had a live-in caregiver at his
If you're inviting someone into your home, secure your personal financial information, Shadel says. Don't leave
GO ONLINE BUT BE ON GUARD
Yes, the Internet is full of scams. But it may also be your best defense against financial fraud.
One-third of Americans have failed to set up online access for at least one of their bank or credit card accounts, according to
New smartphone apps and online services are also helping seniors and their caregivers detect fraudulent transactions quickly. These services can alert you to massive cyberattacks as well as small-scale abuse, such as a caregiver making personal purchases with your credit card. The senior -- or trusted relatives or friends he has designated to help oversee his account -- will receive alerts about questionable transactions, which can then be verified.
With Tischler's EverSafe service (www.eversafe.com), launched earlier this year, users can register their credit cards, bank and investment accounts. For
BillGuard, a free app for iPhone and Android devices, also lets users link up credit- and debit-card accounts so that they can quickly review transactions and follow up on any suspicious activity. If other BillGuard users flag transactions with a specific merchant as suspicious, you'll be alerted to review any transactions you made with that merchant.
For seniors who are struggling to manage their money, a new prepaid Visa card is designed to circumvent fraudsters while preserving a senior's ability to make financial transactions. The True Link Financial card (www.truelinkcard.com), which charges a
To stay abreast of the latest online scams, visit
Seniors who don't feel comfortable with smartphone apps and other technology can find a growing range of computer-education programs designed specifically for them. Search for technology classes in your area at the
Some basic Internet safety tips: For online purchases, use gift cards, prepaid cards or credit cards, which offer better fraud protection than debit cards. Don't post information on social networks about going away on vacation or coming into some money. And learn to recognize "phishing" e-mails, in which scammers may pose as familiar companies or government agencies such as the
While high-tech financial scams are grabbing the headlines, remember that low-tech scams are still running rampant. Bogus sweepstakes offers pour into seniors' mailboxes. Scammers call impersonating grandchildren in urgent need of cash or pretending to be
Don't give out personal information over the phone. Put your landline and cell phone numbers on the National Do Not Call Registry at DoNotCall.gov or call 888-382-1222. If your number is on the registry and a caller is from a company you've not done business with before, "it's probably a scam," says
With a growing recognition that senior financial abuse often goes undetected, elder advocates, regulators, lawmakers and senior victims themselves are working to spotlight the issue. "We're trying to create a village around people who need assistance," says
Last year, 18 states passed legislation or resolutions relating to financial crimes against seniors, according to the