Protecting the Elderly From Financial Abuse Revisited

Transcript of Podcast Episode 158

Hello, this is Bill Rainaldi with another edition of Security Mutual’s “SML Planning Minute.”  In today’s episode we’re going to take a look back at one of our favorite previous episodes, Protecting the Elderly from Financial Abuse.

Elder financial abuse or exploitation is defined in the Older Americans Act of 2006 as:  “The fraudulent or otherwise illegal, unauthorized, or improper act or process of an individual, including a caregiver or fiduciary, that uses the resources of an older individual for monetary or personal benefit, profit, or gain, or that results in depriving an older individual of rightful access to, or use of, benefits, resources, belongings, or assets.”

Clearly this is a form of abuse: the taking of advantage of an older individual for another’s financial gain.   This is widespread, and believe it or not, it is common.  Calling the problem “widespread and damaging,” the Consumer Financial Protection Bureau (CFPB) analyzed government reports of suspicious financial activity, which the bureau said involved more than $6 billion in attempted and actual losses between 2013 and 2017.  In 2017 alone, reports of suspicious financial activity involving older folks totaled $1.7 billion. There were 63,500 reports that year, four times as many as in 2013, according to the CFPB, which is an independent federal agency that recently released its report.[i]

The number of financial abuse victims is alarming, but what may be even worse is that the abuse is often carried out by someone close to the victim. Financial crimes against the elderly are often carried out by family, friends or other trusted individuals. The perpetrators of elder financial abuse can include:

• Family members
• Caretakers
• Neighbors
• Friends and acquaintances
• Attorneys
• Banks and other financial institutions
• Trusted financial advisors
• Health care providers

While there are a number of ways in which seniors can protect themselves, Congress is also doing its part.  The Senior Safe Act was included as Section 303 of the Economic Growth, Regulatory Relief, and Consumer Protection Act, which was signed into law on May 24, 2018. The Act addresses barriers financial professionals face in reporting suspected senior financial exploitation or abuse to authorities.  The bill also protects those financial advisors from liability and from violations of privacy laws when they report cases of elder financial abuse.  This immunity from liability in any civil or administrative proceeding for reporting a case of potential exploitation of an elderly person who suspects exploitation must be made “in good faith” and “with reasonable care.”

According to AgingCare, there are five types of elder abuse: physical, sexual, psychological, financial, and neglect.  We’re focusing on financial abuse. These are some of the warning signs:

• Forging the elderly person’s signature on checks or other documents
• Forcing the elderly person to sign a will, deed, or power of attorney listing the perpetrator as the one who is responsible for the elderly person or who will gain when the individual dies;
• Stealing property or money from the elderly person
• Promising to give the elderly person lifelong care only if they give them money or their property
• Using the possessions or property of the elderly person without their permission
• Perpetrating fraud, which can include the use of trickery, false pretenses, deception or other dishonest acts in order to gain the person’s finances
• Perpetrating cons or other confidence games in order to gain the trust of the elderly person
• Perpetrating telemarketing scams in which the elderly person is called and deception, exaggerated claims or scare tactics are used to get the elderly person to send them money
• Charging things against the elderly person’s credit cards without the authorization of the cardholder

More recently, government officials have reported a surge of malicious attempts to defraud taxpayers in connection with the coronavirus (COVID-19) Economic Impact Payments. Scams may use calls, text messages, or emails to impersonate IRS agents offering financial relief. Be aware of these scams. Here is some information provided by the IRS to help identify and report fraud:

Here’s what taxpayers should know:

• The IRS will not call, email or text you to verify or request your financial, banking or personal information.
• Watch out for websites and social media attempts to request money or personal information. The official website is IRS.gov.
• Don’t open surprise emails that look like they’re coming from the IRS or click on attachments or links.
• Taxpayers should not provide personal or financial information or engage with potential scammers online or over the phone.
• Forward suspicious emails to [email protected], then delete.
• Go to IRS.gov for the most up-to-date information.

What can you do if you suspect elder financial abuse?  If you suspect financial abuse of an elderly person, you can contact Adult Protective Services (APS), local law enforcement, or the senior’s financial institution.  It is best to get help for financial abuse as soon as possible.  An attorney’s advice can also be extremely helpful in this situation.

APS is a mandated service provided by local social services districts. It involves intake, investigation and assessment of referrals of abuse, neglect, and financial exploitation of impaired vulnerable adults who live in the community. APS workers develop services plans for eligible clients to remedy physical abuse, sexual abuse, emotional abuse, neglect, financial exploitation, or to address unmet, essential needs of adults.  In New York you can call 844-697-3505 and you can look for the APS contact in any state online by going to:  napsa-now.org/get-help/help-in-your-area

[i] https://www.aarp.org/money/scams-fraud/info-2019/cfpb-report-financial-elder-abuse.html

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