Senior citizens face myriad obstacles including financial exploitation. Taking advantage of a senior citizen financially is considered one of the 5 forms of elder abuse (along with psychological abuse, physical abuse, sexual abuse, and neglect). While financial abuse is not a novel issue, because of advanced technology and demographic shifts, scamming elderly Americans continues to be a growing problem.
According to AARP, one in five older Americans experienced financial abuse in 2016. In 2018, U.S. banks reported 24,454 cases of senior financial abuse. According to the Senate Special Committee on Aging, seniors lose an estimated $2.9 billion from financial exploitation each year.
Because of the gravity and prevalence of this issue, it is important to understand financial abuse, its warning signs, and what you can do to prevent such situations from impacting yourself and your loved ones.
What Is Financial Abuse?
The Senate Committee on Aging reports that in 2018, the top scam impacting seniors was IRS impersonation. When this happens, the scammer usually threatens a victim with owing taxes along with repercussions such as arrest or foreclosure.
Other forms of financial scamming or abuse include robocalls, sweepstakes scams, computer technology fraud, grandparent scams, romance scams, false social security calls, and a lawsuit or arrest threats. Financial abuse can also occur in the real estate industry with unauthorized sales and transfers or changes to property titles.
Scammers are not always strangers but can often be people familiar to an elderly person such as a family member or home-care worker.
AARP cites 4 things to look out for when it comes to financial abuse of seniors. The first is a lack of knowledge about major financial issues. Has your loved one not known about large transactions? If this person has previously been informed of financial decisions and they are not able to explain or recall certain transactions, this could be a warning sign.
While seniors are at risk of being taken advantage of because of cognitive impairment, physical frailty also creates a vulnerability to financial abuse. When a person becomes unable to take care of things around the house, workers can take advantage of their situation and convince them of unnecessary work.
AARP also advises looking out for isolation in elderly people as well as unusual changes in the behavior or lifestyle of family members.
Pay attention to any changes in your loved one’s bank account, if they develop any new, suspicious friendships, and if they make any sudden changes in finances or changes to a will.
What To Do
If you suspect someone you know is experiencing financial abuse don’t hesitate to get involved. Confront the abuser if possible, report the issue, and find trustworthy advisors.
Last year, Congress passed the Senior Safe Act in an attempt to combat financial abuse. This bill allows a financial professional to report a suspected scam or abuse without disclosing personal information. In order to be eligible for this immunity, financial institutions must train their employees to notice warning signs of senior financial abuse. Ensure that your financial advisors have been trained properly trained.
If you have become a victim of financial abuse, report the information immediately, talk to trusted advisors and family members, and follow this resource roadmap.
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