Financial abuse of the elderly is rampant. As people get older, they are preyed upon by operators who want to sell them things they don’t need or steal their money.
I’ve seen it first hand in dealing with financial abuse of my father. I had to go after a broker who sold him junk bonds and a window salesman.
Here’s why the problem of elder financial abuse is growing, according to the Weinberg Center for Elder Justice:
— Some $2.9 billion dollars is taken from older adults every year nationwide. It happens to men and women from every community, every ethnicity, every socioeconomic level
— Between 1 and 2 million Americans age 65 or older have been injured, exploited or otherwise mistreated by someone on whom they depended for care or protection. For every case of elder abuse that is reported, another 23 go unreported
— Older adults with Alzheimer’s are at greater risk of elder abuse than those without. Close to half of all people over 85 have Alzheimer’s. A 2010 study found that 47% of participants with dementia had been mistreated by their caregivers
— 51% of perpetrators of financial abuse are strangers; 34% are family, friends or neighbors. The occurrence of elder abuse among older men is on the rise.
The best way to prevent elder financial abuse? Be vigilant. Ask these question on a regular basis:
1) Have you been approached by a salesperson lately? Most of the time, elders will be called or asked to attend “free” lunches. Make sure that they haven’t responded to these scams.
2) Do you need help with your investments? Most will say no, but after a while, cognitive decline makes it impossible for them to understand simple brokerage and portfolio statements. Ask them if they understand what’s going on in their financial life.
3) How are you doing with bills? The surest sign of cognitive decline is when an older relative forgets to pay their bills and they pile up. Look around their home to see if overdue notices are piling up. My Dad not only stopped paying his bills, he wasn’t paying his taxes.
4) Has anyone approached you to manage your money? Sometimes offers come from banks, sometimes from brokers. Finding a fee-only financial planner — who doesn’t make a commission — isn’t such a bad idea. But you’ll need to supervise the process.
5) Do you have financial safeguards in place? If they have a living trust, you need family trustees as a back up. You will also need responsible family members to have powers of attorney for financial matters and health care.