Elders are financially defrauded on a daily basis. Only a few of these crimes are made public. In fact, the National Adult Protective Services Association (NAPSA) estimates that only 1 in 44 cases of elder financial abuse are reported. NAPSA also reports that one in nine seniors had been financially “abused, neglected or exploited” within the past year.1
Friends, family, & caregivers perpetrate much of this financial abuse.
They commit 90% of it, according to NAPSA. Major fraud damage might even result in a decline in an elder’s physical and mental health: victims of elder financial exploitation are four times more likely to go into a nursing home than their peers, and nearly 10% of the victims end up relying on Medicaid.1
Frauds range from big scams to little schemes.
You may already know about the common ones: the grandparent scam (“Grandpa, I’m in jail in _____ and I need $___ to make bail”), the utility company scam (one criminal keeps the elder busy in the yard as the other burglarizes their home), the lottery scam (a huge prize awaits, and the elder need only pay a few thousand upfront to take care of associated taxes). Others are subtler: home health aides severely overcharging an elder for their services; relatives or caregivers using a financial power of attorney to draw down an elder’s bank or investment accounts.
Talking about fraud may help to prevent it.
Sometimes, a good way to introduce the topic is by referring to what happened to someone else – a story coming up on the news or in the paper, or an article online, or maybe even a friend’s experience. Part of this conversation will be about the elder in your life bringing you on as a second line of defense; someone to help them watch over things. Have a conversation about setting up powers of attorney and other legacy paperwork (will, living will, health care directives) in coordination with legal and financial professionals.2
Maintain good communication with the professionals in your loved one’s life – not just the aforementioned legal and financial professionals, but caregivers, health care professionals, and anyone else who works with them on a regular basis. Maintaining these conversations with seniors and the people who work with them can go a long way to deterring financial fraud.2
The Senate Special Committee on Aging says that American elders lose $2.9 billion in fraud per year. That’s spread among 78 million Americans over the age of 65. One in five of that population has some sort of cognitive issue, a number that rises to more than half when narrowed to people 85 and older. Taking steps now might mean curtailing or avoiding bigger problems down the road for the seniors in your life, so it’s definitely worth having those conversations today.3
Looking for resources?
AARP may be a good place to start. They have resources specific for Colorado residents. According to their website, “AARP Foundation ElderWatch Colorado is a program with the Colorado attorney general and AARP Foundation whose mission is to ensure that no older adults are left to suffer, alone and in silence, at the hands of those who exploit them. The program fights the financial exploitation of older Coloradans through education and outreach, data collection, and the providing of assistance.”
Andrea L. Blackwelder, CFP®, ChFC, CDFA® and Joseph D. Clemens, CFP®, EA are the founders and partners of Wisdom Wealth Strategies. Their shared passion is simple: to bring financial empowerment, understanding, and peace-of mind to people who wish to improve their financial future, build wealth for their families, and achieve financial independence. Click here to find out more about how you can work with the Denver Financial Advisors at Wisdom Wealth Strategies.
“Wisdom Wealth Strategies, LLC is a registered investment advisor offering advisory services in the states of Colorado and California, and in other jurisdictions where exempted.” This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates.
1 – napsa-now.org/policy-advocacy/exploitation/ [3/20/19]
2 – forbes.com/sites/teresaghilarducci/2018/09/13/how-to-protect-yourself-as-much-as-possible-from-financial-abuse [9/13/18]
3 – cnbc.com/2019/02/24/advisors-take-extra-steps-to-protect-elder-clients-from-fraud-or-abuse.html [2/24/19]