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Combatting Financial Abuse
Elder financial abuse is becoming a bigger threat and costly problem affecting elders and their families. As the older adult population in the U.S. continues to increase, so will the opportunities for unscrupulous criminals to take advantage of the wealth that many older adults have accumulated through their lifetime. While these crimes seem to be only committed by strangers, elder financial abuse is also committed by people who occupy traditional positions of trust, such as friends and relatives. Combatting financial elder abuse begins with getting the entire family and social network involved. Talk frequently with the elder. Have they been approached by new friends lately? Have they been offered a recent unique opportunity? Listening closely enough, one will be able to spot and stop scams before they go too far.
Importance to the study
Financial losses due to fraud and abuse can undermine the ability of older adults to continue to live in their own homes and afford their long-term health care needs. This stress can take a great toll on the elder. Many older individuals experience increased health problems that can lead to serious depression all due to the increase in financial loses. Perhaps worse is the loss of trust older adults develop in others and themselves after being the victims of financial fraud.
Financial Fraud is a Widespread Problem
In 2015 alone, older adults lost a total of $36.5 billion because of financial fraud and scams. Seniors who are socially isolated and/or in mental decline can be especially susceptible. The abuse can leave victims traumatized as well as financially harmed, or even ruined. The fear is the problem could worsen since more than 10,000 Americans turn age 65 every day.
An estimated one in five older adults has been the victim of financial fraud. Many of these victims are stripped of their assets and left with little to live on. Many of these victims rarely see their money returned even if the criminal is caught. And of course, many people don’t report the crime at all. The Federal Trade Commission says one in 24 financial elder abuse crimes ever get reported.
What are some statistics of Elder Financial Abuse?
Most analysts go with the 2010 Investor Protection Trust Elder Fraud Survey which said one in five Americans over the age of sixty-five, has been victimized by a financial fraud and a 2011 MetLife Mature Market Institute study determining that financial exploitation costs seniors at least $2.9 billion annually. At the other end of the scale, True-Link, a company that provides account-monitoring software for elders and their families, has projected that financial elder abuse costs families more than $36 billion a year, 12 times the MetLife estimate. True-Link arrived at its estimate by surveying family caregivers of older people. Defining financial elder abuse is very difficult because of the wide estimates of what is considered financial elder abuse. Many know it’s a problem but how big the problem is quite hard to say, because hard data is so scarce. The reason for this scarcity is due to the fact financial abuse often goes unreported, because the victim often feels shame and embarrassment.
This paper will explore financial abuse and how to combat financial abuse in the elderly population.
Many theories have been proposed to help explain financial elder abuse. Such theories have mainly been adapted from other fields such as child abuse and intimate partner abuse.
Although the literature covers a wide variety of these theories, this review will focus on several major themes which emerge repeatedly though out the literature reviewed. These themes include: how prevalent is elder financial abuse, who is committing elder financial abuse, what effects does financial abuse have on its victims and what can be done to help prevent elder financial abuse. Although the literature presents these themes in a variety of contexts, this paper will primarily focus on their application to how devastating elder financial abuse can be to its victims.
The prevalence of financial elder abuse is on the rise. As baby boomers are now in retirement criminals are taking advantage of this ever-increasing opportunity to steal from them. Burns, Henderson, Charles, Sheppard, Zhao, Pillemer and Lachs (2017) suggests that, “Approximately one of every 18 cognitively intact older adults living in the community experiences financial fraud or scam each year.” It is felt that elder financial abuse can be considered a sort of financial exploitation. This exploitation occurs when the perpetrator misuses or takes the elder’s money for their own personal benefit. This frequently happens without the knowledge or consent of a senior, depriving them of vital financial resources.
The rising number of seniors only increases the opportunities for perpetrators to practice their art of stealing. The question that begs to be answered is who would do this to our most vulnerable generation?
Perhaps the most tragic element of elder abuse is the fact that in many cases, the perpetrator is a trusted friend or family member whom the elderly person thinks is acting in their best interest. A popular way to gain access to the elder’s finances is through using the services of a lawyer. Lawyers need to be aware of the ways in which their services may be used by family members or caregivers as a means of financial abuse. Hannah (2016) say’s “Often, a lawyer may be asked to draft documents that provide an elderly person’s family member or caregiver with an opportunity to steal the elderly person’s possessions. “A story was once told about a distraught sister, convinced that her brother was stealing from their parents. The daughter was concerned because the son was given total control over their parent’s affairs. This gave him the legal authority to make both financial decisions without being accountable to anyone else and all healthcare decisions as well. When asked if the daughter had called Adult Protective Services, she said, “no because she didn’t want to get her brother in trouble.” Perpetrators are not limited only to the ones the senior might know, there are others.
Seniors control a major portion of the nation’s wealth. Thieves go where the money is and realize that the elderly often suffer from cognitive and physical disabilities and are vulnerable. Also, many seniors are socially isolated, lonely and have no one to consult with on financial matters thus making them susceptible to manipulation. Goergen and Beaulien (2010) explains, “Perpetrators pretend trustworthiness by posing as relatives when they call the elderly on the telephone or pose as craftsmen at victims’ doorstep, or they appeal to victims’ readiness to help by pretending to be a family member in a situation of distress and needing support.” Another sad story was told, when a man prompted an elderly woman to sell her home and wire the money to a mysterious bank account. The man, who claimed to be communicating from another country, promised to marry her. It was all a scam. Today, the woman is homeless. When asked why she did that, she said, “well that’s what you do when you’re in love.”
People committing financial fraud schemes are experts in deception, and very good at coming up with new ways to trick unsuspecting victims. They have learned to be experts in manipulation. Tacchino (2017) says in some cases, the elderly client feels responsible for what happened and they are too embarrassed to make a complaint. Suffering victimization can lead a senior to withdraw and have an increasing feeling of hopelessness. Faced with financial loss, some victims may contemplate suicide. Additionally, having money stolen in retirement can make it difficult for the elderly to afford needed medical care which can cause medical conditions to worsen.
While it’s important to understand the signs of elder abuse, it may be more productive to take steps to prevent abuse from occurring in the first place. Oumlil and Williams (2011) Given the significance of the elderly consumer market in the development of successful and comprehensive marketing strategies, it is imperative that marketing decision-makers and policymakers better understand and respond to the varied needs of this significant consumer segment. Family conversations can help gain insight into the senior’s affairs and mental state. Jackson (2015) explained, people who have been battling financial exploitation are pleased to observe the increased attention that financial exploitation is receiving at all levels of society. Family discussions between elders and adult children could serve as a much-needed reality check. Ideally, conversations on these matters should take place well before retirement, to ensure that elders are adequately prepared. This will give the whole family the time needed to anticipate, plan, and make smarter, more informed decisions.
In identifying weaknesses and gaps, one question would be how often are perpetrators caught and what are the penalties that they would receive. There is very little to no news of anyone being fined or sent to prison for stealing an old person’s life savings.
In conclusion, focusing on these five major themes which have emerged though out the literature reviewed include a better understanding of the prevalence in elder financial abuse, who is committing elder financial abuse, what effects financial abuse has on its victims and what can be done to help prevent elder financial abuse. Hopefully this will show how devastating elder financial abuse can be.
An interview with Joe F. who wished to remain anonymous is 77 years old. He had the unfortunate experience of someone trying to trick him into sending money under the false impression of helping a family member out of a financial jam. Joe became an unwilling expert in the popular scam which is commonly known as the grandparent scam. Goergen and Beaulien (2010) explain, that perpetrators pretend trustworthiness by posing as relatives when they call the elderly on the telephone or pose as craftsmen at victims’ doorstep, or they appeal to victims’ readiness to help by pretending to be a family member in a situation of distress and needing support. It is so simple and so devious because it uses one of most reliable assets seniors have, it’s their hearts.
Scammers will place a call to an elderly person and when the senior picks up, they will say something along the lines of: “Hi Grandpa, do you know who this is?” This is exactly how Joe said his unsuspecting scam call started out. He said when he answered the phone, the voice on the other end was hard to recognize, the excuse was given that it was a bad cell phone signal. The unsuspecting grandparent guesses the name of the grandchild the scammer most sounds like. By doing this the scammer can establish a fake identity without having to do any background research. Joe said, “Is this Jack?” The voice on the other end said, “yes, its Jack.” Once the fake grandchild identity is established the scammer will usually ask for money to solve some unexpected financial problem such as overdue rent, payment for car repairs, etc.
In Joe’s case the caller said they were in a traffic accident and needed some money to have the car towed. Often the scammer will ask money to be sent via Western Union or MoneyGram. Often money transferred this route does not require identification to collect. At this point, Joe began to be suspicious because Jack only has his learners permit and would not be driving alone. So, Joe began to probe further by asking where Jack was. The voice on the other end was reluctant to say. Often the scam artist will beg the grandparent, “please don’t tell my parents, they would kill me.” By this time, Joe felt like this was a scam and hung up the phone.
These scams are likely to be done hundreds of times on unsuspecting seniors just like Joe. The fact that no research is needed makes this a scam a popular one that can be perpetrated over and over at very little or no cost to the scammer.
After the call, Joe went on to say how vulnerable he felt. He said they knew my number, they knew my name and now they know my grandsons name. Then he said, “my feelings of vulnerability turned to anger.” These feelings are common with the victim. Imagine the heightened feelings of vulnerability and anger knowing they had stolen your money as well. Joe said he was glad I was doing this research on this topic and hopes this will help others be more educated about how to avoid being victims of this type of financial abuse.
Brian’s Story is about financial elder abuse that happens when the perpetrator is known to the victim. Brian’s brother, stole thousands of dollars from him when Brian moved into an assisted living center. Brian’s retirement funds began to disappear after his brother was granted power of attorney to take care of his finances. After Brian had a visit with his son, they uncovered that Brian’s brother had lied to him about the selling price of his condominium. The price was $156,000 more than what is brother had said the condo sold for. When he returned home, Brian unsuccessfully tried to address the subject with his brother. Things took a turn for the worse when he got a letter from Medicare that said that because he hadn’t paid his premiums he was suspended from the program. His brother had neglected making these payments. For Brian, taking his brother to court proved futile. Through a series of consultations, Brian said he was told that even if his brother did get convicted, he would be dead by the time he would recover any of the money. But Brian isn’t letting his financial woes keep him down. His attitude is inspirational. Brian is not alone. So many elders will be financially abused annually, and the numbers will continue to rise, because many seniors are likely too scared or otherwise unable to seek help.
As many of us have parents that are elders or we might be elders ourselves, it is important to understand how prevalent elder financial abuse is. It is imperative to know who is committing elder financial abuse, to understand what effects does financial abuse have on its victims and what can be done to help prevent elder financial abuse from happening.
Some have argued that financial elder abuse is not very common because the news seldom carries stories of such cases. However, findings from Burns, Henderson, Charles, Sheppard, Zhao, Pillemer and Lachs (2017) suggests that approximately five percent of cognitively intact older adults living in the community experiences financial fraud or scam each year. As the increase of baby boomers now in retirement criminals are taking advantage of this ever-increasing opportunity to steal from them. As a home health nurse, I am finding that financial elder abuse is happening more and more due to the increased complaints reported by my patients.
So why are the elderly so vulnerable? Thieves go where the money is and realize that the elderly have it. To make getting it easier, many seniors often suffer from cognitive and physical disabilities making them more vulnerable. Goergen and Beaulien (2010) explains, perpetrators pretend trustworthiness by posing as relatives when they call the elderly on the telephone or pose as craftsmen at victims’ doorstep, or they appeal to victims’ readiness to help by pretending to be a family member in a situation of distress and needing support. This is what happened to Joe F. but he was one of the lucky ones who figured out it was a scam. Too many other seniors fall victim and lose.
It seems simple enough not to trust strangers but who can protect the senior when the abuse is coming from someone known and trusted? Lawyers need to be aware their services may be used by family members or caregivers as a means of financial abuse. Hannah (2016) often, a lawyer may be asked to draft documents that provide an elderly person’s family member or caregiver with an opportunity to steal the elderly person’s possessions. Education provided to law firms includes reviewing the tactics of a potential perpetrator and how they seek to gain access to a senior’s finances. This education is helping to reduce the incidences of elder financial abuse.
As a home health nurse, I will use this research to help educate the elderly patient population that I serve. One of a nurse’s primary ethical responsibilities is to work with the patient to provide care that maximally enables the physical, emotional and social well-being of the patient. A nurse is also responsible for protecting and advocating for patient’s safety and rights. Protecting the elderly patient from financial abuse is truly advocating for your patient.
Nurses also have a responsibility to work with the public and other professionals to foster local, community, and national efforts to improve the financial safety of the elderly population.
I have learned to be more empathetic, to help provide emotional support by listening and allowing patients to express how they feel about be a victim of financial abuse.
The older adult is often ashamed to admit that they have succumbed to financial abuse. Nurses have a unique opportunity to talk to their patient who have been victimized about their feelings and may also be able to suggest a referral to a professional who is experienced in dealing with financial abuse victims. The nurse may also be the first person to recognize symptoms of depression or suicidal intent of abused elderly victims.
The elderly population is entitled to a safe, quality life free from financial abuse. Many nurses and other professionals are working to enhance this safe quality of life for the elderly. This article has reviewed what these health care providers and other professionals have already done to promote safe financial environment and suggests activities that can further enhance the safety of our care of the Elderly form financial abuse. Nurses are playing, and will continue to play, an ongoing role in the movement to protect the elderly from financial abuse.
Burnes, D., Henderson, Charles R., Sheppard, C., Zhao, R., Pillemer, K., & Lachs, Mark. (2017). Prevalence of financial fraud and scams among older adults in the United States: A systematic review and meta-analysis. American Journal of Public Health, 107(8), E13-E21. doi:http://dx.doi.org/10.2105/AJPH.2017.303821
Goergen, T., & Beaulieu, M. (2010). Criminological theory and elder abuse research–fruitful relationship or worlds apart? Ageing International, 35(3), 185-201. doi:http://dx.doi.org/10.1007/s12126-010-9063-2
Hannah, J. M. (2016). Financial abuse of the dependent elder: A lawyer’s ethical obligations. Family Law Quarterly, 50(1), 117-121. Retrieved from https://ezproxy.southern.edu/login?url=https://search.proquest.com/docview/1807742181?accountid=28568
Jackson, S. L. (2015). The vexing problem of defining financial exploitation. Journal of Financial Crime, 22(1), 63-78. Retrieved from https://ezproxy.southern.edu/login?url=https://search.proquest.com/docview/1648112727?accountid=28568
Oumlil, A. B., & Williams, A. J. (2011). Financial services and the elderly poor: Development and implementation of sustainable intervention strategies. Journal of Financial Services Marketing, 15(4), 274-286. doi:http://dx.doi.org/10.1057/fsm.2010.23
Tacchino, K. B. (2017). Preventing financial elder abuse. Journal of Personal Finance, 16(1), 78-88. Retrieved from: https://ezproxy.southern.edu/login?url=https://search.proquest.com/docview/1925859899?accountid=28568
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