A new report suggests that financial abuse of older adults is much more prevalent than previous thought. The statistics we have been using on financial fraud and exploitation of the elderly may be way low.
If you are over 65 you probably suspected this was true. If you are like me, you receive fraudulent telephone solicitations every week, if not every day. I get a lot of robocalls from Rachel and Heather from Credit Card Services, and occasional robocalls stating that I owe back taxes to the IRS.
Unfortunately, you cannot rely on caller ID to verify the identity of the person who is calling you. Scammers use fake caller ID information to trick you into thinking they are someone else – maybe someone you trust like a government agency or a company with whom you do business. This deception is referred to as “call spoofing.” So, it is impossible to tell whether the caller ID information shown on your phone is real.
The most frequent fraudulent call I get is the “Microsoft Technical Support” scam. The caller says he/she is from Microsoft Technical Support and they have discovered a problem with the “Windows” on my computer. Of course the caller is not from Microsoft and the whole thing is a fraud. The best response is just to hang up. But a few days ago I told one of these callers (“John”) that I was writing a blog article on scams against seniors and asked if he would answer a few questions. To my surprise he agreed.
John said he had been doing this “work” for about 10 years. He said he only works one day a month. He doesn’t have another job – he makes enough from this one day to support himself. He said that the people who fall prey to this scam are generally people who don’t know anything about computers. He said most of those people end up giving him access to their computers.
I asked John why I sometimes got more than one call on the same day from “Microsoft Technical Support.” He said his group works each day on a particular geographic region. Today was “Pennsylvania” day. At this point, John apparently got bored with my questions and hung up.
Now, I do appreciate that John is in the business of lying, and that he may have just been boasting about only having to “work” one day a month. But I’m guessing there is some truth in his responses to my questions. Clearly many older adults fall prey to this and other forms of financial abuse.
How much do seniors lose to financial abuse? It’s difficult to say, especially since so much of the damage likely goes unreported. But a recent report suggests that financial abuse costs the elderly over $36 billion a year. See: The True Link Report on Elder Financial Abuse 2015. [It should be noted that True Link has a financial interest here - it sells products to protect older Americans from financial abuse.]
The True Link report is based on a survey of people who are family caregivers for older Americans. The 2,096 respondents were asked to describe the financial issues they experienced in caring for an older adult over the last five years. Elder financial abuse was defined as any time someone took financial advantage of an older adult in a way that would not have been possible when the senior was younger.
According to the survey results approximately 37% of seniors are affected by financial abuse in any five-year period. The report breaks the abuse down into three categories:
- Financial exploitation: $16.99 billion is lost annually to financial exploitation, defined as when misleading or confusing language is used—often combined with social pressure and tactics that take advantage of cognitive decline and memory loss—to obtain a senior’s consent to take his or her money.
- Criminal fraud: $12.76 billion is lost annually to explicitly illegal activity, such as the grandparent scam, the Nigerian prince scam, or identity theft.
- Caregiver abuse: $6.67 billion is lost annually to deceit or theft enabled by a trusting relationship—typically a family member but sometimes a paid helper, friend, lawyer, accountant, or financial manager.
Some of the study’s conclusions are unexpected. Because of their added exposure, seniors who are young, urban, and college-educated actually lose more money than those who are not. And seniors described as extremely friendly lose four times more to elder financial abuse.
It seems to me that our society is not yet prepared to protect our older adults from this onslaught of financial elder abuse. Existing Older Adult Protective Services Agencies and law enforcement can respond in the caregiver abuse area. But they don’t have the ability or resources to address the kinds of telephone based financial exploitation and criminal fraud seniors are experiencing.
So, don’t rely on the government to protect you from telephone scams and other financial abuse. You are going to need to educate yourself to protect yourself and your loved ones. Listed below are some online resources you can use.
And I personally suggest that we older adults all put notes on our telephones that say: “Don’t Be Nice. Hang-Up Now!”
Further Reading and Resources:
- Ten Ways to Avoid Fraud, Federal Trade Commission
- Elder Justice Initiative website, US Department of Justice
- Resources for Preventing Elder Investment Fraud, Investor’s Protection Trust
- Lies, Secrets, and Scams: How to Prevent Elder Abuse – Consumer Reports