U.S. Seniors Lose Billions Each Year to Fraud and Financial Abuse
Estimates of the annual cost of fraud and exploitation of the elderly in the United States vary significantly. However, there is no disagreement on one key point: those losses are counted in billions of dollars. Some recent estimates have put the cost as high as $35 billion per year.
Posted on December 1, 2017
According to the office of the New Jersey Attorney General, the Garden State currently ranks 10th in the nation in the number of residents aged 60 and older. That means New Jersey is home to many potential victims of scams and exploitation targeting the elderly—and those numbers are growing. 25% of the New Jersey population is expected to be 60 or older by 2030.
At the same time New Jersey’s elderly population is increasing, many financial professionals working with older Americans say that financial abuse is, too.
NASAA Study Highlights Vulnerability of Elderly to Exploitation
In 2017, the North American Securities Administrators Association (NASAA) surveyed its member agencies to learn more about agents’ observations of financial exploitation of the elderly. Virtually none of these financial professionals felt the situation was improving. 69% said the frequency of abuse and exploitation they observed was about the same as in prior years, while 29% said the problem was increasing.
82% of respondents said the greatest risk was to members of the “silent generation”—those currently in their early 70s to early 90s. Risk appears to increase with advancing age. 45% of suspected cases of fraud or exploitation that responding agencies reported to authorities in 2015 involved seniors aged 81-90.
Types of Financial Abuse and Exploitation Impacting the Elderly
Many of the incidents of exploitation or attempted exploitation identified by NASAA members involved variations on the “Nigerian scam,” wherein victims are invited to share in a significant amount of money in exchange for helping the fraudster transfer it into the United States. In some versions, the victim is advised that he or she has won a lottery prize, or is to receive a large inheritance from outside the country.
Other organizations, including New Jersey Adult Protective Services (APS), warn against a wide range of risks, including:
- Abuse by a fiduciary or trusted family member
- Investment scams
- Medical insurance and prescription drug scams
- Unnecessary home repairs
- Friend-in-need scams wherein the perpetrator pretends to be a friend or family member who is stranded in a foreign country, in jail, or otherwise in need of emergency assistance
Friends, Relatives, and Caregivers are the Best Defense against Financial Abuse
NASAA is encouraging its member organizations nationwide to implement policies and procedures to help counteract financial exploitation of the elderly. Many states, including New Jersey, have taken measures to protect the elderly. In New Jersey, many of those who routinely come in contact with the elderly, such as medical personnel, police, and social workers are mandated to report suspected elder abuse or exploitation.
However, those closest to the prospective victims are in the best position to recognize changes in behavior, suspicious new people in the elder’s life, or other signs that something may be amiss. Early detection can save an elderly friend, relative, or charge from a difficult and expensive ordeal.
Powers of Attorney and Other Measures Can Protect Your Elderly Loved Ones
Choosing the person or persons entrusted to oversee an elderly relative’s finances requires careful consideration. Family members are among the most frequent perpetrators of financial exploitation of the elderly. In addition, not everyone is qualified to assume responsibility for another’s financial affairs, even with the best of intentions.
However, with the right system, you can significantly reduce the risk that your elderly relative will fall victim to one of these common scams, and increase the likelihood that suspicious activity will be detected in time.
If you’re concerned about the security of an elderly relative’s finances, talk with a New Jersey estate lawyer about the options for protecting his or her assets from exploitation.
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