Sunday, February 21, 2016

Financial Abuse of the Elderly

I (Jim) have been working on two short stories this month. Although the stories are very different, they share two similarities. Both involve my series character Seamus McCree and crimes against the elderly or mentally diminished.

Fellow WWK blogger Tina Whittle and I are writing one of the stories together. That one is for an anthology expected to be titled 50 Shades of Cabernet. The co-authoring thing is a new experience for me, and I am enjoying it. (I hope Tina is, too.) The second story is my planned submission to the fourth Guppy Chapter of Sisters in Crime anthology titled Fish Out of Water.

This need of mine to write about financial abuse of the elderly is not new. Perhaps it stems from my current responsibility to handle my mother’s finances, and I am more aware of the potential. Maybe it’s because I write about financial crimes. Criminals always follow the money, and today’s retirees as a group have a lot of money. Maybe it’s because news articles have suggested the way we now treat elder abuse is similar to the way we used to treat child abuse: severely underreporting the extent of the crime, blaming victims, allowing institutional practices to remain unchallenged. Whoa! That’s a charge.

Consider these facts:

Much as child abuse often happens within the family, according to AARP, nearly 60 percent of the Adult Protective Services cases of financial abuse nationwide involved an adult child of the elderly person.[1] According to a study sponsored by the Journal of Internal Medicine, friends and neighbors account for another 17%, and paid home aids 15%.[2] In this study, only 10% of the reported cases are perpetrated by strangers.

We don’t know for sure what percentage of total financial abuse is reported. Victims are often unaware. When they do realize they are victims, they are often too embarrassed to report the crime. Sometimes they are afraid to report the crime, fearing physical or psychological abuse from the perpetrator. Those suffering from dementia, depression, or disabilities are most at risk.

Sometimes the abuse is hard to catch, taking the form of “loans” that are never repaid, cheating not only the victim, but others who should have shared in the estate. Often the crime is simple theft, extracting money from an ATM, writing checks to themselves, buying stuff with the victim’s credit cards.

Taking a few simple steps can make it more difficult for perpetrators of elder financial fraud.

(1) As early as possible make sure you (and your parents, if alive) have an estate plan in place, including a will (and/or living trust) and health directives. Discuss your wishes with family so everyone knows what is to happen if you can’t take care of yourself in the future. This may be an uncomfortable conversation with your loved ones, but bright sunshine on your finances helps makes it harder for the mold of later abuse to take hold.

(2) Be wary when “new best friends” enter the life of a loved one. Any hint of “sharing” finances or the new friend “taking care” of finances should shoot off rockets of concern.

(3) Institute checks and balances wherever possible. Only a small percentage of lawyers and financial advisors are crooks, but alarm bells should go off if your lawyer recommends a financial advisor or vice versa. Independently verify referrals. Conversely, you may be able to use a lawyer or financial advisor as a resource to help prevent financial fraud.

(4) Use technology to help monitor spending. Credit card companies provide transaction alerts, which can provide early warning of a stolen number. If you worry about a relative who is still independent but potentially at risk, you can purchase monitoring services to spot unusual activity. An example is EverSafe.[3] (I mention them only as an example of what can be purchased. I have not used them and have no personal knowledge of how well they perform.)

(5) If one family member is responsible for a parent’s assets, make sure a second person has the ability to review transactions, asset statements, etc. I use DropBox to store my mother’s credit card, bank and mutual fund statements so one of my sisters can look over my shoulder. This protects Mom and also allows my sister to easily take over if something happens to me.

(6) If anything seems suspicious, ASK QUESTIONS.

Is financial crime against the elderly a concern for you, either for yourself or a relative? What have you done about minimizing risk of abuse?

~ Jim



  1. Jim, Thanks for giving us information about financial abuse of the elderly. My mother turns 93 this week. She lives in a condo with many elderly people who could be scammed. So I appreciate your efforts.

  2. They may not be "scams," because they are legal, but I'm sure you've read about the companies that buy the rights to extended settlements for pennies on the dollar. Freddie Gray, the guy who died in a Baltimore police transit vehicle, had recently sold his "lead money" to a company, and soon would not have that income. Since the income is given in that way to people judged not competent to handle a large settlement, and because the lead poisoning has seriously impaired their ability to reason things out, I think this kind of buy-out should be illegal.

    Two of my sisters kept an eye on my mother's finances. It drove them crazy that she got continual requests from religious organizations, phrased in such a way that she thought they would not be able to continue their mission (feeding hungry children, caring for poverty-stricken elderly, etc) without her $25. She couldn't afford all the $25's she was sending, so my sisters opened her a post office box, picked up the mail, and helped her sort through the solicitations, and choose one or two.

    Publisher's Clearinghouse, while once again not a "scam," strikes me as unethical. Some older folks can't read (or understand) the small "You may have already" followed by the huge "Won $1,000,000, and actually think they are winners. Anyone who works for a large assisted living facility has probably encountered someone wanting to arrange for a big celebration party on the date specified on the notice.

    And these are just the ones that don't skirt the law! I can't even imagine what goes on with people who are willing to do illegal things.

    Reminds me of a local insurance agent who didn't always forward the premiums to the insurance companies. Worked fine for him until one of the houses burned to the ground.

  3. I just received a text message from Verizon that my phone was "frozen" until I called a number in SE Pennsylvania to "answer a few security questions." I checked that my phone was fine, and reported the incident to Verizon. I had to remind the customer service rep that she might need the fraudulent phone number for her report.

    My kids were impressed that I was on top of things, but for a person confused about cell phone usage, furnishing confidential information would have resulted in identity theft.

  4. Margaret -- a good example of the outside phishing types of attacks on anyone. Elders, in general less technology proficient, fall prey more often. My better half recently received texts saying first her Google account needed authorization and later that her Yahoo account needed authorization. I asked if everything was working. She said yes, and I told her to delete the texts.

    ~ Jim

  5. Thanks for your post, Jim, and the sound advice on how seniors can avoid being victimized. The more we raise awareness about these crimes, the better our chances of stopping them. I became interested in fraud against seniors when my father was targeted by scammers by phone and by mail. In talking about the problem with friends, I discovered that everyone in my generation has stories about attempted, and often successful, scams against older relatives or neighbors. The second book in my Five-Ingredient Mystery series, Scam Chowder, revolves around those types of crimes. A good source of information about them is the FBI web page:

  6. I was so angry at a company who charged my mother for $50 worth of home improvement services. They claimed she "bought" them. I told them since my mother was in an assisted living facility this was doubtful. Then, a friend of mine, who was not elderly, was also charged the same $50 fee. She, too, hadn't bought it. Once we all complained about it, the charges were reversed, but it still takes my breath away that a seemingly reputable company would try to get away with that.

    One insurance company I had proof was paid before the due date tried to charge me a late fee because it took their company a week to process the electronic payment from my bank. They said I should know to get the payment to them before the due date to provide time for them to process my check. Yes--they did refund the "late" fee, but I'm still aghast that they tried to stick me.

    I've received those email alerts and phone calls trying to get my social security number. I laughed at the one guy and told him, "Nice try." Then, I hung up.

    This one is the topper, but then...D. C. for you. A friend and I meter parked at a downtown museum. I filled the meter with as many quarters as it would hold and then set my phone alarm so I could get back before the time was up. We got back 15 minutes before the meter was expired--only to find a ticket for expired parking on my windshield. I took a picture of the unexpired meter with my car in the background, ticket exposed on the windshield. I sent the picture to the D.C. court. Six months later the court exonerated me. But had I been a tourist, I probably would have paid the ticket just to get out of the hassle. A little money maker the city has there--so be prepared tourists!

    It's not just financial crimes against the elderly--it's against all of us. After my experiences with those two, large national and international companies, and our National City--I'm a total cynic.

  7. Jim, good blog. Fortunately, I'm still astute enough to be aware of potential scams, etc. I am getting tired of all the mail I receive for items to help we so called frail and elderly people. I don't need a hearing aid, I don't need a walk-in bathtub, or life insurance.
    Fortunately, I read the newspaper and other sources like AARP, and am well aware of scams. I don't open emails from people I don't know, either, and have never contributed to anyone
    over the phone. What I hate to get our the letters for charitable organizations that have in big red letters - FINAL NOTICE. It's impossible to give to all those I receive or even a fraction of them. And what am I to do with hundreds of address labels? I have a feeling they know my age and are hoping I'll fall for that Final Notice thing making the recipient think it's a bill that needs paid.

    I also heard on NPR yesterday that bit about Freddie Gray and numerous others scammed out of the money they were getting for lead poisoning in old apartment buildings.

    Recently, a nursing home in our area, was forced out of business because a big Tennessee company that had bought them went bankrupt from mismanagement of funds, I think, and the
    workers in the local home were no longer getting paychecks. Some stayed to help the patients, but others had to leave and look for a new job. The elderly residents had to find someplace else that would admit them, even though they'd already paid in advance for that
    month and maybe future months, too.

  8. In my day job, I'm a paralegal with an estate planning, trusts, and estate practice. We see some push you/pull me behavior among families, but are usually consulted because families want checks and balances put into place. This can result in solutions that range from agreement within the family how to handle and protect a family member, to financial guardianships, and in extreme cases, to litigation. Families need to be sensitive to the danger signs you mention, and need to look for solutions. There are so many different kinds of financial exploitation, and all are abusive to the elderly. New best friends, family members becoming gatekeepers for elderly parents, someone more present than in the past all should be warning signs.

    There are some potential pitfalls that are not misintentioned, but can have far-reaching consequences. My father received the usual Publisher's Clearing House Notice and thought it meant he had won. He called me all excited and was on his way to buy a new car. Gloria's comments about charities and final notices also figure in. In fact, keeping an eye on "charitable" spending in the elderly can be a clue that they are being conned, same with home repairs. Phony charities often play on a senior's fears of physical security, and fake home repair contractors often target senior living associations.

    It is sad that some people see our seniors as their personal piggy banks. But it definitely happens.

  9. Gloria & Kait -- the charitable giving stuff is another example of how people play on the forgetfulness of others. Sending "renewal" notices, when there was never a donation before, or the donation was only six months ago.

    ~ Jim

  10. Great post and great advice, Jim. Thank you. Also - I look forward to hearing more about co-writing from you and Tina. The idea fascinates me, and I'd like to hear how it works out. Cheers!

  11. I wish I'd read this a couple of years ago so I could have saved my elderly relatively from his "new best friend." Then again, even at 89 he's still sharp, incredibly stubborn, and would likely have told us where we could stick it. Unfortunately, he found out the hard way that she had less-than-pure intentions—but luckily it was before she was able to drain him dry. He'll be fine, but boy, did we learn our lesson! As for her, she will probably end up in one of my novels one day—as the vic, of course.

  12. Marla -- unfortunately a common story -- at least he'll be fine. And you can either fictionally kill her off or make her the perpetrator, in which case other bad things can happen to her.

    ~ Jim