Approximately one in 10 Americans aged 60 or greater have experienced some form of elder abuse — one of the most frequent forms being elder fraud and financial abuse/exploitation. The National Council of Aging estimates elder financial abuse and fraud costs to older Americans ranges from $2.6 billion to $36.5 billion annually. What causes elder abuse to happen, how are seniors targeted, how can you identify financial abuse and exploitation, how can you prevent elder fraud, and what actions should you take if you or a loved one are a victim of elder fraud?
Here's what you need to know about elder fraud and exploitation:
What causes elder abuse to happen?
Anyone of any age can experience financial abuse, but some people are at greater risk of being targets of financial crime. The elderly are easy victims of financial exploitation and abuse for a number of reasons. A perpetrator may target an elderly person because of a combination of psychological, social, and economic factors, along with the individual’s mental and physical state.
The main risks are related to:
- Social isolation
- Lack of access to support and resources
- Physical, mental, or emotional dependence
Contributing factors may include:
- Dementia and cognitive impairment
- Physical weakness
- Financial circumstances — as people age, they become bigger targets for financial abuse because they have built up savings and obtained property during their lives
- Living situations and/or the level of dependence on a caregiver
Elder abuse can be difficult to detect since most cases are perpetrated by known and trusted individuals, including family members, friends, neighbors, and caretakers. While elder financial abuse is most common from adult children, it can occur at anytime from anyone. The Consumer Financial Protection Bureau also recommends being on the look out for new friends that seem possessive or controlling of your loved one because it can be a sign of elder financial exploitation.
How are seniors targeted?
Elder financial abuse or exploitation comes in many forms. Some of the most common ways seniors are targeted include:
- Grandparent scams: This involves a perpetrator posing as a grandchild (or other relative). Fraudsters contact an elderly individual and claim to be in trouble and in need of financial help. This type of scam is typically done over the phone, by email, or through social media. To avoid these scams, protect personal information, and finances, take a moment to distance yourself from the situation. Get off the phone and call or text the person who 'supposedly' called. Use their known contact number or email address, don’t just redial the number that called you or reply to the email you received. If the fraudster is posing as your grandchild, you can also check with their parents or other family members to make sure you haven't been targeted in a scam.
- IRS scams: These types of scams involve criminals posing as the Internal Revenue Service (IRS) demanding immediate payment of supposed fines or back taxes. To seem authentic, the caller might even give a badge number and know the last four digits of your Social Security Number (SSN). It is important to remember that the IRS will never contact you by phone demanding payment or threaten you with criminal charges or arrest. If you find yourself getting a call from someone claiming to be the IRS, the Federal Trade Commission (FTC) recommends taking the following actions:
- Do not give the caller information, especially your financial or personal information
- Write down details such as the number and name of the caller
- Hang up
- Contact the IRS directly. If you think you may owe back taxes, you can call the IRS or visit their website
- File a complaint with the Treasury Inspector General for Tax Administration (TIGTA) and the FTC
- Warn your family and friends about these calls and scams
- Romance scams: Online dating scams can happen to anyone. Millions of people use online dating sites and scammers are there too, hiding behind fake profiles. Criminals prey on the lonely and will pose as a potential love interest to get your money. Signs that you may be a potential victim of a romance scam is if an online love interest professes love quickly; claims to be overseas for business or military service; asks for money and lures you off the dating site; or claims to need financial help for emergencies, hospital bills, or travel. They may even plan to visit but can’t because of an 'emergency'. The FTC recommends taking the following actions:
- Slow down and speak with someone you trust. Do not let the scammer rush you
- Never transfer money from your bank account, buy gift cards, or wire money to an online love interest. You will not get it back
- Contact your financial institution right away if you think you've sent money to a fraudster
- Report your experience to the online dating site and the Federal Trade Commission
- COVID-19 Scams: Scammers take advantage of people during times of stress, fear, and uncertainty. It's important to be aware of scams related to COVID-19 like fake vaccines, test kit offers, or air filter systems. The pandemic brought a lot of changes and for persons with malicious minds, it brought the opportunity for new scams or twists on current scams like:
- Errand helper scams — Scammers offer to help with errands, then run off with the money.
- Charity scams — Be wary of charities calling you for donations. Never pay by cash, gift card, or money transfer. You should visit an organization's website to help determine their authenticity.
- 'Person in need' scams — A form of the 'Grandparent scam'. Scammers pose as a grandchild, relative, or friend and claim to be ill, stranded in another state or country, or in trouble, and asks you to send money.
- Government imposter scams — Scammers pretend to be affiliated with the government in an attempt to scam you out of money.
- Scams targeting Social Security benefits — Scammers will try to mislead people into believing they need to provide personal information or pay by gift card, wire transfer, internet currency, or by mailing cash to maintain regular benefit payments. Any communication that says the Social Security Administration (SSA) will suspend or decrease your benefits due to COVID-19 is a scam, whether the notice is received by letter, text, email, or phone call.
- Unemployment benefit scams — Scammers may try to use your personal information to claim unemployment benefits. According to The Consumer Financial Protection Bureau, some people have reported receiving prepaid cards in the mail with unemployment benefits they didn't apply for. Others have reported suspicious transactions and deposits in their bank accounts involving unemployment benefits. Once you receive the funds, the fraudster may contact you pretending to be from the government and tell you the benefits were deposited by mistake. They will then ask you to send them the money.
- Exploitation by trusted individuals like family or caregivers: This type of financial abuse may be harder to spot. Victims of exploitation by trusted individuals may be overcharged for services; tricked into signing forms that transfer the ownership of homes, cars, bank accounts, or investments without their knowledge; coerced into signing a power of attorney; pressured into altering a will; or have their debit or credit card accounts used without their consent.
How to identify elder financial abuse and exploitation:
It can be difficult for a victim to identify or openly seek help for financial abuse because of fear, feelings of shame, embarrassment, or humiliation. However, there are red flags to keep an eye out for:
- Unusual activity like large withdrawals
- Sudden changes to financial accounts like adding new names/persons onto accounts and payment cards
- Suspicious signatures on checks
- Missing account statements or bills — fraudsters will sometimes cover their tracks by altering mailing addresses or stop delivery of paper statements. The victim may also receive notices of unpaid bills or letters from collection agencies even if they have adequate financial resources
- Friends, caregivers, or relatives who suddenly insist on accompanying an older individual to the bank or credit union
At Members First Credit Union of Florida protecting our members and ensuring their financial security is important to us. Our employees are trained to spot suspicious activity and work to prevent or put a stop to elder fraud.
How can you prevent elder fraud?
Seniors and their loved ones can prevent financial abuse in a number of ways:
- Stay up to date on common financial scams
- Review all financial statements and bill each month and look for suspicious or unusual activity
- Check your credit report — you are entitled to one free credit report from each of the three major credit bureaus annually
- Protect your personal information by shredding documents like account statements, bills, receipts, or other financial records before disposing of them in the trash
- Reduce the opportunity for phone scams by registering with the national Do Not Call registry
- Consult with an attorney or trusted family member before making a large investment or purchase
- Enroll in Internet Banking or Mobile Banking notifications to alert you when a transaction is made or when the balance in your account falls below a certain amount
- Run a background check to properly screen a person if you’re hiring in-home care
What should you do if you or a loved one are a victim of elder fraud and exploitation?
Regardless of age, recovering from financial exploitation can be a time consuming and tedious journey. State laws for elder financial abuse vary. The National Center on Elder Abuse (NCEA) has a directory of state resources for victims of elder fraud.
If you or a loved one are a victim of financial abuse or exploitation, contact your financial institution. At Members First Credit Union of Florida, we’re here to help if you have any questions, need to report a lost or stolen payment card or checkbook, or need to dispute a charge.
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