Elder fraud is on the rise. According to the Consumer Financial Protection Bureau (CFBP) 63,500 elderly financial abuses were reported in 2017 by financial institutions out of an estimated 3.5 million incidents. Let’s explore this topic in further detail.
Elder fraud is a type of financial abuse that occurs within the elderly community. It comprises of different abuses including scams, fraud, identity theft, theft from family members or appointed managers, and cyber security threats. Elder fraud has become a prevalent concern in the financial sector as well as elderly care for several reasons. These reasons include:
With elder fraud on the rise, caregivers and family members should be aware of the types of abuses that are taking place in order to protect loved ones against this form of financial corruption.
According to the CFBP elder fraud perpetrated by familiars often amount to much larger sums of financial exploitation. It goes without saying that finances are always a touchy subject amongst family, especially as a parent or loved one is aging. To avoid this type of abuse friends and family members should insist that a will and/or trust be created to ensure assets are legally allocated beforehand. This should take place before the elder in question suffers from any form of diminished mental health.
To ensure that your loved one’s wishes are carried out it’s advantageous to assign a third party entity to oversee his or her assets. Understandably, a senior already experiencing diminished capacity may not have created a living will or trust. In which case, caretakers or friends can also report suspicious activity to adult care protection services. For example organizations like National Adult Protective Services Association (NAPSA) provide a directory for nationwide services including Florida, wherein you can report suspected financial abuses.
There are many different types of financial scams targeted specifically towards the elderly community. Some of these include:
Let’s explore each type of these in further detail below so that you can become a bit more familiar with these potential threats.
A lottery scam, otherwise known as a sweepstakes scam, provides the target a prize or award check with instructions to pay a fee before the award can be issued. Most people make payments because the award checks appear official. However, after deposit they learn that the checks are fraudulent.
An official agency imposter scam may begin with a phone call appearing from an official agency like the Internal Revenue Service (IRS) or Social Security Administration. These scams implement high-tech methods like call spoofing or robocalls to make it appear like the agent is calling from an official government agency. They will then pose a realistic and time sensitive threat if a fee is not paid. Some examples of threats include:
Keep in mind if you or an elder in your care receives such a call that imposes pressure to act quickly (e.g. before the termination of the call) this should immediately raise a red flag. The safest thing to do is call or visit the agency itself.
Grandparent scams are scams often conducted by fraudsters who pose as a relative needing urgent assistance. Oftentimes these scammers will call in the middle of the night or target elders who are suffering from diminished mental capacity (e.g. declining memory). Fraudsters will tell the elder they need funds for an emergency. In many cases, elders wire funds before realizing that the perpetrator was not the actual relative.
Falling victim to the above mentioned scams can be avoided by simply doing your due diligence. Some examples of due diligence include:
Reverse mortgage fraud is a scheme organized by deceitful individuals across multiple sectors include real estate, finance, and related services. These schemes are devised to target and steal equity from unsuspecting seniors. Benefits that lure seniors to such offers typically include free homes, investment opportunities, or refinancing assistance. Keep in mind that according to the FBI legitimate reverse mortgages of HECM loan products are insured by the Federal Housing Authority (FHA). If you intend to make home improvements but do not have the finances on-hand a line of credit like a HELOC is a much better option.
With the advent of online shopping and information accessibility identity theft has become more and more prevalent. Identify theft begins with access to an elder’s personally identifiable data. Criminals then use this data to commit identity theft fraud. Some examples of identity theft fraud include:
The elderly are easy targets for these types of frauds primarily because of their lack of knowledge on identity theft prevention as well as cyber security measures. Even still, an informed elder remains at risk. Risks extending outside a seniors personal control include 3rd party variables like the way an entity stores your personally identifiable data or who they share your data with. A primary example of variable risks is the Veteran’s Affairs data theft incidents. These incidents exposed personally identifiable data to unscrupulous cyber hacks. Eventually, some of these breaches resulted in class action lawsuits and awards of up to $20 million for emotional distress and identity theft monitoring.
Now that you know the different types of elder fraud taking place today it’s also important to identify measures that will help you protect your loved one’s against these types of abuses. Below are 6 tips to help you prevent elderly fraud.
Many banks have safeguards and features in place to help protect their account holders from fraud and identity theft. For example, many banks with online access and/or mobile banking apps provide two-factor authentication. Enabling two-factor authentication for all online access will ensure an added step is in place to help protect your accounts against cyber attacks. Other safeguards include:
These features help prevent fraud and abuse while also promoting control.
Our beloved elders usually have established financial patterns. Consequently, monitoring their accounts and setting red flags for outlier expenditures or transfers is certainly a form of prudent elderly fraud prevention. Some examples of unusual financial patterns include:
Once these unusual activities are identified take action to verify whether there is a further cause for concern. Then take the necessary measures to eliminate any risks.
Cyber security is an important measure that many stray away from addressing particularly because of the technical nature of cyber security. This is understandable, as even many professional entities remain perplexed by Cybersec and Fintech in general. However, when it comes to the financial security of our loved ones, it’s important to educate them on how to use the be safe when using the internet.
Some simple protections you can put in place include:
Taking these simple steps towards online security is certainly not the end all be all solution. However, it’s a step in the right direction for elderly fraud prevention.
As our current population continues to age and live longer the topics of elder fraud and fraud prevention support for caregivers will become increasingly important. Below we’ve included a few important resources to keep you informed of elder fraud regulatory updates, scam alerts, and additional resources.
If you believe you or a loved one is a victim of elder fraud take a look at
Seacoast Bank’s Security and Consumer Protection Information for more insight on how to move forward.
Topics: Protect Your Finances