Seniors are frequent victims of financial abuse, whether the crook is a stranger or someone the older adult knows. Sadly, the people they trust rip off seniors the most. The Consumer Financial Protection Bureau (CFPB) analyzed the financial exploitation of older Americans, by poring through government reports that looked into suspicious financial activity.
During a recent four-year period, fraudsters stole or tried to steal more than $6 billion from seniors. The criminal activity is increasing, as shown by the fact that the number of annual reports of financial abuse quadrupled during that time. Since many people do not realize they have been the victim of theft or do not report it, the CFPB estimates that the actual losses could be between $2.9 billion and $36.5 billion every year.
The Older You Are, the More They Steal from You
When the victim was between the ages of 70 and 79, the average loss was $45,300. The average amount stolen from people between 60 and 69 was $22,700. Those in their 50s, sustained average losses of $13,400.
Who Is Stealing from Older Americans?
Strangers account for 51 percent of the scams that take money away from seniors. This category includes thing like:
- Emails that say the older adult owes money to the government or the electric company;
- Telephone calls claiming that a grandchild has an emergency in another country and needs money wired; or
- “Romance” scams in which people in other countries have a fake relationship with the lonely senior, just to get him to send them thousands of dollars for the “fiancé” to fly to the United States for a visit. Of course, the person takes the money and breaks off communication with the senior.
The government does not know who the exploiter was in every case. In about 14 percent of the reports, the victim did not identify the perpetrator.
Family members, caregivers, and fiduciaries account for 36 percent of the financial abuse of seniors. A fiduciary is someone who has the authority to manage the older adult’s money, such as a broker, accountant, trustee, guardian, conservator, or someone who has a power of attorney to act on the senior’s behalf.
Who Steals the Most from the Elderly?
The sad truth is that the people they should be able to trust the most, take the lion’s share of the money from older adults. Here is how the amount of theft breaks down, by perpetrator groups:
- Strangers swipe $17,000 per victim on the average;
- Family members wrongfully take an average of $42,700 from seniors;
- The average loss from non-relative caregivers was $57,000; and
- Fiduciaries stole an average of $83,600 per victim.
How to Prevent Elder Financial Abuse
These tips can help you to shield your aging friends and relatives from becoming victims of financial abuse:
- Talk with your older loved ones and make sure they understand how to safeguard themselves from the well-known types of rip-offs from strangers. Educate at-risk relatives about suspicious emails, telephone calls, online scams and mail.
- Set up a system of checks and balances for your loved one’s finances. Never allow the person who provides the caregiving, to manage the person’s money. Have one person perform one task and someone else oversee the finances.
- Have a two-factor authentication system for any fiduciaries, so someone else always reviews the financial transactions that these people make.
- Be extremely careful when selecting a fiduciary, whether for yourself or a loved one.
AARP. “Older Americans Hit Hard by Financial Fraud.” (accessed March 23, 2019) https://www.aarp.org/money/scams-fraud/info-2019/cfpb-report-financial-elder-abuse.html