Two recent studies on elder financial abuse were recently published- one suggesting the problem is far bigger than we think and the other suggesting it’s much smaller. In addition, there are a few government and private initiatives starting to seriously attack the scourge of financial exploitation of older Americans-considered the most prevalent form of elder abuse.
It’s a problem that Kathleen Quinn, Executive Director of the National Adult Protective Services Association, called “rampant, largely invisible, expensive and lethal” at a recent Senate Special Committee on Aging hearing on the subject. In fact, as reported in a recentForbes article titled “Why Elder Financial Abuse Is Such A Slippery Crime,” a new study asserts that financial elder abuse costs $36.5 billion annually-more than 12 times the figures that MetLife has published in the past few years. Conflicts of interest aside, it’s well accepted that much of the financial abuse with seniors often goes unreported. This can be due to shame and embarrassment of the victims. According to a New York State Elder Abuse Prevalence Study, only one in 44 cases is reported.
Each type of fraud has a different age spectrum. Investment scams peak around age 65, and work-from-home scams, dating scams, weight loss, and most Internet scams are more common at a bit younger age. Finally, theft by family members peaks much later.
While attempting to determine the extent of financial elder abuse is difficult, curbing it is even tougher. Elder abuse frequently will involve overlapping types of crimes, such as neglect and physical and sexual assault. Further, many caregivers, family members, financial services employees, and police officers simply are not trained in preventing, detecting or dealing with financial exploitation of the elderly. Add to this a lack of coordination between agencies and professionals, and you can see the scope of the issue.
Fortunately, our government is getting more involved. The 2015 White House Conference on Aging has made “elder justice” one of its four tracks. Also, a government working group known as the Elder Justice Coordinating Council, the Department of Justice, HHS’s Administration for Community Living and the Consumer Financial Protection Bureau’s Office for Older Americans have teamed up to gather data and create materials for professionals and family members. The Securities and Exchange Commission is also getting more involved. Its first Investor Advocate says one of his agency’s priorities is to give financial service professionals more effective tools to protect clients whenever an adviser or registered representative suspects financial or other abuse of a vulnerable client.
Reference: Forbes (February 13, 2015) “Why Elder Financial Abuse Is Such A Slippery Crime“
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