Are you really sure?
Elder financial abuse runs the gamut from stranger danger to scheming family members to unscrupulous financial advisers. Seniors in the United States are scammed out of some $37 billion a year, according to a new report by AIG Life and Retirement.
“It took a long time for her to acknowledge what had happened. She was so ashamed,” said Joy Solomon, the director and managing attorney of the Weinberg Center.
In a recent case, AIG’s call center took an order from an 86-year-old client for a large withdrawal. After all the steps to authenticate the transaction, the caller was caught on tape saying something like: “See how easy it is to impersonate my mom?”
An astute AIG representative raised a red flag to the firm’s special Elder and Vulnerable Client Care unit, said Michele Kryger, who heads the group.
Banks, financial advisers, and trustworthy family members can help seniors be more secure—without giving up their independence.
Practice Good Online Hygiene
It isn’t just seniors who fall prey to phishing scams, but some common ones target them in particular.Even so, the AIG survey found that 92 percent of seniors were aware they should not respond to strangers asking for personal information, and 89 percent knew not to click on links from unknown senders.
Name a Power of Attorney and Trusted Contact
Where many people fall short is putting a plan in action, such as drawing up official power of attorney forms and naming a “trusted contact” with financial representatives.Some 66 percent of seniors do not have (or do not even know if they have) these set up, according to AIG. Trusts and other estate plans can also help.
Choose Traceable Methods to Give Funds
How you give out money matters in scams. Cash, money orders, and prepaid debit cards are virtually untraceable. Signing over deeds and other assets is hard to reverse.Elder financial abuse is hard to prosecute, said Deb Geister, fraud subject matter expert for NICE Actimize, a financial compliance company. This is because “stranger scammers” are usually based offshore, victims often decline to prosecute family, and it is hard to pin a charge on professionals who charge excessive fees or commissions, she said.
Those methods are easier to trace. Geister had luck pulling funds back when she uncovered fraud using electronic transfers. She had an elderly relative who called for help after sending $30,000 to a catfisher who struck up a romantic relationship online. They filed a dispute with the bank, and were able to resolve it with the institution.
“It’s a good idea to get law enforcement involved, but not necessary,” Geister said. “The bank will work out how to recover the funds behind the scenes. The earlier you contact, the better.”