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Six Ways to Help Prevent Financial Elder Abuse

Have you heard about the grandparent scam? A stranger will call up an elderly person, usually late at night, claiming to be their "favorite" grandson or granddaughter and asking for help. The caller will say there has been an emergency (usually, that they are out of the country in jail) and that they need gramps or grandma to send money ASAP and to keep it hush hush from the rest of the family. 

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Believe it or not, for the last few years, these type of scams have been happening all across the country. In fact, just a few weeks ago, my own grandma told me that someone in her assisted living facility got such a call, and that he sent the money. Naturally, he wanted to help out his own grandchild and didn't know what else to do.

Last Friday, I attended a financial elder abuse conference at the Institute on Aging in San Francisco, where social workers, government agents, physicians, attorneys and advocates got together to talk about this issue and what we could do to help stop what has been called a "silent epidemic."

Though I see examples of financial elder abuse on a (sadly) very regular basis through my work, as children and grandchildren of older adults, this is something we all need to be aware of.

While it makes sense that elders with memory loss, dementia, or physical disabilities might be especially vulnerable to abuse, older adults without cognitive loss are also at risk.

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Financial elder abuse really is rampant in our society. Here are some not-so-fun facts:

  • Some research suggests that more than 35% of older adults have been affected by financial abuse in the past five years.
  • There are many types of financial abuse to look out for, including criminal abuse (scams by strangers like the grandparent scam I talked about above), commercial abuse (e.g. "fine print" scams, free lunch seminars where predatory financial tools such as reverse mortgages and annuities are marketed and sold to seniors, etc.), and undue influence or coercion by a family member or caregiver.
  • One study estimates that the annual financial loss by victims of financial elder abuse is in excess of $2.9 billion, though other research suggests that number is far too low.
  • When elders are the victims of such abuse, there can be devastating non-financial effects, including depression, loss of assets, decline in physical health, and further isolation as they feel ashamed of falling victim.

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Luckily, there are a few things that we can all do to help educate ourselves and our loved ones to try to keep these types of scams from happening to them. Here are a few ideas:

  • Talk to your parents and grandparents about any scams you hear about- the more they are aware of what to look out for, the better. Knowledge is power, and feeling confident to ask questions when they get a strange call or are presented with an offer that sounds too good to be true might mean the difference between the scammer's success and failure. Consider creating a code word within your family to ensure your identity if there really is an emergency.
  • There are actual lists for sale with titles like "1.3 million seniors with dementia and cognitive loss" and "gamblers over age 60 who believe their luck can change." Limit the number of telephone and mail solicitations they receive- click here for information on getting on the National Do Not Call Registry and opting out of many direct mail solicitations. Though these might not be 100% effective, it is worth a shot.
  • Keep an eye out for anyone that suddenly befriends your loved one- if your third cousin once removed starts hanging around grandma all the time, or if she and her insurance broker start having a lot of lunches, its ok to ask questions.
  • Break down any stigma that your parents or grandparents might have about discussing their financial transactions with you and asking questions. This can be hard- for a lot of families, talking about money is taboo, but try to bring up estate planning, investment tools, and predatory lending in a general way, then ask about their specific situations Helping them feel comfortable to discuss and ask questions is the key.
  • Start the conversation about their "affairs." We often want to avoid discussing things like wills, trusts and estate planning, because it brings up our loved ones' mortality, but, again, bringing these topics up so they can be discussed openly might prevent abuse down the road. Get a reputable attorney involved to assure that everything is in order.
  • If you find out that something fishy has been going on, take action asap, as the damage might be undone. Many reverse mortgages and other institutional transactions might have a 30 day opt out period. If there was possible criminal activity, the sooner the authorities are notified, the more likely it is that any assets can be recovered.

Lastly, here are a few resources to report activity if you suspect financial elder abuse in California:

  • To report potential criminal activity, contact your local District Attorney. For contact info in your county, go to www.cdaa.org or call (916) 433-2017.
  • If you want someone to go in and investigate, contact Adult Protective Services in your county
  • To report suspicious activity by an insurance agent, call the State Insurance Commissioner at 1-800-927-4347 or go to www.insurance.ca.gov
  • To report impropriety by an attorney, file a complaint with the State Bar of California by calling 1-800-943-9053.
  • If you aren't sure exactly what has happened, but smell something fishy, contact the California Advocates for Nursing Home Reform at www.canhr.org

Photo Credits: NJSeniorCare.com; Gerry Brague, and wiserwomen.org/index.php?id=661 

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  • Consumer Attorneys of California
  • CANHR | Elder Justice Advocates