Senior Communities Suffer $3.4 Billion In Loss Due to Fraud and Scams in 2020. What can be Done?
When older adults, especially those in long-term care facilities, become victims of a scam, it is known as elder financial abuse, and it is more common than you’d think.
In 2020, over 62,000 Suspicious Activity Reports filed with the federal government were regarding elder financial exploitation, amounting to $3.4 billion, according to the federal Consumer Financial Protection Bureau (CFPB). The average reported loss by elder financial abuse victims is around $60,000.
So how does elder financial abuse happen?
“Unfortunately, there can be financial mistakes, fraud, or identity theft that occurs as a result of living in this kind of community. There are also instances of improper or inflated billing, double bill, and identity theft by ‘bad apples’ on staff,” said Elizabeth Loewy, the former founding chief of the Elder Abuse Unit in the New York County District Attorney’s Office, in an interview with Nextavenue.org.
The COVID-19 pandemic also led to a rise of scams targeting vulnerable adults, as do other “times of crisis”, according to Kelly LaVigne, vice president of consumer insights at Allianz Life.
This kind of abuse can be detrimental to an assisted living resident, who may find themselves at risk of having to move-out or lose their housing due to not being able to pay for it. While no one wants their parent or loved one to become the victim of elder financial exploitation, there are a number of methods that can help protect against just that.
Ways to Prevent Financial Elder Abuse:
- Know Your Resources:
The CFPB released a manual for preventing elder financial abuse in assisted living and nursing facilities called “Preventing Residents from Financial Exploitation“. The guide outlines ways that professionals can recognize the signs of financial exploitation, put protocol into place to protect their residents, develop training for staff, as well as providing a list of common scams that target older adults.
There is also AARP’s Thinking Ahead Roadmap, which is a preventative resource that advocates for choosing someone trustworthy as your financial advocate or power of attorney. There are also online monitoring services, like Carefull and Eversafe, which help to identify and bring attention to any suspicious behavior on your financial accounts.
- Start a Conversation:
The best way to prevent elder financial exploitation is to get in front of the problem. Loewy suggests sitting down and talking with your older parents about scammers and the ways in which they might try to take advantage of them. Talking openly can help, even with those in assisted living for memory impairment issues.
“I have talked to hundreds, if not thousands, of older people with dementia. And even people with moderate to severe dementia have lucid intervals sometimes, where they can talk to you. If there’s any way you can, get in front of problems, by talking about common scams and ways people are defrauded,” said Loewy.
- Form a Trusted Team:
To be sure that everyone is looking out for the best interests of their older loved ones, it’s recommended by Loewy that a team of trusted individuals come together to help monitor accounts, including the family lawyer or a trusted friend of the family.
“So many older adults defer to one child, and unfortunately, sometimes that kid can be a problem,” said Loewy.
- Listen: One of the simplest things that you can do is simply listen when an older adult tries to discuss a concern with their finances with you.
“One of my rules for prosecutors was: Don’t assume that a person who’s seventy-five, eighty-five, ninety-five or older is just paranoid,” Loewy said.
Loewy recommends first listening to their concerns, and then taking a look into their finances to check for any irregularities.
You can also report suspected elder abuse in the state of Ohio, which we covered in a blog post from December 7, 2019, Elder Abuse – What Must You or Should You Do?, to your local Adult Protective Services, supervised by the Ohio Department of Job and Family Services. You can contact your local county agency or the state’s toll free hotline number at 1-855-644-6277.
PUBLISHER’S NOTE: I want to thank Kaylyn Hohn for writing this blog article. She is our newest paralegal and is doing excellent work at HCM&M! Thanks again Kaylyn!
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Joseph Balmer manages the Probate, Trust and Estate Administration department at Dayton, Ohio, law firm, Holzfaster, Cecil, McKnight & Mues, and has been certified by the Ohio State Bar Association as a specialist in Estate Planning, Trust and Probate Law since 2006.