A Startling Number of Seniors Have Been Victims of Financial Abuse
If you were getting ripped off, how would you know about it?
This article appears at the following website: time.com/money
A new survey by Allianz Life finds that about 37% of seniors have experienced financial abuse — almost double the estimated 20% that Allianz Life found when it last conducted its survey in 2014. And many of them aren’t talking about it.
“Most people think it will never happen to them. But it does. And it does on a daily basis," says Debra Whitman, AARP’s chief public policy officer.
A victim of elder financial abuse loses about $36,000, on average, according to Allianz— although other surveys have found even higher numbers. Even smaller losses can have a cascading impact on one’s financial security and stability.
In addition to the financial loss, many scam victims also suffer emotional and mental trauma and physical ailments. “We’ve even see increased mortality — a few seniors died soon after these attacks because of the stress, sadness and shame," Whitman says.
More Seniors, More Decision-Making Trouble
Of course, one reason the number of victims is growing is the expanding total number of seniors in the U.S. population — and because many are at their peak affluence around retirement age.
Some seniors are more vulnerable because of mental health issues. An estimated 5.4 million people in the U.S. have Alzheimer’s disease, which can seriously compromise the ability to make sound financial decisions.
But even without dementia, the aging brain may have trouble making sound financial decisions, doctors say. Many older Americans suffer a pattern of imprudent financial decision-making known as age-associated financial vulnerability, explains Dr. Mark Lachs, co-chief of geriatrics and gerontology at Weill Cornell Medical College.
In a paper published in October, Dr. Lachs notes that this defined pattern of imprudent financial decision-making can be particularly insidious for older adults, who may not have the time to recover from losses.
While regulators and financial companies have attempted to put some senior safeguards in place to help curtail elder financial abuse, there are several ways seniors can help themselves.
Don’t Answer the Phone
"Be very careful about how you answer your phone and who you talk to," Whitman says. When most of the baby boomers were growing up, the people who called them were friends and family. That’s radically changed, with the rise of robo calls and phone scams making it much more likely that the person on the other end of the line is not your friend.
I contacted Immediate Annuities.com to buy one of my immediate annuities. They were prompt, very responsive, paid attention to detail, understood my objectives, and were superb when it came to staying on top of seeing the funds transfer and issue of new policy documents through to completion.
AARP, in conjunction with Microsoft, found phone-related losses of more than $1.5 billion from more than 3.3 million people in the U.S. this year. If you don’t recognize a phone number, just don’t pick up — and if the caller leaves a message asking you to respond with information, don’t.
Don’t Respond to Emails Seeking Personal Info
The same is true with emails, Whitman says. Don’t reply directly to an email asking for information. Instead, check out the company’s website and find a customer service number or contact form so you can reach them directly.
When you do reach out, don’t volunteer any personal information. Instead, only provide any information they request directly.
Share Access — But Limit It
It can help to have an extra set of eyes monitoring your financial situation, especially if you’ve been a victim of fraud in the past. Allianz found that about 40% of caregivers report the people they are serving have suffered financial abuse more than once.
Many financial institutions allow you to set up view-only access, so family and friends can monitor for suspicious activity — without being able to access the funds. It’s a good idea to authorize somebody else with at least view access to your account information.
Why limit access? Unfortunately, family and friends are not always trustworthy. “We know that caregivers can protect you from abuse, but there’s also strong evidence the caregivers themselves are often the ones perpetrating the crimes against the person they are supposed to be caring for," Whitman warns.
There are also services you can subscribe to like EverSafe, which scans financial and credit records daily for suspicious activity. If potential fraud is identified, the company will alert both you and any trusted contacts you’ve identified.
Related:
Elder Financial Fraud, Annuities, and Stopping the Scam Artists
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