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Criminals Steal $37 Billion a Year from the Elderly

Updated: Dec 17, 2018

marjorie jones
Marjorie Jones

An unknown caller reached out to Marjorie Jones, an older blind woman living alone, to tell her that she had won a sweepstakes prize. She could collect the winnings once she paid taxes and fees. Marjorie sent the first payment, but the caller continued adding conditions to convince her to send more money. She depleted her savings, took out a reverse mortgage, and cashed in a life insurance policy. Her family did not know something was wrong until she began asking to borrow money. By then, Marjorie had lost all of her life savings – hundreds of thousands of dollars. One week later, she committed suicide.

Every year, scammers target and financially exploit some 5 million seniors in America. Seniors also suffer at the hands of family members and friends who are greedy, desperate, or drug-addicted. One financial firm estimates that seniors lose almost $37 billion a year. However, the number is nearly impossible to calculate and may actually be much higher. For every case reported to authorities, as many as 44 are not reported.

The U.S. Centers for Disease Control and Prevention highlighted elder exploitation as a public health problem. Mark Lachs, from Weill Cornell Medicine and New York-Presbyterian Hospital, says that victims of elder abuse die at a rate three times faster than those who have not been abused. Families are often unable to help because they do not know what is going on. Scammers push victims to keep things like promised winnings a secret.

The victims are usually emotionally devastated due to being betrayed. Although it may look as though the senior gave consent, it is often based on manipulation or deception. In many cases, the senior has some level of cognitive impairment and is no longer able to manage his assets. Sometimes, financial judgment can decline even before normal cognition does.

It can be difficult or nearly impossible to retrieve the senior’s money. A person can give his money to whomever he wants, even if the family disapproves. But this decision is called into question when the senior no longer has capacity to make financial decisions. If an evaluation shows that the victim lacks capacity, there is a stronger criminal case. However, determining capacity is not uniform across the United States and many places lack people who can conduct thorough evaluations.

Despite the growing severity of this problem, the government’s response has been somewhat limited. The Elder Justice Act was enacted in 2010 to address elder abuse but remained unfunded until 2015 when it was allocated $4 million. In February of this year, the Justice Department charged more than 250 defendants with scams that caused nearly 1 million Americans to lose more than $500 million. Also, 39 states and D.C. addressed financial exploitation of seniors in their legislative sessions. More than half enacted legislation or adopted resolutions. Financial industries have also put into effect additional standards to help protect seniors, such as obtaining a trusted contact’s information to discuss account activity and the ability to place temporary holds on disbursements.

Unfortunately, scammers know what they are doing. They take amounts under $10,000  that will not get picked up by fraud and they steal across institutions over time. Also, nearly 60% of elder exploitation cases involve a trusted friend or family member. The exploiter may use force or the threat of force to manipulate the senior.

If you have any suspicion that your senior friend or relative may be suffering at the hands of exploiters, you should investigate his finances carefully. Talk to your seniors regularly and keep the lines of communication open. Being diligent may help prevent financial exploitation of your seniors.

SOURCE: Bloomberg


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