One component of elder financial abuse is financial scams
World Elder Abuse Awareness Day (WEAAD) was launched on June 15, 2006 by the International Network for the Prevention of Elder Abuse and the World Health Organization at the United Nations.
The purpose of WEAAD is to provide an opportunity for communities around the world to promote a better understanding of abuse and neglect of older persons by raising awareness of the cultural, social, economic and demographic processes affecting elder abuse and neglect.
According to research from AIG Life & Retirement, almost half (47%) of seniors 65 or older manage their finances—from paying bills to handling investments —entirely on their own. As a result, many seniors leave themselves at risk to financial abuse, whether through financial scams perpetrated by strangers or financial exploitation conducted by family or friends. With 10,000 Americans turning 65 every day, the number of people living with cognitive decline is reaching unprecedented heights, leaving many vulnerable to manipulation, deceit, and abuse.
“Fear is a powerful motivator. Seniors have adopted valuable defense mechanisms to shield themselves from strangers looking to take their hard-earned savings,” said Michele Kryger, head of AIG’s Elder and Vulnerable Client Care unit, among the first of its kind in the financial services industry. “But when the financial abuser is someone who knows you—a friend, caretaker or even a family member—then you need an additional line of defense: a financial professional who can help safeguard your interests.”
Given the difficult reality of cognitive decline, financial isolation comes with real risks. Through building a system of checks and balances, seniors (together with their families and financial advisors) can more effectively protect their finances from exploitation, manipulation, or financial imprudence. Kryger recommends:
- Families should consider having conversations as early as possible and involve several parties to build an infrastructure of protection
- Financial professionals can serve as an added line of defense, by acting as an impartial third party, staying alert for red flags, facilitating family conversations, and using protective tools like trusted contact and power of attorney.
- Employers can educate employees and retirees to protect against the threat.
Some common types of elder financial exploitation to look out for include:
- IRS Impersonation Scams: calls from the IRS claiming that you will be arrested if you don’t pay up on missing taxes. Keep in mind that government agencies rarely call If they do it will be only after sending you a letter first or calling you back. If the alleged government agency calls and asks for sensitive personal information or a wire transfer, it’s a scam. Also remember not to trust caller ID—scammers can disguise their number.
- Robocalls and Unsolicited Phone Calls: According to the Federal Communications Commission, there are nearly 2.4 billion robocalls made every Today, phone calls can be digitized and routed from anywhere in the world. Don’t give out personal information unless you initiated the call.
- Lottery/Sweepstakes Scams: Seniors are made to believe that they have won a lottery and need to pay a fee to collect their winnings. After seniors send the money via prepaid debit card, electronic wire transfer, money order or cash, they get 50-100 phone calls a day demanding more
- Grandparent Scams: Imposters pretend to be your grandchild or an authority figure holding your grandchild. They claim the grandchild is in trouble and needs money to help with an emergency, tricking grandparents to wire them money. Scammers say not to alert the grandchild’s parents. Ask some simple questions that only your grandchild would know the answer
- COVID-19 Scams: The Federal Trade Commission has sounded the alarm on products falsely claiming to treat or prevent the novel coronavirus, as well as fake charities. Be wary of alleged government calls to set up COVID-19 tests and avoid phishing emails touting vaccinations and home test
Kryger adds, “Whether a family lives close together or is scattered across the country, staying in touch with an aging loved one can help prevent senior isolation, reassure the senior that they can rely on family if they become victimized by fraudsters, and help family members spot signs of cognitive decline that can lead to financial abuse.”