Report On Elder Financial Abuse-An Epidemic
According to "The Met life Study of Elder Financial Abuse: Crimes of Occasion, Desperation, and Predation Against Americas Elders," older Americans are losing $2.9 billion annually to Elder financial abuse. The insurance company study published recently found that over 50% of the reported cases of Elder financial abuse were committed by strangers such as stockbrokers, financial advisors, investment advisors, precious metal brokers and other high pressure quick- rich scheme promoters. Unfortunately, the balance of these crimes were committed by the Elders own family members, friends and neighbors. In those cases involving a person known to the victim, the perpetrator through a relationship of trust and confidence gained access to the victim's financial information and accounts and seized upon the opportunity to control stock and bank accounts, forge checks and/or letters of authorization transferring funds and other assets to wipe out the Elder person's life savings.
The typical victims of Elder financial abuse were in their 80s. Sandra Timmerman, Ed. D., Director of the Met life Mature Market Institute, has concluded that "in almost all instances, financial exploitation is achieved through deceit, threats and emotional manipulation of an Elder. In addition to this psychological mistreatment, physical and sexual violence frequently accompany the agreed and disregard for financial abuse. The vigilance of friends and family can help protect Elders from those who are predatory, which may, unfortunately, include strangers or even other loved ones."
The National Center on Elder Abuse served as the primary source of information for the Met life Study on Elder Financial Abuse. The Passage of the Elder Justice Act has brought further attention and resources to this crime increasingly perpetrated on our elderly population. Most recently, the passage of the Financial Regulatory Reform Bill and establishment of the Office of Financial Protection for Older Americans has brought this epidemic to the forefront and finally seized the attention of Washington. Hopefully, not too late, because the American population 65 years and older is expected to double over the next 25 years. By 2030, the 65 and older population will comprise 72 million people or 20% of the population.
It is important that all family members, friends, financial advisers and bankers, especially, look for warning signs of financial exploitation of our senior citizens. These signs might include:
- Financial activity that is inconsistent with the senior's financial history and/or beyond his/her means (i.e., increased or unexplained stock or commodities account activity or credit card activity, withdrawals in spite of penalties, newly authorized signers on accounts)
- A care giver or beneficiary refuses to use a senior's funds for necessary care and treatment
- The senior appears confused about recent financial arrangements or transactions
- The senior is reluctant to discuss his or her finances with loved ones or others who were trusted advisors that he/she freely shared information with in the past
- Changes in the senior's property titles, deeds, power of attorney documents, wills, trusts or other documents
- Threats made by family members, neighbors or advisors to place a senior in a long-term care facility
- The deprivation of food or medication by a caregiver
- Threats of harm, neglect or abandonment if a senior does not agree to certain financial arrangements presented by loved ones or advisors
- A sudden assumed responsibility by the senior of the financial needs of a friend or family member without regard to the senior's own financial condition.
If you suspect that a senior is a victim of financial exploitation, there are steps you can take and resources available to you to help identify and remedy the problem:
- Contact local law enforcement if the senior is in immediate danger: call (911)
- Call the Eldercare Locator at 1-800-677-1116 or visit Eldercare Website
- Contact Adult Protective Services through Get Help in Your Area
- Contact the Long-term Care Ombudsmen in your state through National Consumer Voicen
- Seek information about Elder abuse from the National Center on Elder Abuse at National Center on Elder Abuse
Also, in performing its role as protector of investors, the Financial Industry Regulatory Authority (FINRA) has undertaken a campaign to remind its brokerage firm members of their duty of care to all investors, particularly our elderly investors, to evaluate the suitability of potential investments at a product level and customer specific level in light of the customer's age, retirement status, and financial condition. FINRA said that there registered representatives must consider these important facts in offering and selling securities to our senior citizens:
- The customer's employment status and how much longer he/she plans on working
- Whether the customer has any health issues that would impact his or her ability to earn income
- The customer's income and sources of income and whether it is enough to meet their daily living expenses
- The amount of the customer's retirement savings and how those funds are currently invested
- Whether the customer has adequate health insurance or will need to dip into their retirement savings to cover both expected and unexpected medical costs
- The nature of the product or strategy recommended, particularly the more complex and risky structured products and other alternative investments, which are difficult to understand by even the most sophisticated and younger customers
FINRA recognizes that its stockbroker members must use extra care in dealing with our senior citizens. Certain products or strategies come with high risk to seniors and high commissions to unscrupulous financial advisors. It's important to look out for recent purchases of its securities other than common stocks or bonds in a seniors portfolio such as structured products, variable annuities, equity indexed annuities, non-traded real estate investment trusts (REITs), leveraged or inverse exchange traded funds (ETFs) or notes (ETNs), collateralized mortgage obligations (CMOs), private placements and/or limited partnerships with restrictions, penalties and lack of liquidity.
If you have questions about certain financial transactions involving securities, commodities or other due investments recently made by a financial advisor for a loved one, contact an attorney who is knowledgeable and experienced in this area of law and finance. The most important of investors' rights is the right to be informed! This article on Elder Financial Abuse is by the Law Offices of Robert Wayne Pearce, P.A. , located in Boca Raton, Florida. For over 40 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our blog, post a comment, call 800-732-2889, or email Mr. Pearce at email@example.com for answers to any of your questions about losses your loved one or client may have suffered.