• James Robinson CFP

Part 1: Financial Elder Abuse

Updated: May 29, 2018

Financial Elder Abuse

Financial exploitation is by far the most common form of elder abuse. It not only leads to horrible financial outcomes for America’s Senior Citizens. It leads to bad health outcomes including depression, nursing home placement, and increased mortality.

Elder Financial Abuse occurs when someone nefariously takes or misuse the assets of a vulnerable senior adult for one’s own personal use or purpose. It is a serious problem, crossing all social and economic lines, and unfortunately, it is widespread and growing. It is estimated that over 20 percent of America’s Senior Citizens are victims…many are veterans.

Our seniors lose approximately three billion dollars each year to financial scam artists. Let not forget the downright selfishness and greed from family members who cry for help. America’s Senior Citizens, when confronted by a family member or other person who appears to be in financial trouble, want to help and may have difficulty turning down a request for money. Faced with these situations, they agree to provide money “just this once,” and yet help is usually needed again, resulting in a series of financial exploitations over time. Valuable resources are lost that were meant to provide income streams and to pay for unexpected long term care cost.

Three of America’s six generations are ripe for Elderly Financial Fraud.

  • The ‘Greatest Generation’ commonly known as the GI Generation. They were born in 1924 or earlier.

  • The ‘Silent Generation.’ They were born 1925-1945…Sometimes listed as 1925-1942

  • ‘Baby Boomers.’ There were born 1946-1964…Sometimes listed as 1943-1964. They typically have a regular source of income, such as Social Security or a pension. Younger Baby Boomer may still be working full time or part-time jobs. They may not be financially sophisticated or educated about financial matters. Some may not have the physical ability to disassociate from an environment in which they are being pressured to make financial decisions.

The factor that makes these generations most vulnerable is ego and shame. They are less likely to report fraud by a family member or caregiver due to fear of being abandoned or causing family strife. Predatory caregivers have access to a person’s home and assets as the senior may have disabilities that make them dependent on others for help.

Case Scenario: An advisor gets a call from a client. She served as a Physical Therapist for 3 years in the United States Armed Forces. Whitney is a widow, in her late 70s. She had not done badly in her civilian career as a Registered Nurse. But as all loving mothers, she had helped her sons and daughter out of rough financial patches…even in retirement. This had impacted her retirement savings in a big way. The advisor most recently had warned her that this behavior has significantly reduced her assets over the years. What was alarming about this call was that Whitney was upset that the daughter she had entrusted to handle her affairs had lied about the transfer of a large amount from her account. The transfer was to the daughter’s account.

Fortunately, the advisor had developed a relationship with the daughter on behalf of the mother. The daughter’s confessed that she and her husband had hit another financial rough patch and their air condition unit was beyond repair. With husband out of work…she was desperate. The advisor was furious…but the damage was done.

The Story Of Marjorie Jones

Bloomberg News featured an article titled ‘How Criminals Steal Thirty-Seven Billion Dollars a Year from America’s Elderly’ The author tells the story of 82 year old Marjorie Jones who trusted the man who telephoned her to tell her she’d won a sweepstakes prize, saying she could collect the winnings once she paid the taxes and fees. After she wired the first payment, he and other callers kept adding conditions to convince her to send more money.

As the scheme progressed, Jones, who was legally blind and lived alone in a two-story house in Moss Bluff, Louisiana, depleted her savings, took out a reverse mortgage and cashed in a life insurance policy. She didn’t tell her family, not even the sister who lived next door. The scammers often push victims to keep promised winnings a secret.

Family didn’t realize something was wrong until she started asking to borrow money. Ater all, she was a woman they admired for financial independence. But by then it was too late, says Angela Stancik, one of Jones’s granddaughters. Jones had lost all of her life savings—hundreds of thousands of dollars.

About one week after calling her granddaughter, Angela Stancik at the family business in Ganado, Texas, to borrow $6,000, Marjorie Jones committed suicide.

Days later, after the funeral when family members went to her home to try to make sense of it all…they found a caller-ID filled with numbers they didn’t recognize and three bags of wire transfer receipts in her closet. Jones had $69 left in her bank account...

Military Servicemembers as well as the civilian population have perfect civil rights when it comes to forms of Elder Financial Abuse. No discrimination here. You name it; fraud, scams by family members abuse of powers of attorney and guardianship, identity theft and Medicare and Medicaid fraud. Many expert agree that our nation’s elderly tend to be dependent on caregivers who may share their living space.

These predatory caregivers know how to ‘pitch’ fraudulent scams to the psychological needs of seniors. These predatory caregivers also know that memory loss makes it difficult for seniors to understand financial schemes and to understand that they were swindled.

Wealthy Americans over 80 years old control the wealth of the nation. Bloomberg Business stated that Americans in their 80s and 90s control billions of the nation’s wealth. Wealthy people in their 80s have the highest average net worth of any age bracket. One reason is that octogenarians have less than half the debt, as a percentage of their total assets, than adults under 60. Wealthy people in their 80s have the highest average net worth of any age bracket. The numbers we just mentioned are actually higher as this article was published several years ago.

Elderly Women are more than twice as likely to become victims. Men tend to die earlier and the widow ends up harboring the wealth that the results of years of savings and investing. This may be the reason that most female victims are between the ages of 80 and 89.

Elder Financial Abuse is an inconvenient truth. Evil or nefarious caregivers are not the only culprits. Age Associated Financial Vulnerability (AAFV) is real and it is one of the most common and devastating problems of aging…the decline in patients’ ability to manage their own financial affairs. It plays out as a pattern of risky behavior related to money that places an older adult at substantial risk for a considerable loss of resources that might result in dramatic changes in their quality of life and is inconsistent with choices the person made when they were younger.

The U.S. Census Bureau projects that life expectancy in the U.S. will be 77.1 years for men and 81.9 years for women by 2020. With roughly 10,000 baby boomers turning 65 in the U.S. every day, the ‘Silver Tsunami’ is predicted to raise the national health care bill to $4 trillion in 2030. Globally, the 65-plus demographic is estimated to triple from 524 million in 2010 to about 1.5 billion by 2050.

Demand for highly qualified occupational therapists, counselors, financial planners and healthcare workers has dramatically increased because of the rapidly increasing aging population.

If you are a proponent of AAFV, (I am) then you will agree that highly qualified financial planner trained in the issues of Gerontology and Geriatrics are as equally important as highly qualified occupational therapists.

As a highly qualified financial planner, I will utilize this BLOG to INFORM, EDUCATE and EMPOWER our military servicemembers.


#Octogenarians #MilitaryServicemembers #ElderFinancialAbuse #ElderAbuse #Veterans

Resources and References

  1. International Risk Management Institute, Inc. IRMI ‘ELDER FINANCIAL ABUSE’ Published by WebCE, Inc.

  2. How Criminals Steal $37 Billion a Year from America’s Elderly: Nick Leiber ‎May‎ ‎3‎, ‎2018, |https://www.bloomberg.com/news/features/2018-05-03/america-s-elderly-are-losing-37-billion-a-year-to-fraud

  3. Octogenarians Rule the Rich - Ben Steverman - Bloomberg Business

  4. Dr. Mark Lachs - Weill Cornell Medical College in New York and Duke Han - Rush University Medical Center in Chicago, coauthors of,‘Age Associated Financial Vulnerability (AAFV) October, 13th, 2015; Annals of Internal Medicine. |https://www.sciencedaily.com/releases/2015/10/151020140946.htm

  5. Discover Magazine - The Science of Aging Well |http://discovermagazine.com/2015/oct/11-age-and-enlightenment

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