Financial exploitation of seniors is reaching epidemic proportions and seniors do not have the necessary information to fight back, according to a new survey on fraud perpetrated on the elderly.
Of the 756 social workers, caregivers and others surveyed, nearly 65 percent say they very often or somewhat often deal with elderly victims of fraud and financial exploitation. Nearly all feel it is a very or somewhat serious problem and nearly all feel older Americans are vulnerable to investment fraud.
The survey was conducted by the Investor Protection Trust, a not-for-profit investor education organization, and the Investor Protection Institute, a not-for-profit research and education organization, in conjunction with the Consumer Financial Protection Bureau.
It included social workers, health care professionals, law enforcement, protective services, securities regulators and financial planners, as well as others who deal with the elderly.
"Elder financial abuse is not only about financial exploitation: It is a major public health problem," says Dr. Mark Lachs, Psaty Distinguished Professor of Medicine at the Weill Cornell Medical College in New York. "When older Americans are financially exploited and there are no resources left for their care, these individuals effectively become wards of the state. This is a major problem and we know there is significant underreporting.
"I am an epidemiologist, and what we are looking at here qualifies as an epidemic," he adds. A senior citizen's annual physical may be the only opportunity for a professional to intervene. The Investor Protection Trust, through its Elder Investment Fraud and Financial Exploitation Prevention Program, is training medical professionals to watch out for impaired mental capacity that can lead to financial abuse.
Financial abuse does not occur just at the hands of strangers. Nearly 80 percent of those surveyed feel theft or diversion of funds occurs at the hands of family members, while 50 percent say it also is perpetrated by caregivers and 41 percent say it is done by attorneys or guardians. Some 46 percent say it happens at the hands of strangers.
The best means of combating elder fraud is through programs delivered by local professionals (70.6 percent), through senior centers (65 percent) and in person (70.7 percent), according to those surveyed.
Currently, 51.2 percent of the respondents feel older Americans are unable to determine the legitimacy of financial professionals, 38 percent feel current efforts at maintaining the legitimacy of financial professionals are not very effective, and more than half feel the resources available to seniors to select appropriate financial advisors are not effective.
"Our new survey shows that financial swindles targeting older Americans are a bigger problem today than ever before and that seniors need more help," says Don Blandin, president of Investor Protection Trust. "There is no 'silver bullet' that will end the financial abuse of America's seniors. Putting a major dent in the problem will require new and innovative collaborative efforts by many different experts and organizations."
-Karen DeMasters