One in five Americans age 65 and older has been impacted by fraud, according to a survey by the financial education organization Investor Protection Trust. Holiday time in particular is high season for these illegal actions.
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It is estimated that individuals who have been deceived lost an average of $430, with national overall amounts exceeding more $9.5 billion. Law enforcement and eldercare agencies report that financial scams targeting older adults have become so prevalent that they are now considered “the crime of the 21st century.
The methods through which the elder consumer can fall victim to financial exploitation may present in many forms. However, with data suggesting that elders make twice as many purchases over the phone than the national average, a very common practice targeted towards elders is telemarketing fraud. Some examples of this type of illegal behavior includes letting the victim believe that they have won a vacation or prize but have to pay additional charges or share financial information in order to collect the gift. Another, reprehensible scheme may have the caller impersonating a grandchild or family friend requesting assistance to help them out of a bind. This could range from an “unexpected” hospitalization, or financial crisis. Often times the caller will ask the elder not to share this request with family. The caller may also suggest means through which funds can be sent that are not easily tracked. This leaves them more vulnerable to financial exploitation.
Elders who have recently assumed the role of managing their finances may be more at risk for being targeted by a fraudulent telemarketer. Maggie Flowers from the National Council on Aging writes, “Scam artists know that many older adults have fixed incomes, which may make them more susceptible to fraud, because there may be an openness to learn about ways to make money and pay their bills.”
Financially secure elders are also in a high-risk category for fraud, as thieves may presume that years of saving could equate to a healthy checking account. Older adults who are social isolated and those who are unaware of a decline in cognition may also be at increased risk for financial exploitation. An MIT study pointed to another reason for elder susceptibility to fraud stemming from a higher level of trust among older adults. It is important to note that, a study from the financial organization True Link found that older adults who get multiple daily telemarketing calls are likely to experience three times as much financial loss as someone who receives the occasional telemarketing call.
The FBI reports that elder victims of scams often do not report telemarketing fraud. Law enforcement professionals acknowledge that the underreporting may be due to feelings of shame at being scammed.
The elder may also avoid discussing a fraudulent act out of concern that family may intercede too aggressively by having the elder feel that their independence may be threatened.
To help minimize the risk for fraud, heed that adage that if it sounds to good to be true, it probably is not true. A general rule is to not to share information regarding access to financial information over the phone.
If a caller offers a prize, request that information be mailed to a home address for further review. If told that an immediate response is needed in order to receive the cash reward or prize, then decline the offer.
If the caller discourages investigating the company by discussing with family or a reputable consumer protection company, then it’s best to hang up. Those who serve as their loved one’s financial proxy, it is strongly encouraged that you connect with a financial specialist to learn about the most effective practices for protection from potential scams.
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Marci Vandersluis is a licensed social worker and has a master’s degree in gerontology. She is employed as a care manager assisting older adults in the community connect with needed services. Email: firstname.lastname@example.org.