A new study from the Justice Department found that as many as one in 20 elderly adults have been financially mistreated at some point in the recent past. Since 10,000 Americans will turn 65 every day for the next decade, the number of people susceptible to exploitation is rising dramatically. In 2011, MetLife called elder financial abuse the "Crime of the 21st Century."
Elderly financial scams are insidious crimes in which older Americans may lose all or a significant portion of their life savings, representing their security, their health, their independence and their entire way of life. Since our brains have been found to show diminished response to untrustworthiness as we age, the likelihood of being scammed as we get older continues to increase. The reason these scams are so heartbreaking and heinous is that senior citizens most often do not have the luxury of time or the gift of good health in order to be able to earn back what's lost.
'Criminals' aren't the only culprits
The scary thing is -- it's not just "criminals" who are to blame. According to a report by The New York Times, an estimated five million older Americans are victimized by a trusted person in their lives: a caregiver, friend, family member, lawyer or financial adviser.
Many of these cases of fraud aren't even reported, because older people are reluctant to report crimes committed by relatives and friends. Amy Mix, a lawyer at the AARP Legal Counsel for the Elderly, says, "We see many cases where someone convinces an older person to give them the power of attorney, and then uses that authority to strip their bank accounts, or take the title of their home."
Read more: 9 places you should never use a debit card
How $20 can easily turn into $2,000
Scammers typically aren't content with settling for small dollars once they realize there is money in the bank. According to a study by True Link Financial, the overall cost of elderly fraud is 12 times previous estimates -- about $36 billion dollars worth. Furthermore, financial exploitation is not a one-time crime: the study also found that seniors who lost $20 or more to financial exploitation were then conned out of another $2,000 over the next five years. The study also found older adults who receive multiple daily telemarketing calls are likely to experience three times as much financial loss as someone who receives them periodically. These scammers know that with winter weather approaching, older people are more likely to stay inside for fear of falling or driving on the ice -- subsequently making them more likely to answer the phone.
How to protect your loved ones: Do a financial check-up
With the holidays and family gatherings approaching, it can be a great time to do a financial check-up with your older family members and friends to ensure their financial well-being and future livelihood is safe. Below are some signs your loved ones could be experiencing financial abuse.
Some signs your elderly family members are being abused:
- Check the fridge: Do they have enough money to pay for groceries? If not, this might be a sign.
- Listen: Is there someone in their life they talk about that you do not know? Do they mention anything suspicious about the people you do know? Make sure you are aware of the people who are assisting your loved ones.
- Dating sites: Is your family member single? Unfortunately, lonely people are the most vulnerable to criminals. Scammers love to go on dating websites pretending to be Mr. or Mrs. Right and conning your loved ones out of thousands of dollars!
Ways to help:
- Talk to them: They may not tell you about anything suspicious unless you ask!
- Be there: Try to be present when a stranger visits your family member's home to render a service.
- Remind them: Just as they probably told you when you were young, remind them never to trust strangers.
If you think your loved one could be the victim of financial abuse or scammers, check out this page for tips on what to do about it.
Read more: 7 senior scams and how to combat them