Financial professionals may find ideas for ways to protect older clients in a new report on elder financial abuse.
Elder financial abuse costs older Americans more than $2.6 billion per year and is most often perpetrated by family members and caregivers, according to the authors of “Broken Trust: Elders, Family and Finances,” a new report released by the MetLife Mature Market Institute, Westport, Conn., an affiliate of MetLife Inc., New York.
Produced in collaboration with the National Committee for the Prevention of Elder Abuse, Washington, and Virginia Polytechnic Institute and State University, the report describes the scope of the problem: The authors also include tip sheets that older adults, family members and others can use to prevent and detect elder financial abuse.
Elder financial abuse takes many forms, the authors of the report write. These include, but are not limited to: Fraud (including coupon, telemarketing and mail fraud); repair and contracting scams; “sweetheart scams”; false/fraudulent advice from loan officers, stock brokers, insurance salespersons, accountants and bank officials; undue influence; illegal viatical settlements; abuse of powers of attorney and guardianship; identity theft; Internet “phishing”; failure to provide contracted health care services; and Medicare and Medicaid fraud.
Here are some of the authors’ other findings:
- The NCPEA’s 2006 national Survey of State Adult Protective Services revealed that the number of victims of elder financial abuse could range from a low of 100,000 to a high of 1 million per year.
- For each case of abuse reported, an estimated 4 or more go unreported.
- The direct costs of elder financial abuse are high, and the indirect costs — including the cost of health care, social services, investigations, legal fees, prosecution, lost income and assets — reach tens of millions of dollars annually.
- Although family members and caregivers are the culprits in 55% of cases, financial losses are higher when older Americans are the victims of investment fraud scams, the report states.
The economic downturn may increase older Americans’ vulnerability, and the aging population also could push up the number of elders affected by financial abuse, the authors of the study warn.