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Financial Planning > Behavioral Finance

Financial abuse of elderly on the rise

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A new study by MetLife has documented an increase in the financial abuse of seniors by criminals, mostly strangers. According to the “MetLife Study of Elder Financial Abuse: Crimes of Occasion, Desperation, and Predation Against America’s Elders,” older Americans lose an estimated $2.9 billion annually to financial exploitation, up 12 percent from an estimated $2.6 billion in 2008, the previous time the study was undertaken.

The study was conducted by the MetLife Mature Market Institute, the National Committee for the Prevention of Elder Abuse (NCPEA) and the Center for Gerontology at Virginia Polytechnic Institute and State University. Researchers tracked media reports of crimes against older Americans from April through June 2010. Here are the highlights of what they found:

  • Crimes involving strangers as the perpetrators made up more than half (51 percent) of reported cases, followed by family, friends and neighbors (34 percent).
  • Robberies and crimes classified as “scams perpetrated by strangers” rose from 9 percent to 28 percent between 2008 and 2010.
  • Exploitation from the business sector accounted for 12 percent of the reported cases.
  • Medicare and Medicaid fraud made up 4 percent of the documented misdeeds.
  • Women were nearly twice as likely to be victims of elder financial abuse as men.
  • Most victims were between the ages of 80 and 89, living alone and required some help with either health care or home maintenance.

MetLife also studied elder abuse news reports during the holiday season (November 2010 through January) and found that dollar losses due to abuse instigated by either a family member, friend or neighbor in that period were higher than any other category.

When the crime was carried out by a stranger, the most common scenario was when a victim was out shopping, driving or managing financial affairs. The criminal looked for signs of vulnerability, such as handicap tags on cars, walking canes or outward confusion. Crimes included cons, purse snatchings and physical assaults.

In cases when the victim knew the criminal-most likely a caretaker, handyman, “friend,” child or lawyer-the perpetrator forged checks, stole credit cards, pilfered bank accounts, transferred assets and “generally decimated the elder’s financial safety nets,” according to the study.

“In almost all instances, financial exploitation is achieved through deceit, threats and emotional manipulation of an elder,” said Sandra Timmermann, Ed.D., director of the MetLife Mature Market Institute, in statement detailing the study. “In addition to this psychological mistreatment, physical and sexual violence frequently accompany the greed and disregard of financial abuse. The vigilance of friends and family can help protect elders from those who are predatory, which may, unfortunately, include strangers or even other loved ones.”

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