Most seniors fail to report incidents of financial exploitation, according to new research.
In “2014 Safeguarding Our Seniors,” published by Allianz Life, one in five (19 percent) of adults ages 40 to 64 reported they have an older friend or family member who has been a victim elder abuse. Of this total, more than half (55 percent) said the victims did not report the financial abuse.
The study of more than 2,000 Americans — both potential victims (ages 65-plus) and other adults (ages 40 to 64) — finds that misconceptions persist about the most likely sources of abuse. And the financial impact on victims, though underreported, is often significant.
“Although past studies have explored elder financial abuse, it’s crucial to get a current picture to help determine how the financial services industry can best address this difficult yet preventable problem,” says Allianz Life President and CEO Walter White. “As America’s population gets older, the number of seniors with age-related cognitive impairments naturally is expected to grow.
“Greater awareness about the frequency of elder financial abuse will foster more discussion about ways to keep our seniors safe from financial exploitation,” he adds.
While the number of elders in the study who say they have suffered financial abuse is relatively small (5 percent), that number is likely an underestimate because some seniors might not self-identify or report abuse, the survey indicates. Given that the senior population is expected to surpass 54 million in 2020, the Allianz Life study suggests that millions of American seniors could experience financial abuse.
The majority of both elders (80 percent) and family/friends of potential victims (69 percent) rate telemarketing contact as the most likely source of abuse followed by Internet scams (68 percent elders; 47 percent family/friends) and U.S. Mail solicitation (52 percent elders; 39 percent family/friends).
Of those elders who report experiencing financial abuse, the incident was more likely to have been perpetrated by a family member, friend, or caregiver (52 percent) than by a stranger (22 percent). The study finds this consistent with previous research suggesting that elder financial abuse is commonly committed by people familiar to the victim.
For those who are victims, the study confirms the financial loss is often significant: an average of about $30,000. And more than 10 percent of victims say they suffered losses of $100,000 or more.
The report adds that several factors — aging, wealth and decreasing mental capacity — contribute to making the elderly vulnerable to financial abuse.
The U.S. Census Bureau projects that more than 20 percent of the total population will be age 65 or older by 2030. Among this group, many will likely hold considerable wealth. Baby boomers control more than $16 trillion in household investable assets, according to a LIMRA 2011 report.