A Silent Epidemic
By Sylvia Thompson, CMC
He never imagined it would happen to him.
Fifty years ago, George started a small hardware store with his beloved wife, Lily. They struggled and sacrificed during those early years but George was determined to make a better life for his family…and he did. With a keen mind for business and managing his finances, he turned that first mom-and-pop shop into several, and eventually built a multimillion dollar business.
They had a beautiful home they owned outright. They took family vacations, sent their girls to college, watched their family grow and enjoyed a wonderful life…until Lily got ill and passed away. Now a widower, George continued to run the business he had created with Lily. He continued to see their friends every Friday night and their young grandchildren on weekends.
Although he appeared fine and was in good physical health, he started missing opportunities to see friends and family. His daughters were concerned he was no longer making good business decisions, and he was making large purchases which were out of synch with the man he had always been. It was then they discovered he had a new “friend” with whom he spent much time. He bought her expensive jewelry, took her on extravagant trips and made ill-advised renovations to the house with the hopes she would move in.
He was still driving and taking care of his physical needs but this was not the dad they had always known. He had depleted his assets and driven his business into the ground. His daughters tried to intervene once they saw the business was faltering and he had taken out a mortgage on the house, but it was an uphill battle. In the end, his multimillion dollar estate was reduced to $175,000. Everything he and Lily had worked toward was ruined.
Although 1 in 18 older cognitively intact adults will fall prey to fraud or financial abuse in a given year, even the slightest cognitive impairment could make someone more vulnerable. And since cognitive decline can be difficult to detect in the early stages, someone who seems to be managing well physically could actually have impaired executive functioning, affecting judgment, decision-making and other abilities key to managing finances.
Elder financial exploitation is widespread, expensive and devastating to a senior’s quality of life. This silent epidemic of fraud is a tremendous threat to retirement security with older Americans losing $36.5 billion per year due to financial scams and abuse – a drastic increase from 2005 when estimates were $2.9 billion per year. The likely cause of the increase is the population being targeted – the wealthiest generation in terms of retirement savings has come of age! So it stands to reason that predators will follow the money.
While almost 75% of abusers are family members, friends or neighbors, strangers can also manipulate their way into someone’s accounts with dangerous consequences.
What Are the Warning Signs?
- Senior’s living conditions well below his or her financial resources
- Unusual or inappropriate bank account activity reported
- Frequent checks for cash written
- Bills go unpaid or are overdue when someone is supposed to be paying them; termination of vital utilities i.e. gas, electricity, phone
- Transfer of assets to new “friends”; transfer of title for house or other assets for no reason
- Large, frequent gifts made to a caregiver, family member or friend
- Money given away or spent promiscuously
- Senior reluctant to talk about once-routine topics
- Unexplained disappearance of cash, valuable objects, financial statements
- Attempts made by a caregiver, friend, or relative to isolate the senior from others
- Power of Attorney (POA) given or recent changes in (or creation of) a will or other legal documents when the senior appears to be incapacitated
- Signatures do not resemble the senior’s signature; signed when he/she cannot write
- Senior takes out large, unexplained loans
- Unusual or increased activity around the home (improvements)
- A “live-in” caregiver refuses to leave or evasive about financial arrangements
- Appearance of a person with excessive concern regarding preserving assets instead of money senior needs or person with inappropriate interest in senior’s finances
- Appearance of property liens or foreclosure notices
- A “new friend” made quickly
- Senior does not understand his/her current finances, offers improbable explanations
How Can You Protect Yourself?
- Stay informed and alert
- Get at least 2 written quotes before having work done
- Use direct deposit and direct payment
- Secure your mailbox with a tamper-resistant lock
- Use a shredder
- Never give info over the phone unless you initiated the call to a verified number
- Protect your ATM/credit cards
- Review your banking statements
- Don’t sign papers you don’t understand
- Place checks and balances on all accounts
- Use trusted advisors to provide a safety net
- Build in oversight, especially if care providers are in the home
- If care is needed, use an agency that is licensed to provide care as well as in compliance with state and federal wage and hour laws
- Have an Aging Life Care Manager assess risk and monitor the situation
- Have a Geriatric Psychiatrist evaluate if capacity is in question
People who perpetrate fraud are very cunning, so merely being “smart” is not enough to protect yourself. It wasn’t enough for George. An ounce of prevention is worth a pound of cure, so know you are a target, watch for warning signs and enlist a team of trusted family/professionals.
Sylvia Thompson is a Certified Life Care Manager and Care Consultant with LivHOME in Los Angeles. She is a member of Torrance Memorial’s Professional Advisory Council. www.livhome.com. (323) 933-5880.