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Who Scams The Elderly?

Our population is aging. As our families grow older it our lives get busier. Often we are working full time with kids in school and trying to care for our aging parents. This job gets tougher if we live across town or across the state.

Who scams the elderly?

Because we cannot watch our parent’s every move, they become more and more vulnerable to unsavory scammers. These scammers can be on the computer, phone, door-to-door sales people or even people who work in the financial industry. For example, if someone sells an 85-year-old a policy that does not mature for 25 years, this can be considered fraud and elderly financial abuse.

The saddest and more emotionally-wrenching type of elderly financial abuse is when a family membercaregiver or trusted friend is the perpetrator. Knowing that our elderly loved ones are at risk is the first step to preventing elderly financial abuse. The second step is recognizing the signs.

Why the elderly are targets

The elder are targets of financial abuse for three main reasons:

  1. People over 50 in the United States control 70% of the wealth
  2. Over 24% of people over 80 have some form of dementia according to the National Institute on Aging
  3. Many older people live somewhat isolated lives and do not have constant contact with trusted family members or advocates. This allows them to be taken advantage of, even by other family members who have gambling or substance abuse issues.

What to look for

The last thing we want for our parents or elders is for them to be taken advantage of or abused. If you are concerned for your elderly loved on watch for these signs:

  • Missing or “loaned out” property:  Expensive jewelry, art, or even a car.
  • Signatures that look odd
  • Unexplained withdrawals
  • A sudden new best friend or sweetheart
  • Important financial information that is no longer coming to the address of your elderly loved one

Look for patterns. Also, if you are able keep a log of who is “visiting” your elderly loved one.

Understanding dementia

If you suspect that your parent or elderly loved one is struggling with mental or cognition issues it is best to set up an appointment with a doctor or specialist. Dementia is a term used to describe a variety of diseases and conditions that affect the nerve cells in the brain. Alzheimer’s disease is one form of dementia.

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Grandma won the lottery! (Or was just scammed)

In this technological age, we often forget about snail mail, but scammers haven’t. Increasingly scammers are using traditional mail to target the elderly. This may be because many older people are not on social media and do not use email.

Many older adults also still write checks. Scammers are on to this and have tailored their fraud campaigns to checks.

Here’s how it typically works

A scam artist creates what looks like a winnings sheet, possibly even an A- 41 form that says “Prize Award Notice” requesting a “payment data transfer.” It all looks legit. Until you read the small print that says the correspondence “is not an award notification.”

The hook

Many elderly folks are fearful that they will not have enough money to last them. They worry they will not be able to pay their medical bills, the taxes, for nursing home care, or that they will not be leaving anything to their children. The scammers know this and hook the elderly by promising more and more money with each check they request. At first the scammers say to send in a $20 processing fee. But once the scammers get that check, they continue to send demands for more fees until their victim has run out of money.

Using international processing centers

The scammers typically run these checks through “payment processing centers” and after a cut by the processing center receive a wire transfer. These centers, such as PacNet Services, Ltd. in Canada, claim to serve universities, publishers, charities and marketing operations. PacNet claims to vet the companies for which they process payments, but said in a statement to CNNMoney that they do not verify all campaigns or material.

But PacNet’s inattention has cost many elderly victims dearly. One unsuspecting elderly woman in Iowa lost nearly $30,000 to a sweepstakes mail scam that was processed through PacNet. There are hundreds, if not thousands, of other victims as well.

What’s the government doing?

PacNet is based in downtown Vancouver and claims to be one of the industry’s leading payment processors. However, the U.S. Treasury Department characterized PacNet as a “significant transnational criminal organization” according to a September 22, 2016 news article by CBCNews.

PacNet’s attorney states that all of the mail fraud was going on “unbeknownst” to PacNet. An investigation is ongoing. PacNet has also been investigated by Australian authorities and has paid out settlements.

A growing problem

The elderly in the United States are scammed out of $36 billion a year according to a 2015 report by True Link Financial cited in a Huffington Post article. The same study found that scamming is not limited to an isolated incident. The seniors that lost $20 or more to scams “went on to lose an average of $2,000 a year to other scams over the next five years.”

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When your elderly family members need help: Is someone hurting Grandma?

If you grew up near your grandparents, you probably have very fond memories of spending time with them. But as they aged, they may have started experiencing health problems or cognitive issues. For example, Grandma may have some form of dementia that makes it impossible for her to take care of herself.

Grandpa may have had several strokes leaving him unable to communicate and struggling to manage finances. Often family member try to help in these situations, but just as frequently, they hire caretakers or financial advisors whom they then rely on to care for the elderly family members.

When someone you love is vulnerable

This may seem like a wise solution. And, certainly, in some circumstances it can be. But some startling statistics have been reported from the World Health Organization regarding elder abuse. Their research has shown that 16 percent of people over the age of 60 have experienced some type of age-related abuse. These kinds of abuse include:

 

  • Psychological: Including name-calling, restricting access to friends and family and destroying the person’s property.
  • Financial: This includes misuse of the elderly person’s funds, property or other assets.
  • Financial neglect: This can include failing to make housing payments, pay medical or utility bills, or provide the person with food or clothing.
  • Sexual and Physical abuse: This may include being hit or slapped by caregivers, or being fondled or touched inappropriately.

Is there help?

Fortunately, there is a growing area called Elder Law that helps combat such incidents. Parents and grandchildren of elderly family members can ask an attorney to address their concerns.

For example, an attorney can review financial documents, inspect nursing homes and ask for appropriate records and pursue legal action if evidence suggests there malfeasance is occurring.

This legal area can help family members be more assured of good quality care and appropriate fiscal management.

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Beware of IRS phone scams

When your phone rings, the last thing you expect is for the Internal Revenue Service (IRS) to be on the other end. They address themselves and automatically you tense up. Why would the IRS be calling you?

They’re claiming you owe them money and are insisting on immediate payment. They may have also alleged that certified letters were mailed and returned as undeliverable. But how could this be true? You’ve always paid your taxes and never once had an issue. Yet they are relentless with their payment demands and threatening jail time if you don’t comply.

What should you do?

Hang up the phone because you are being scammed. In June, the IRS issued a warning to taxpayers about a new phone scam linked to the Electronic Federal Tax Payment System (EFTPS).

How the scam works:

  1. Scammer poses as IRS representative, calls to inform you that you owe for unpaid taxes.
  2. Scammer threatens you with jail time unless immediate payment is submitted using a prepaid debit card.
  3. Scammer explains how the purchase of your prepaid card is linked directly to the EFTPS.

Important notes about the Electronic Federal Tax Payment System (EFTPS):

  • There is NO direct link from prepaid credit cards to the EFTPS
  • The EFTPS does NOT require you to purchase prepaid cards for submitting payment

Does the IRS actually call people?

Yes, there are special circumstances in which the IRS may contact you via telephone but it’s rare. Even then, their efforts to get in touch with you won’t begin with a phone call. Generally, the IRS will send several notices to you in the mail before attempting any other form of contact.

What red flags should you look out for?

Most taxpaying Americans have little or no knowledge of how the IRS operates. If you make the correct deductions and file/pay your taxes on time, there’s nothing that should warrant further communication. As a result, majority of people who become targeted by IRS scammers don’t realize always realize what’s happening. Avoid falling victim to this scam by learning to recognize the red flags listed below.

This IRS does not:

  • Ask you for credit card information over the phone
  • Demand instant payment without providing you the opportunity to appeal or question the amount owed
  • Threaten immediate arrest, license suspension or deportation for not paying
  • Accept payments in the form of gift cards or wire transfers

Where do you make payments if you do owe taxes?

If you do owe taxes, you will be directed to pay though the U.S. Department of Treasury.

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Talking with senior citizens about money concerns

There are scams everywhere, not just from self-appointed Nigerian princes with an email account. While the Nigerian Email Scam is well known, predators take advantage of the vulnerable through phone calls, mailings, emails, and in person. Approximately 10 percent of people over 65 are victims of elder abuse, and financial abuse is a leading issue. It’s a crime that has serious consequences on the physical and mental health of senior citizens in addition to their financial well-being.

The best defense against such scams is to plan ahead. By establishing financial trust with your family members, you can create as a line of defense before scammers get too close to aging and vulnerable loved ones. Like most of life’s important decisions, it begins with a heart-to-heart between family members.

Balancing talk and trust

Talking about financial matters can be uncomfortable, especially if it suggests decreased independence for an aging loved one. Nobody wants to have their capabilities questioned and the wrong tone can put people on the defensive. The Financial Industry Regulatory Authority has accumulated a list of seven tips to broach the subject without damaging trust.

FINRA’s tips:

  • Show your love.
  • Choose your words carefully.
  • Talk about yourself.
  • Offer to help.
  • Ask the right questions.
  • Beware of scams.
  • Consider professional guidance.

Breaking barriers and reversing roles

Conversations about money are just like any other meaningful talk. To have a conversation, both sides must have input. To build trust and tone, the concerned family members should include their own strategies, such as plans for emergencies, establishing a power of attorney, health care directives and insurance policies.

The challenge in discussing finances and decision-making with our elder family members is the role reversal and the interjection into personal affairs. For many, these are independent decisions that haven’t been discussed with the younger generation in the past. However, by breaking the barrier ahead of time, potentially vulnerable loved ones will be ready to talk when there’s threat of a scam.

Senior citizens are often victims of fraud. By establishing a trusting relationship with honest, feedback-focused discussions, you can help protect your loved ones from abuse. If you suspect your loved ones are being victimized, an attorney can help you identify warning signs, stop the abuse and to attempt to recover losses.

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What is the Elder Abuse Prevention and Prosecution Act?

The Elder Abuse Prevention and Prosecution Act (EAPPA) was signed into law in October 2017. It is meant to combat elder abuse, which something legislation has been slow to reform, and improve responses to allegations of abuse.

The Act, which is estimated to cost $21 million dollars, will help provide resources and data statistics to improve elder abuse policies.

Additional resources allocated

An ongoing problem with policing elder abuse is the lack of resources. The new law helps allocate federal resources to the problem. The Department of Justice (DOJ) will be assigning an assistant U.S. Attorney to serve as an Elder Justice Coordinator (EJC) in every federal judicial district. There are 94 federal judicial districts in the U.S. The EJC will assist with federal prosecution of elder abuse cases, including fraud and email scams, neglect and financial exploitation.

Data sharing best practices

Currently, there is no single system for reporting elder abuse. The DOJ will be developing a best practices process for collecting and distributing data on elder abuse. For example, if the federal judicial district in Florida found a new form of elder abuse targeting seniors via email, they could share that information in a database to alert other districts of the new form of abuse. In addition, the Department of Health and Human Services must also release data about cases they are investigating. Lastly, the Director of the Office for Victims of Crime will be responsible for providing Congress with statistics on elder abuse.

As seniors continue to live longer, the possibility for elder abuse will only increase. Family centered watchdog groups are happy the problem is being acknowledged but would like to see more progress. The new law is not perfect, but it is a start towards protecting elders from those who would target their vulnerabilities.

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Don’t allow elder financial abuse to happen

Financial exploitation of seniors is a growing problem as 1 in 20 seniors have reported financial exploitation. According to estimates, seniors lose over $36 billion each year to financial abuse and scams.

What are the signs of financial abuse?

Financial abuse can range from signing documents they don’t understand (or are not allowed to read) at their partner’s behest, to not being allowed to work or have control over their own money. Some signs to watch for:

  • Changes in bank accounts: Look for unusual withdrawals or if someone new has been added to the account.
  • Unpaid bills: When you see bills piling up, that could be a sign the money is going elsewhere.
  • A new gatekeeperIf the caregiver denies you access to the senior, something may be amiss.
  • Change in the person: If their demeanor has changed, and he or she is acting afraid or looking unkempt, something is wrong.
  • Financial confusion: If they’re confused about recent transactions, you may want to investigate further.

Financial abuse prevention

Prevent the financial abuse of seniors by involving a professional to make sure your loved one gets the best advice. This is a great way to start. Other suggestions include:

  • Talk finances: Have family, an attorney or a financial planner talk finances with your senior.
  • Stranger danger: Don’t talk with strangers about finances.
  • Checks and credit cards are better than cash: Leaving a paper trail can be helpful later.
  • Get a second opinion. Talk to a professional if someone wants to get a power of attorney, or is asking for financial information.

What to do if you suspect elder financial abuse

Contact an attorney experienced in financial elder abuse cases immediately. The California Constitution’s Victim’s Bill of Rights says that anyone who suffers losses as a result of criminal activity has the right to get restitution from the persons convicted.