The current issue of Consumer Reports paints a grim picture of seniors victimized not just by scam artists, but also by trusted family members, caregivers, and friends. Financial exploitation of seniors – illegally or improperly using the funds, property, or assets of people age 60 and older—is a crime that often goes unreported. In a randomized New York telephone survey released in 2011, for instance, seniors mentioned being victims of financial exploitation more frequently than any other type of abuse. Yet the study found that only 1 in 44 cases were officially documented. A national study issued by the MetLife Mature Market Institute estimates that this abuse costs at least $2.9 billion a year.
Studies of investment abuses tell similar stories. In a survey last year of about 2,600 financial planners by the Certified Financial Planner (CFP) Board of Standards, 56% said they knew older clients who had been subject to unfair, deceptive, or abusive practices. Among reported cases, the average loss estimate was $140,500; the median was $50,000. Only a quarter of surveyed CFPs said the crimes’ perpetrators rarely or never knew the victim.
With little federal coordination or funding, some states have taken the initiative to identify and deal with suspected victims by improving information-sharing among adult protective service workers, emergency medical personnel, and police officers. California has established courts dedicated to handling the growing number of elder abuse cases. And in 25 states, financial institutions are required to report suspicious withdrawals from seniors’ accounts and other uncharacteristic activity.
Financial exploitation indirectly costs victims, families, financial institutions, and taxpayers. A 2012 study by Utah’s elderly services unit found that in 2010 older financial-abuse victims who enrolled in Medicaid had lost an average of $480,000. The study’s authors projected that such victims could cost the program almost $9 million.
