Cases related in elder financial exploitation in the United States are in the rise. Seniors are more prone to financial exploitation than any other population. In fact, Suspicious Activity Reports (SARS) shows that between 2013 and 207, more than 63,000 reports were filed. Unfortunately, it is believed this may be a small fraction of the number of violations that occurred.
Defining Financial Abuse and Exploitation
Most of us never think about how vulnerable our loved ones are to financial exploitation.
Financial exploitation is defined in the Older Americans Act (1965) as: “The fraudulent or otherwise illegal, unauthorized, or improper act or process of an individual, including a caregiver or fiduciary, that uses the resources of an older individual for monetary or personal benefit, profit, or gain, or that results in depriving an older individual of rightful access to, or use of, benefits, resources, belongings, or assets.”
Family members should be aware that their loved one could be scammed by another family member, a caregiver, or by a run-of-the mill con artist. Even seniors who are in assisted living facilities or nursing homes can be financially abused.
Discover improved financial services and higher yield savings.
Access flexible job opportunities to earn extra income, cash rewards and save money with offers in essentials like healthcare or tax advice.
Chime is a financial technology company, not a bank, offering digital banking services through a convenient mobile app.
Trends in Submissions
The average amount of money seniors lost due to financial exploitation was slightly more than $34,000. To make this even worse, a report issued by the Consumer Financial Protection Bureau (CFPB) stated that in seven percent of cases, the amount of loss exceeded $100,000.
There are other disturbing trends which were reported, including the following:
- Seniors who were older than 80 represented one third of all losses
- On average, a victim between the ages of 70 and 79 lost more than $45,000
- Banks and other financial institutions reported more than $1 billion dollars in suspicious activities. Unfortunately, actual losses did occur with the average loss being $16,700
When a senior was familiar with the person defrauding them, the losses were much greater. Average losses when the person was not known to the victim were in the range of $17,000 but, when the victim new the perpetrator, the losses averaged $50,000.
Trends in Types of Fraud Perpetrated on Seniors
During 2016, money service businesses (MBS) reports made up nearly 60 percent of all SARs. This is in stark contrast to the 15 percent which occurred in 2013. An MSB is defined as someone who deals in currency, cashes checks, or issues travelers checks. MSBs exclude banks, stockbrokers and other similar financial institutions.
This does not mean seniors were not victims of fraud when it comes to financial institutions. In fact, during 2017, a total of $1.7 billion in suspicious activity was reported — in most cases, these were attempts to steal funds from seniors.
Discover improved financial services and higher yield savings.
Access flexible job opportunities to earn extra income, cash rewards and save money with offers in essentials like healthcare or tax advice.
Chime is a financial technology company, not a bank, offering digital banking services through a convenient mobile app.
Disturbing Elder Financial Exploitation Trends
Unfortunately, one of the most disturbing trends is that nearly 80 percent of these reports involved an actual monetary loss. In some cases, the losses were to a senior while in other instances they were to a financial institution.
Financial exploitation by strangers accounted for nearly 70 percent of all SARs. However, what is more disturbing is many of these issues go largely unreported to law enforcement or to elder abuse networks where seniors could seek justice. Sadly, since so much exploitation is a result of someone the victim knows, we are less likely to see this change anytime soon.
Money transfers through checking accounts and savings accounts resulted in 44 percent of all SARs which involved any type of money transfer. These accounts also had the highest actual reported losses to seniors.
It is also noteworthy that these SARs typically are not a result of a one-time incident. In fact, most records show that the fraud is being perpetrated over a period of months. In most cases, the reports show a history of suspicious activity over a four-month period before it was noticed.
Families Can Help Identify Financial Exploitation
While you may think there is no way to prevent your loved one from being taken advantage of, there are some clear signs which may help you identify financial exploitation. Some of these include:
- Change in their mood or appearance — oftentimes a senior who is being financially exploited is frightened. This can result in depression because they do not know who they can turn to or who they can trust.
- Suddenly appears to be using ATMs — when your loved one’s use of an ATM starts increasing, you should be aware of how they are spending their funds. In some cases, they are withdrawing money to “give” to someone who is taking advantage of them.
- Sudden new relationships — if you learn your loved one has a new best friend, a new love interest and they seem to be spending more money than usual, it may make sense to pry a bit into what is occurring. You may find they are “helping” their new friend with a sick family member, an unexpected financial crisis, etc. This is often a sign that they are being scammed.
You can read more about the Suspicious Activity Report Trends related to elder financial exploitation in the publication put out by the Consumer Financial Protection Bureau, or by reviewing online data which is available from the Financial Crimes Protection Network.
