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Financial Scams and Exploitation
What does elder financial exploitation look like?
We take elder financial exploitation very seriously here at CB&T. As Baby Boomers continue to retire and advance in age, an increasing number of American seniors are at risk of falling victims to schemes aimed at separating them from their money.
The risks are substantial. A 2014 survey claims that 36.9% of seniors lose money to scams, financial exploitation, and abuse over any given five-year period. While it's hard to qualify, a 2016 survey estimated the average loss to victims is $36,000 - which is considered a "major financial loss" or "financial ruin" by nearly half of caregiver respondents. Those respondents also reported that 40% of seniors in their care experienced financial exploitation more than once, up from 20%. Such losses often are not reported when discovered and they are rarely recovered.
In many cases, there are warning signs, and caregivers and close family members are often in the best position to spot possible financial exploitation.
Beware of these common red flags
Listen for tipoffs
Take note if an elderly friend of family member says something like:
- "People are asking me for money."
- "My money seems to be disappearing."
- "How do I make loans to a friend?"
- "Should I change my will?"
Watch for cues
Pay attention to behavioral changes or situations such as:
- Unusual or unexplained withdrawals, transfers, debits, or changes in financial habits
- Abrupt or unexplained changes to wills, trusts, powers of attorney or beneficiaries
- New friends or sweethearts, or withdrawal from existing relationships
- Fearful or confused behavior about finances
- Persons who insist on participating in all financially related conversations
What to do next
Here's what you can do if you spot any of these red flags:
- Act Quickly. The sooner you take steps to halt losses and recoup lost funds - which can include notifying law enforcement, Adult Protective Services, and the Federal Trade Commission to report scams - the greater your likelihood of success.
- Have a calm conversation and don't blame the victim. Your loved one may become more secretive and make a bad situation worse if they feel cornered or embarrassed.
- Contact your loved one's financial institution. You can institute safeguards to help prevent unauthorized transactions, such as stepping in as co-signer or establishing power of attorney. In most cases, it is wise to secure the counsel of a good lawyer that you know.
An ounce of prevention
These are several ways you can help seniors avoid financial exploitation:
- Help your loved on get organized, including locating and filing key financial records
- Ensure that you and your loved on designate Trusted Contact Persons for your accounts, so trustworthy people can speak to financial institution representatives in the event of suspected financial exploitation. Talk to the loved one regularly.
- Regularly review wills, trust, and bank accounts
- Discuss your loved one's goal and attitude toward money so that you're attuned to any irregular spending
- Talk about how to spot and respond to potential scams
- Don't put off important conversations out of concern that they might become uncomfortable
By staying attentive to your loved ones as they age, you can help them to spot potential scams, minimize financial losses, and focus on what really matters: a happy and fulfilling life in retirement.
CB&T bankers and Trust Officers are here to help. Contact us today at 753-1521.