Protecting Seniors From Financial Abuse and Scams

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1 Protecting Seniors From Financial Abuse and Scams National Home and Community Based Services Cindy Hounsell, J.D. WISER

2 One-stop gateway to provide basic financial information and resources Focus is on retirement readiness, health and longterm planning Providing better choices in financial decisionmaking, health care and long-term care Website is 9/19/2011 2

3 Unlike muggers and thieves, investment fraud artists don t take your money against your will; they persuade you to hand it over willingly. Office of the Maryland, Attorney General. 9/19/2011 3

4 Perpetrators may obtain money or possessions by threat or deceit: misuse of credit cards, joint bank accounts, check cashing without authorization, theft of pension or benefit check, transfer of assets, and Identity theft. 9/19/2011 4

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6 Telemarketing Scams Fast-talking telemarketers promise gifts if you sign-up right now for products or services. The Pigeon Drop The con artist tells the older person that he has found a large sum of money and is willing to split it. However, the person will first have to make a good faith payment by withdrawing funds from her bank account. Often a second con artist is involved, posing as a lawyer, banker, or some other trustworthy stranger. 9/19/2011 6

7 The Fake Accident Ploy The con artist gets the victim to wire/send money on the pretext that the person s child or another relative is in the hospital and needs the money Lottery/Sweepstakes Scam Receive notifications that you have won large amounts of money in a foreign lottery. The catch is that the winner is asked to wire money for fees and taxes. Scammers may also send counterfeit cashier s checks to make the scam more believable. 9/19/2011 7

8 Work-at-Home Scams Job advertisements promise that individuals can make lots of money working from the comfort of their own homes. Common jobs offered are: Data Entry, Stuffing Envelopes, Starting an online business and Posting ads. However, individuals are required to pay up front for training, equipment, or kits. Jury Scams You receive a telephone call claiming that you missed jury duty. The con artist then asks for your Social Security number in order to confirm the court s information. 9/19/2011 8

9 Home Renovation & Home Equity Scams Con artists go door-to-door selling home improvement services and often lie about the need for work and/or cost of materials and labor. Sometimes they start work without permission. They often demand large payments up-front Individuals may also be talked into taking out an expensive sub-prime home equity loan. With high interest rates and hidden charges, these loans are designed to fail, and the lender receives the equity in the person s home Reverse Mortgage Scams Designed to steal the equity from the property of unsuspecting victims Scammers convince the targeted individual to use money from a reverse mortgage to buy another financial product (for example, annuities) 9/19/2011 9

10 Identity theft occurs when an individual uses someone else s personally identifying information (like a Social Security number, credit card number, or driver s license number) to pose as that person. Will often use this information to gain access to a existing accounts, open new accounts (credit card or a new checking account), apply for loans or mortgages, and/or engage in other fraudulent activity. Last big study showed 9 million cases a year. (2007) 9/19/

11 Shoulder surfing Thieves watch from a nearby location as the targeted individual fills out forms, uses their PIN at an ATM, or listens in on a conversation where individual is giving out a credit card number over the telephone to a hotel or rental car company. Dumpster diving Going through garbage cans to obtain copies of people s checks, credit card or bank statements, or other records. Preapproved credit cards Retrieve the discarded materials from preapproved credit cards and try to activate the cards. Phishing scams s that appear to be from a legitimate company or institution (like the IRS), asking you to update or verify your personal information. 9/19/

12 Invest in a paper shredder Monitor your bank and credit card statements Do not fall for phishing scams When in doubt, contact the institution the claims to come from, or research the potential scam online Beware of telephone scams Never give out personal information over the phone to someone who initiates the contact with you. Be careful with your mail Do not to let incoming mail sit in your mailbox for a long time. When sending out sensitive mail, consider dropping it off at a secure collection box or directly at the post office. 9/19/

13 Contact your bank(s) and credit card companies immediately. File a report with the police. The police may not be able to do very much themselves, but companies you work with to clear up identity theft issues may want to see a copy of this report. File either where the theft took place or with your local police. You can also file with the Federal Trade Commission by using their online complaint form at or call their theft hotline at ID-Theft. Put out a fraud alert to the credit-reporting agencies (Experian, Equifax, and Transunion) have to decide whether to extend the initial for 90 days to the extended seven years. 9/19/

14 Fast-talking telemarketers promise gifts, money, and other good things if you sign up right away. How do they do it: *Unsolicited offers from anyone but especially made over the phone: * Companies who pressure with an offer that will expire or must be agreed on now. * Asking for credit card number, bank account or important personal information over the phone. * Ask them to send something in writing to a trusted advisor. 9/19/

15 For clients, Older Parent or Friend: Discuss scams and make a plan. When there s a firm plan or a script, the older person will be more likely to resist a persuasive caller or door-to-door sales person. Advise the person to hang up if the caller is persistent. Or provide a short script. Make a sign to put by the person's phone or front door that says, Say No Thanks! 9/19/

16 Financial planners and advisors can be very helpful. Be sure the person selling you a financial product or providing advice has credentials and you have asked for referrals. Do some looking and checking before you trust someone with your hard-earned money. 9/19/

17 There is no such certification as a Senior Certified Financial Planner. Don t get taken in. Only take advice from someone who has your interest in mind. There are various types of certification given to people who study and pass tests on investing and demonstrate a certain expertise. Two of those are: Certified Financial Planner (CFP) Chartered Financial Analyst (CFA) 9/19/

18 Unscrupulous individuals and companies go doorto-door selling home improvement services house painting, new roof, gutter cleaning. They may demand large sums of money and do shoddy or incomplete work. Home improvement scams can be packaged with a loan that has high interest rates and hidden charges. They are designed to fail and give the lender equity in the person s home. 9/19/

19 Strangers preying on older people who may be isolated, lonely, confused or desperate for attention. Family members to whom the older person feels an obligation. Caregivers (may or may not be family) who use fear or a sense of obligation to the person they are caring for to take advantage. 9/19/

20 Clients becoming close to an inappropriate person. A caregiver who becomes overly interested in finances. Client gives implausible answers about financial situation. 9/19/

21 Abrupt changes in lifestyle Unusual or unnecessary purchases Lack of food Unnecessary home repairs Inability to pay bills or bounced checks Sudden withdrawal of money from accounts a large amount, or numerous small withdrawals 9/19/

22 Reverse mortgage allow homeowners to borrow against the value of their homes. You receive a loan and the equity in your home decreases. You never have to repay a reverse mortgage as long as you live in your home. Loan is based on your age and value of your home. 9/19/

23 Using money from a reverse mortgage to buy another financial product. Buying an annuity with proceeds of reverse mortgages is a new bad trend. Financial Advisors who have no training are preying on elderly at senior centers around the country. 9/19/

24 1. Call your local bank representative immediately. Cancel any credit cards linked to the account and reset your personal identification number. 2. For local legal services, contact your local Eldercare office and tell them about the problem. For an office near you, call toll free weekdays 9:00 AM to 8:00PM. 3. Sign up for the National Do Not Call Registry by going to to prevent telemarketers from calling a client or senior. 9/19/

25 Coalition to End Elder Financial Abuse Founding Partners: AAIA American Association for International Aging CANHR Advocates for Nursing Home Reform NAPSA National Adult Protective Services Association WISER Women s Institute for a Secure Retirement 9/19/

26 Go To WISER s Web Site: 9/19/

27 Protecting Seniors from Financial Abuse and Scams National Home and Community Based Services Conference September 13, 2011 Kathleen M Quinn Executive Director National Adult Protective Services Association

28 The risk of financial exploitation in old age is real and substantial The most careful and frugal planner can lose their life s savings literally overnight to fraud. Changes in the aging brain may make older persons more vulnerable to poor financial decisions, decreasing their ability to detect risky or even foolhardy propositions 2

29 At least 7.6% of persons 60+ experienced abuse within past twelve months (Lachs et al) (same prevalence rate as coronary heart disease) Elder abuse victims are at least 3X more likely to die (Lachs) Victims are 4X more likely to enter a nursing home (Lachs) 9% of financial abuse victims go on Medicaid as a direct result (Utah SUA study) 3

30 For every elder abuse case reported to any agency, 23.5 cases go unreported (Lachs) For every case of financial exploitation reported, 44 go unreported 97% of older persons live in their own homes, not in facilities The vast majority of elder abuse is committed by the seniors family members in their own homes

31 Seniors interviewed through random phone surveys report financial abuse occurs more frequently than any other type of elder abuse Financial abuse is often the motivation for other physical and emotional abuse and neglect The number of financial exploitation cases is skyrocketing

32 Older persons, baby boomers and their families need to be educated about the risk of elder abuse Reducing isolation is the most important preventive step Steps can be taken to prevent exploitation, by limiting the powers granted to a Power of Attorney agent and by requiring regular accounting

33 Older persons should be screened for and asked about elder abuse, neglect and exploitation (similar to DV health screenings) 1/3 of persons 71 & older have mild cognitive impairment, greatly increasing their risk of financial abuse in particular Clinicians Pocket guide is a good basic screening checklist:

34 All but four states mandate the reporting of suspected elder and vulnerable adult abuse to Adult Protective Services (APS) Professionals who regularly interact with older people should be trained to recognize indicators of abuse, neglect (including selfneglect) and exploitation and to know how and where to report their suspicions

35 Purpose: To investigate reports of abuse, neglect, selfneglect and exploitation of adults with disabilities age 18+ (42 states at minimum) To intervene to protect the victim to extent possible Authorization: APS is the statutorily authorized entity under each state s laws to receive and investigation reports of elder abuse 9

36 APS professionals are the first responders to elder abuse & abuse of younger adults with severe disabilities APS = the boots on the ground in the fight against elder and vulnerable adult abuse APS reports ever increasing and ever more complex cases of financial abuse

37 APS can differ from state to state & county to county: Definitions Client eligibility: age; disability; residence Mandated reporting 11 states require financial institutions to report abuse to APS Resources APS budgets are being slashed in virtually every state while the client population soars There is no designated federal funding for APS yet EJA authorizes it

38 Elder abuse requires a multi-disciplinary approach in order to address it in all its complexities Increasingly APS and the Aging Network participate on multi-disciplinary teams with other partners, including law enforcement, prosecutors, guardianship, code enforcement, banks, healthcare providers, etc. 12

39 Make seniors and seniors-to-be aware of risk Emphasize the importance of staying connected to others isolation is a major risk Consider carefully your Power of Attorney: Who you name as your agent Always name a successor agent Consider requiring regular accounting by agent Provide financial institutions and trusted others with copies Regularly update Consider convenience (not joint) accounts

40 The only national organization representing adult protective services and clients members from every state An annual conference New York in 2011 a newsletter, webinars, training library, policy and advocacy work, research, and more. 14

41 Recognize it Report it Respond to it with your professional expertise Work with APS & others to raise awareness & to address

42 THANK YOU!