Telemarketers, online scammers, even family members steal from the elderly. And most of it goes unreported.
A recent study on elder fraud finds the crime may be far more rampant than authorities assumed.
Internet security company Comparitech explored a topic that so often goes untouched by research companies: Financial abuse crimes against the elderly.
An estimated 5 million cases of elder fraud occur in the U.S. every year. But only 200,000 get reported to the authorities. The study also suggests a collective $27.4 billion is stolen every year to this type of fraud – far more than the $1.17 billion authorities know of.
Elder fraud is a growing concern
Just this March, the Federal Bureau of Investigation announced a crackdown on perpetrators of elder fraud. More than 260 defendants named. They allegedly targeted more than 2 million Americans, most of whom were seniors.
In 2014, the FTC shut down a telemarketing company that stole millions of dollars from seniors by pretending to work for Medicare. In this case, the defendants told senior citizens that they would receive a new Medicare card or Medicare benefit information. But first, they claimed they needed to verify consumer identities using personal information, including bank account numbers.
Seniors were assured that their private information would not be used to charge any money to the accounts. However, a few weeks later consumers learned that their accounts had, in fact, been charged. Amounts of $399 or $448 were stolen via remotely created checks. None of the victims ever received any product or service from the company.
Why scams involving the elderly are all too common
The FBI cites the following reasons:
- Senior citizens are more likely to own their own home and have savings stored for retirement.
- They generally have better credit than other demographics.
- Seniors tend to be easier targets for products like health services that will increase longevity, and they are also targeted frequently by Medicare scammers.
- They are less likely to report being the target of a scam, for fear of being embarrassed or humiliated by family members.
- Con artists know that aging individuals can have trouble remembering certain information. They also know that it can take weeks or months for an elderly person to find out that they have been swindled.
- In scams involving telemarketing, email, or other electronic forms, seniors are less likely to know where to report the fraudulent activity.
Talking about money with your parents can be a touchy subject, which is why seven out of ten people say they have trouble communicating with an aging relative. But scams like this one serve to highlight the importance of talking seriously about money with your elderly relatives.
Don’t wait to talk finance with your aging parents
Here are five things you should be doing with your parents now to ensure they’re set up properly. These steps can help your parents avoid scams because they’ll already be on top of things like Medicare and managing their financial outlook effectively.
If you wait, there’s a chance that a real emergency could happen, such as a parent getting Alzheimer’s or suffering from an illness that requires round-the-clock care. It’s best to talk about money now before anything serious happens.
Be willing to discuss hard legal topics
What do your parents plan to leave behind? You should ask them about:
- Their will
- If they have an attorney
- If you have the right to speak to the attorney
- Other questions that would be difficult to answer if they aren’t around anymore
Ask them honestly about their income and expenses
If they have outstanding debt or have depleted their savings, these are important things you should know. Remember that a balanced budget is essential during retirement since most people live on a limited fixed income. When money gets tight, people are more vulnerable to scams and fraud because they’re looking for any solution that will get them out of the situation they’re in.
Make sure that you or a sibling has access to financial records
This is doubly important in case your parents ever do fall victim to a scam. If you have bank account information, tax records, and online banking access, it will be easier for you to help them figure out if something goes wrong.
Warn them of the scams that exist to purposefully rip off the elderly
The best defense is a good offense. Talk to your parents about protecting their accounts, changing their passwords, and the importance of checking out an offer before accepting it or giving away information.
For more tips, visit Consolidated Credit’s full section on Talking to Your Aging Parents about Money.