Fast Facts: Financial Abuse of the Elderly

The Financial Services Roundtable recently released another iteration of its Fast Facts, reliable, bullet-point research about issues facing the financial services industry. Topics span TARP, Dodd-Frank, insurance, lending, retirement savings and more. 

The elderly are frequent victims of financial abuse, exploitation that often goes unreported. The financial services industry has programs in place to prevent this abuse from occurring and to support victims of financial exploitation.

FACT: June 15 is World Elder Abuse Awareness Day (WEAAD).

FACT: On June 15, 2006, the International Network for Prevention of Elder Abuse and the World Health Organization introduced WEAAD to give an opportunity for people around the globe to educate others on the high level of abuse and neglect of older persons. Every year on or around June 15th, communities and neighborhoods plan activities to raise awareness of the social and financial abuses elderly people currently face.

FACT: In 2010, elderly victims lost at least $2.9 billion to financial exploitation, a 12% increase from 2008, according to a 2011 MetLife study of Elder Financial Abuse.  Today, although people ages 60 and older make up 15% of the population, they account for 30% of investment fraud victims.  According to NAPSA, 90% of abusers are friends and family members.

FACT: The elderly are a target for financial abuse because they may be more likely to depend on others for help, have predictable patterns, usually have less understanding of modern financial management, and have accumulated financial savings. Persons over the age of 50 control over 75% of the nation’s consumer financial assets (about $16 trillion), according to the SEC in 2006. In 2009, the net worth of households 65 and older was about $18 trillion.

FACT: Men and women of any race, economic level, or health status can become victims of elder financial abuse.

  • Women are twice as likely as men to become victims.
  • Most victims are between the ages of 80 and 89.
  • AARP found the average age of investment fraud victims to be 69.
  • Most victims live alone and require help with health issues and home maintenance.

FACT: Signs of elderly financial exploitation include unpaid bills, changes in banks or attorneys, unusual transactions or changes to accounts, changes in spending patterns, new individuals accompanying the customer to a bank, unfamiliar signatures, missing property, and a lack of personal amenities. FACT: Financial institutions are often the first line of defense against financial elder abuse.

  • Financial institutions use sophisticated technology, modeling, and training to be on the forefront of fraud detection.
  • Many financial institutions have extensive programs to educate employees and customers on detecting abuse and steps to secure accounts from the lure of fraudsters.
  • Financial institutions work with law enforcement and community organizations to prosecute and prevent elderly fraud abuse. The 2010 Elder Justice Act authorizes $777 million to establish a more ample response to fighting elder abuse.

FACT: Ways senior citizens can protect against financial abuse: establish a budget, determine appropriate products for you, plan your estate, prepare for unexpected expenses, choose someone you trust when providing Power of Attorney, respond cautiously to internet, mail, or phone inquiries, contact your bank if you suspect anything, protect passwords and account numbers, look out for scams, keep details of deals in writing, frequently check your credit report, and don’t be afraid to ask for help. FACT: You can contribute to World Elder Abuse Awareness Day by visiting “Join Us in the Fight Against Elder Abuse.” You can view all previous Fast Facts at www.RoundtableResearch.org. Copyright © 2013 The Financial Services Roundtable, All rights reserved.

Written by Banking.com Staff