Securing a Financial Safety Net for Caregivers is a periodic blog on Your Turn To Care in partnership with the Women's Institute for a Secure Retirement (WISER.) It features tips and resources that provide essential financial planning advice and assistance for caregivers and their loved ones.
Protecting Your Senior Family Members From Financial Abuse
Everyone is subject to fraudulent scams and con games. Women and men of any race, economic level, geographical area, and health status can be a victim of elder financial abuse or exploitation -- although women are more than twice as likely to be victimized. It's important for seniors and their caregivers to be aware of the frauds and scams that threaten their financial security. The individual trying to take advantage of your elder family member may be a stranger (51%) or someone you trust --another family member, friend, or neighbor (34%.) It can also be a business (12%) or Medicare/Medicaid billing fraud (4%).
According to a MetLife study from 2011, financial abuse has robbed elder Americans of an estimated $2.9 billion last year, up 12 percent from 2008. The reason for the growth in numbers is unclear, but may be due to higher reporting, higher incidence, possibly caused by the increase in the senior population, as well as the struggling economy. Regardless, new research indicates that the instances of elder financial abuse are far higher than previously reported.
Caregivers and older adults, need to be aware of precautions, behaviors, and actions that can help protect against becoming a victim of financial abuse or exploitation at the hands of others.
Indicators of Financial Abuse
Elder financial abuse takes many forms. Friends, family and others should be alert to:
- Abrupt changes in the elderly person's lifestyle (for example, an unexplained inability to pay her bills);
- Great disparities between the amount of money and assets the elderly person has and her living conditions;
- Sudden withdrawals of large sums of money from accounts;
- New acquaintances who promise to provide care, or who give implausible answers about the elderly person's financial situation;
- Family or friends who pay extraordinary interest in the older person's assets or belongings.
Types of Financial Exploitation
- Misuse of credit cards, ATM cards or joint bank accounts.
- Mismanagement of income/assets.
- Cashing checks without authorization.
- Abuse of Durable Power of Attorney.
- Appropriation or theft of benefit or pension checks.
- Transfer of assets under duress.
- Obtaining money or possessions by threat, force, deceit or trickery.
- "Loan checks" sent by Credit Card Company that are stolen and forged by others Always tear them up if you don't plan to use them. They are also treated as cash and carry a higher rate of interest than a charged item.
SCAMS & FRAUDS
Telemarketing scams and mail fraud
- Fast-talking telemarketers and perpetrators of mail fraud often promise gifts if you sign-up right away for products or services.
- Check out all unsolicited offers.
- Do not agree to buy anything or to send in money over the telephone.
- If it sounds too good to be true, it probably is!
Theft of wallet or credit card
- Protect your Social Security, bank and credit card numbers.
- Tear up all receipts with your credit card number before throwing away.
- Don't bring too much cash or all your credit cards when you go shopping.
- Hold your bag securely under your arm.
"The Pigeon Drop"
- The con artist claims to be willing to split found money with a person if he/she will make a "good faith" payment by withdrawing funds from bank account.
"The Fake Accident Ploy"
- The con artist gets the elderly person to withdraw money on the pretext that the elder's child or another relative is in the hospital and needs the money.
Medicare/Medicaid Fraud and Abuse
- Check your Medicare Summary Notice (MSN) to see that all billed services were, in fact, provided.
- Call Medicare contractor's phone number on the bottom of the notice or contact the State Health Information Assistance Program in your state if you have a question about the services listed on your notice. (Check the Medicare Handbook for phone number listed under "SHIP" program.)
- Also check MSN to see if the provider is billing for exactly what was provided, not for a more complicated or more expensive service.
PREVENTION & INTERVENTION
- Direct Deposit of benefit checks will prevent checks from being stolen from the mailbox.
- Paying by check is always safer because the payment can be traced.
- Never turn cash over to anyone.
- Check monthly statements and bills for accuracy.
- Keep important papers and legal documents in a secure location and review on an annual basis to make sure they reflect your current needs/situation.
- Be cautious when dealing with anyone in-person, by mail, the internet or telephone. Resist pressure to make immediate financial decisions. Seek financial consultation with trusted financial advisor or family member.
- Protect your passwords.
- If you feel someone (friend, family or stranger) is trying to intimidate you or isolate you from your family and friends contact your family or the local police immediately.
Web Resources for More Information:
A WISER Checklist: How can I tell if someone is being financially abused?
National Center on Elder Abuse
The National Committee for the Prevention of Elder Abuse (NCPEA)
The National Center for the Victims of Crime
The National Consumers League's Fraud Center
The National Consumer Law Center
Elder Financial Protection Network
Eldercare Locator (Elder Financial Abuse)