AARPColumnists

Legal-Ease: An Attorney’s Perspective: Don’t Be a Victim of Elder Financial Abuse

By November 22, 2019 December 17th, 2019 No Comments

Judd Matsunaga, Esq.

In 2017, financial institutions filed 63,500 suspicious activity reports tied to the exploitation of older adults, quadruple the amount reported four years earlier, according to the Consumer Financial Protection Bureau (CFPB), for a total of $1.7 billion in attempted thefts and losses. (Source: Bloomberg.com, “‘Trusted’ Professionals Target the Assets of America’s Elderly,” Oct. 21, 2019.)

That estimate, however, is a tiny fraction of the real total. The vast majority of such attempts to separate the elderly from their money, both legal and illegal, go unreported. The reports “may account for less than 2 percent” of actual incidents, the CFPB says. Estimates of total losses ranged as high as $36.5 billion, according to one financial services firm.

“One in 5 older Americans is a victim of financial exploitation,” said Jilenne Gunther, who heads the BankSafe initiative at AARP’s Public Policy Institute, costing U.S. financial institutions $1 billion in deposits annually. Increasingly, it’s the professionals – the financial advisers, insurers and lawyers that the elderly trust – who are the wolves in sheep’s clothing.

At the Iowa attorney general’s consumer protection division, complaints about professionals manipulating elderly clients pour in “nonstop,” said Chantelle Smith, an assistant attorney general in Des Moines. They involve “any type of business you can imagine.” Smith pursued financial advisers, securities brokers and insurance agents for exploiting older people about two decades ago.

Financial predators aren’t being prosecuted “in any significant number, relative to how many cases there are,” she explained. And with lawsuits, “most of them don’t go to court.” Meanwhile, perpetrators seek out and spend time with older people who are isolated and lonely.

They know many of their targets won’t report what’s happening fearing embarrassment or of having their children take control of their finances.

“They target, they stalk,” Smith said. “I tell all the older people I talk to: ‘You have a bull’s-eye on your back.’”

Smith said the only way to stem the rising tide of elder financial exploitation is to get family members, friends and community volunteers more involved in their lives.

Shawna Reeves, director of elder abuse prevention at the Institute on Aging in San Francisco, says few understand that such activity can involve professional firms and companies, including banks, financial advisers, insurers and law firms.

“This is big business, perpetrated by actors people think are legitimate,” Reeves said.

According to social workers, prosecutors and other officials across the country, common stratagems involve attempts to sell the elderly ill-advised annuities and reverse mortgages, as well as solar panel installations and access to veterans’ benefits.

Elderly people who fall victim to financial wrongdoing are more likely to die prematurely, research shows. Losing one’s life savings, worrying about maintaining control over assets that remain or simply being embarrassed at having been taken advantage of all play a part, Smith said.

“Where do you go after you’ve been exploited by a professional you thought you could trust, and you are now at perhaps your most vulnerable state? Another ‘trusted’ professional?” Smith asked. “They die. It kills them.”

The California Department of Justice puts out a consumer pamphlet titled, “Financial Exploitation, Elder/Dependent Adult Abuse.” The pamphlet lists examples of Elder Financial Abuse:

  • Cashing checks without authorization/permission
  • Forging an elder’s signature
  • Misusing or stealing an elder’s money or possessions
  • Coercing or deceiving an elder into signing documents such as a contract or will
  • Don’t sign blank checks allowing another person to fill in the amount.
  • Don’t give strangers access to your bank accounts.
  • Check your financial statements frequently and carefully for unauthorized withdrawals.
  • Don’t be pressured by family members, friends, caregivers or anyone to do anything you don’t want to do.
  • Don’t leave money or valuables in plain view.
  • Be aware of scams (either by phone, email or regular mail). If it sounds too good to be true, it probably is.

The pamphlet lists the following instructions — How to Protect Yourself From Financial Elder Abuse:

  • Don’t sign blank checks allowing another person to fill in the amount.
  • Don’t give strangers access to your bank accounts.
  • Check your financial statements frequently and carefully for unauthorized withdrawals.
  • Don’t be pressured by family members, friends, caregivers or anyone to do anything you don’t want to do.
  • Don’t leave money or valuables in plain view.
  • Be aware of scams (either by phone, email or regular mail). If it sounds too good to be true, it probably is.

Finally, the pamphlet says to NEVER give out your personal information to anyone on a telephone or email pitch, hang up the phone and call a family member/friend to help determine the validity of the calls.

If you suspect a person who is elderly is being financially exploited, call the Bureau of Medi-Cal Fraud and Elder Abuse at (800) 722-0442.

Judd Matsunaga is the founding attorney of Elder Law Services of California, a law firm that specializes in Medi-Cal Planning, Estate Planning and Probate. He can be contacted at (310) 348-2995 or judd@elderlawcalifornia.com. The opinions expressed in this article are the author’s own and do not necessarily reflect the view of the Pacific Citizen or JACL. The information presented does not constitute legal or tax advice and should not be treated as such.