Some three-fourths said they feel broker-dealers and investment advisors can do more to detect and prevent senior fraud.
“Financial advisors are in a unique position to assist,” Borg said. “By being able to flag the signs of financial exploitation that targets vulnerable seniors and implementing policies and procedures for the aging, brokers and advisors can be more aware when exploitation is occurring and contact authorities.”
Guardianship abuse like the case described by Hodges is one of several emerging schemes. Another is investment fraud through religious organizations.
For example, in Birmingham, Ala., a gentleman offered free tax work to a church whose members were largely 60 years and older.
“After he gained the trust of the congregation, he sold them shares in a fraudulent pyramid, Ponzi scheme by claiming that a portion of returns would be returned to the church,” said Borg. “He instilled fear that Social Security would be cut off and health-care costs would be too expensive for them without buying into his guaranteed and secure investment plan.”
In Gulf Coast states like Alabama, Florida, Louisiana, Mississippi and Texas, there’s often a rise in real estate scams after a hurricane or storm hits, such as Harvey or Katrina.
“Seniors in coastal and retirement areas have a particular affinity for land because it’s tangible, so when a fraudulent promoter comes along claiming he’s got damaged buildings available at rock-bottom prices that can be rehabbed, they often fall for it,” said Borg.
Too often after the retiree has invested $5,000, $10,000, or their entire savings or retirement account, it’s revealed that 46 others are on that mortgage list, which renders it worthless or in many cases the mortgage doesn’t even exist.
“With Harvey, we’re going to see that type of scam in Texas as well,” Borg said.
The U.S. Federal Trade Commission Consumer Sentinel notes that there has been a 65 percent increase in fraud complaints from military veterans over the past five years. One of those scams involves single veteran men who live in nursing homes and have no family.