Scammers are becoming more skillful at financially exploiting the elderly, according to the National Adult Protective Services Association, but efforts to combat the crimes also are growing.
Financial abuse of the elderly used to be the province of family members, who accounted for two-thirds of the culprits, while strangers were only a third. Now association research puts that balance at closer to fifty-fifty, said Joe Snyder, the lead author of a new white paper called “All in This Together: Adult Protective Services and Financial Institutions’ Efforts to Combat Elder Financial Exploitation.” The paper was put together to illuminate the problem of elder abuse and encourage cooperation among those who see the signs first. Snyder, the National Adult Protective Services Association’s public policy chair, discussed the report with Financial Advisor in an interview.
The white paper’s release coincided with World Elder Abuse Awareness Day last week on June 15 and was published amid a growing awareness of the problem, Snyder said. The National Adult Protective Services Association has teamed up with the financial industry to fight elder financial abuse because financial advisors and banks are often the first to see signs of exploitation, he said.
The North American Securities Administrators Association also added to the chorus last week, reminding financial professionals and the public to be on the lookout for signs of elder financial abuse, including potential exploitation and scams.
“It is a sad truth that there are folks looking to prey on unsuspecting investors and all too often they target older individuals,” said Andrew Hartnett, the NASAA’s president, in a statement. “One way to help detect and even prevent financial exploitation is to add a trusted contact to investment accounts. Having a trusted contact provides another layer of safety for investment accounts.”
AARP contributed a new report, too, saying, “Older Americans lose an estimated $28.3 billion annually to elder financial exploitation.” That report, however, said family members are still two-thirds of the exploiters. AARP further noted that 87.5% of adults age 60 and over who are victimized by someone they know never report the incidents to authorities. By contrast, only one-third stay silent if they’re victims of exploitation by strangers.
Estimates of the amount of money lost to financial exploitation vary widely depending on the research, but all estimates suggest that the annual losses are in the billions. An AARP paper, called “The Scope of Elder Financial Exploitation: What It Costs Victims,” says elderly people lose $28.3 billion annually to exploitation (a figure that includes estimates of unreported exploitation).
“It always perplexed me that the subject has not gotten more attention,” Snyder said. He and his co-authors on the “All in this Together” report are trying to change that. The report, released under the auspices of the National Adult Protective Services Association’s Financial Exploitation Advisory Board, had two additional authors. One was Lara Hinz, a director of programs at the Women’s Institute for a Secure Retirement. The other was Philip C. Marshall, the founder of Beyond Brooke, an advocacy organization named for his grandmother, Brooke Astor, who was exploited by her son, Marshall’s father.
“Because of the loneliness and isolation of the elderly, it is a perfect storm for the proliferation of fraudsters,” Snyder said. “I hear so many horrible stories after the fact, and there is no way to fix it then. I have heard of 48 years of savings being lost in 48 hours.”
The subject will be center stage at the National Adult Protective Services Association’s annual conference in August in Boston.
The white paper recommends, among other things, that the American Bankers Association take the lead to develop and maintain a list of bank contacts to be used by Adult Protective Services organizations in each state when cases of abuse are spotted. Financial institutions should use a centralized reporting system to retrieve information for Adult Protective Services offices.
In addition, reports of suspected exploitation should be made by financial institutions when possible exploitation is first reported by a financial professional, including financial advisors, the report said.
The paper also said that the National Adult Protective Services Association and the American Banking Association should take the lead in facilitating discussions, enhancing processes, removing barriers and drafting model legislation to protect clients.
“In recent decades, significant progress has been made in combating elder financial exploitation and protecting society’s most vulnerable adults,” says the white paper. “The growing partnerships and collaborations between Adult Protective Services agencies and the financial industry are essential in the fight against financial exploitation, fraud and abuse.”
But, “there is still work to be done to build familiarity and trust in these relationships and to strengthen policies and infrastructure that will lead to better efficiencies and greater protection,” the report said.
New federal funding for protective services programs has been made available through a law passed several years ago to help frontline workers respond to difficult cases. Budget bills passed by Congress authorizing new spending under the Elder Justice Act has provided $400 million to help fight elder financial abuse. The amount was called unprecedented by the National Adult Protective Services Association.
Another law, the Senior Safe Act, “presents an opportunity for Adult Protective Services programs to reach out to entities covered under the act to train financial professionals to recognize and report cases of suspected elder abuse,” the association said.