Financial Fraud

Elderly individuals in our society are often the victims of financial fraud. Elder fraud is a term used to define the act of targeting older individuals wherein attempts are made to deceive with promises of goods, services or financial benefits which don’t exist, were never intended to be provided or were misrepresented. Financial fraud is the fastest growing form of elder abuse and it is a form of abuse that is hard to do battle with in partly due to the fact that is often goes unreported.

Many elderly victims of financial fraud are confused, afraid or too ashamed to report it. It is estimated that there are at least 5 million cases of this type of elder abuse taking place each year in our country with most never being reported. One reason elderly are at high risk for financial fraud is that older individuals expect honesty from others and are less likely to take action when victimized by financial fraudsters. They also tend to be less knowledgeable about their rights.

Elders at the highest risk for financial fraud are those who are isolated from family, the physically or mentally disabled, widows and widowers and those who do not know how or who cannot manage their own financial affairs. While financial fraud among the elderly population can take many forms, the most widespread abuses include:

Telemarketing Scams – The American Association for Retired People (AARP) states that 56% of those contacted by telemarketers are over the age of 50. It can be very difficult to tell if a telemarketing call is legitimate and even more so when you’re being pressured into making an instant decision. Many financial scam artists pose as legitimate telemarketers wherein they call elderly individuals. They may tell an elder that they’ve won something but that in order to claim the prize, they have to send a payment to cover the taxes on the prize.

Identify Theft – Many victims of identify theft are older individuals who do not take necessary measures to protect their sensitive personal information. A financial predator who is targeting an elder may go through the elder’s trash to look for receipts, bank statements, expired credit cards or offers for new credit cards. Some perpetrators contact elders via telephone to pressure the victims to give them their Social Security numbers.

Home Improvement Scams – Elders are attractive targets for financial fraudsters who run home improvement scams by selling “home improvement” services either via telephone or in person. In this type of scam, the victim is promised some type of home improvement for a very low fee. Sometimes the victim is required pay cash up front with the promise the work will start immediately. Other times the victim is coerced into giving the fraudster their bank account or credit card information wherein large amounts of money end up being stolen. Either way, the victim does not get any home improvement work done and if he/she does, the work is done using inferior materials wherein the quality of the work is poor at best.

Estate Planning Scams – Estate planning is the ordering of one’s affairs so that personal and financial matters will be tended to when the person dies or when the person is unable to attend to these matters due to them being incapacitated. Estate planning devices may include wills, trusts, powers of attorney and joint tenancies. It is common for a perpetrator who is given the power to tend to an elderly individual’s matters to take advantage of this power by doing things like withdrawing money from the victim’s bank account, transferring property into their name and even having the victim placed against their will into a long-term care facility.

Warning Signs

There are a few warning signs that could indicate an elderly person is a victim of financial fraud. These “red flags” can be as obvious as a sudden inability to pay one’s bills. However, most often the signals are more subtle and may include:

  • Large amounts of money are being withdrawn from the elder’s bank accounts
  • A change of power of attorney or beneficiaries on insurance or investment accounts
  • Bounced checks
  • Unusual purchases being made
  • Suddenly being “good friends” with someone who is unknown to family and friends
  • Secretive behavior
  • Unwillingness to discuss his or her finances
  • Disappearance of papers, checkbooks or legal documents
  • Provision of services that are not necessary
  • Withdrawing from close friends and family

If you suspect that your elderly loved one is the victim of financial fraud, you should contact a California fraud attorney. To report financial abuse that has taken place in a nursing home, you should contact your local law enforcement agency as well as the local long-term care ombudsman or the Bureau of Medi-Cal Fraud and Elder Abuse. Under California law, some people are legally mandated to report known or suspected cases of elder abuse which includes doctors and other medical professionals, employees of nursing homes, hospitals & adult day care centers as well as anyone who is responsible for the care or custody of an elderly person. Per the California Welfare and Institutions Code section 15630, any mandated reporter who fails to report elder abuse may be guilty of a crime.

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