Ripoff Alert #10 – Elder Abuse Edition

The Ripoff Alert is a new series appearing once each week on Fridays. It alerts you to the latest scams and ripoffs trying to get between you and your money, and gives you information you need to stay safe.

Elder Financial Abuse

In a sad twist for our nation’s elderly citizens, scamsters are increasingly turning their attention towards seniors.

According to insurance provider Metlife, Americans over age 60 lost $2.9 billion in 2010, up 12% from 2008. The most tragic part is that a third of the fraud is committed by family, friends and neighbors. The people who seniors trust most are often the ones ripping them off.

Seniors tend to be more trusting than the general population, which makes them an easy target for crooks. Some receive assistance from neighbors or family to pay bills, collect the mail and other household tasks. In addition, many seniors have a set routine they go through each day. Their predictable pattern of behavior makes it easy to steal money and other belongings from them.

Most seniors who realize they’ve been scammed keep quiet about it because they’re too embarrassed or ashamed to admit they’ve been victimized. Others may not realize they’ve been scammed until much later, but by then it’s too late to get their money back.

The Consumer Financial Protection Bureau, which in past months has gone after payday lenders and mortgage fraud, is launching an investigation into elder financial abuse. Richard Cordray, the bureau’s director, calls this the “signature crime of the 21st century.” The agency is focusing its efforts on fraud and deceit targeting those 62 and older and so-called financial advisers who claim to have expertise helping senior citizens.

In many cases, these scams can be prevented if adult children intervene in time. The solution might be to take away the checkbook and debit card. This could cause them to lose their sense of independence, but you’re the one who needs to protect them.

If you have elderly relatives, talk to them about the kinds of mail and phone calls they’re receiving. Find out if they’ve been asked for money or bank account numbers from anyone. Take a look at their checkbooks and bank statements for any evidence of fraud. This is one case where you need to be nosy.

4 thoughts on “Ripoff Alert #10 – Elder Abuse Edition

    • It’s something none of us want to think about. I think that’s the reason many of us assume it doesn’t happen. It’s a growing problem though, so anyone with older relatives needs to check in on them to protect them.

  1. I thought about this the first time I heard about Reverse Mortgages. Really? They found a way to drain the money out of old people? – is what I thought … It’s sad. It will be amazing if anyone dies with anything to leave with their loved ones anymore.

    • Reverse mortgages can be a good idea if you’re older, own your house free and clear, need money for day-to-day expenses and don’t have any family you want to leave assets with. Unless you meet all of these criteria a reverse mortgage isn’t a good idea because of the high fees.

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