In recognition of National Financial Literacy Month, and in light of the influx of fraud crimes against seniors in Austin since the beginning of the year, AGE of Central Texas is sharing some important information and tips to empower our community members to protect themselves from elder fraud and remain financially secure.
What is financial fraud?
According to the Financial Fraud Enforcement Task Force, “Elder fraud is an act targeting older adults in which attempts are made to deceive with promises of goods, services, or financial benefits that do not exist, were never intended to be provided, or were misrepresented. Financial exploitation is the illegal or improper use of an older adult’s funds or property.” We are all affected in some way by financial fraud. This range of illegal behavior may encompass a variety of activities including Ponzi schemes, identity theft, tax fraud and mortgage scams. The Texas Office of the Attorney General receives complaints from seniors for a wide variety of scams. The following are examples of some of the more common scams:
- “Grandparent” scam
- Home repair and door-to-door scams
- Foreign lottery and sweepstakes scams
- “Miracle” health scams
- Find more details here
Identity theft and credit card fraud are also forms of financial exploitation. Credit thieves can steal information in a variety of ways including obtaining lost or stolen credit cards, stealing from mailboxes, searching through trash, looking over an individual’s shoulder while he or she is paying at a store and requesting personal information such as Social Security and bank account numbers. Never give out personal information to someone who calls or contacts you!
Why should I worry about financial fraud?
According to the Elder Investment Fraud and Financial Exploitation (EIFFE) program, financial literacy and security are important for older adults because these details also impact one’s overall health. In fact, access to appropriate nutrition options and healthcare are both affected by finances.
Various characteristics of the normal aging process can leave individuals vulnerable to fraud, including changes in one’s ability to make sound financial decisions. Furthermore, the Alzheimer’s Association reported studies that suggest 10 to 20 percent of adults over 65 may have Mild Cognitive Impairment, making them particularly susceptible to fraud. In addition, those who grew up in the 1950s and earlier were raised to be polite and trusting; traits con artists readily exploit.
A 2011 MetLife report revealed annual financial losses of exploited seniors to be as much as $2.9 billion. Another report found that one in five adults over 65 has been swindled. Experts say that con artists and criminals frequently target older adults because they are more likely to have retirement savings, great credit and own their homes. Despite these significant losses, some estimates indicate that only one in 25 cases of financial fraud against senior citizens is reported.
How to avoid becoming a victim of financial fraud?
Talk with your loved ones and make sure they are aware of the threats before something happens. This conversation may be more difficult if exploitation has already occurred, as individuals may fear loss of independence as a consequence. It is also helpful to monitor finances by reviewing copies of credit reports. To cut down on unwanted calls, register home and cell phone numbers on the National Do Not Call Registry at https://www.donotcall.gov/or by calling 888-382-1222.
Locally in Austin, Constable Precinct 3 runs the Senior Fraud Prevention Program, which brings together nonprofits and businesses to help prevent elder fraud and assist those who have been victims. The Office tells AGE that “Awareness and vigilance are the keys to avoiding scams. By working together to raise awareness, law enforcement agencies can help Texas seniors protect their finances, their identities and, most importantly, their dignity.” The Office also suggests those who suspect fraud call their local Law Enforcement to report any suspicious activity. You may report elder financial fraud to Adult Protective Services by calling 1-800-252-5400 or online at the Texas Abuse Hotline.
Be aware of the following red flags:
Are you an older adult or do you know one who…
- Is socially isolated, depressed or lonely?
- Has experienced a change in the ability for self-care?
- Depends on someone to provide everyday care?
- Is uncomfortable with the person providing care?
- Has just lost a loved one, such as a spouse?
- Is financially responsible for an adult child or spouse?
- Has given Power of Attorney to someone else to manage his or her finances?
- Read more here
Additional Sources and Resources: