America is aging — baby boomers are now moving toward their 60s and 70s. With the number of older Americans rising comes an increased risk that they may be defrauded of their life savings — sometimes by someone they know and trust, even members of their own family.
Minnesotans are known for looking out for one another. Yet, as this growing trend of fraud against seniors underscores, our neighborly attention would do well to extend beyond helping shovel after a big snowfall to the more sensitive topic of preventing elder financial abuse.
Elder financial abuse is an issue that is coming out of the shadows. Last July, the White House Conference on Aging announced that several federal agencies are planning initiatives on the topic, including a National Institutes of Health workshop and an advisory for financial institutions from the Consumer Financial Protection Bureau to help them prevent, recognize and report elder financial exploitation.
We discovered through our own research that elder financial abuse thrives in the dark. Friends and relatives of elder financial abuse victims said that half the time an incident occurred, it wasn't reported. We also know from others, summed up in a recent New York Times article, that our mental acuity, particularly related to numerical and financial concepts, wanes as we age, making older adults more susceptible to financial exploitation.
Although there is no single solution for stopping elder financial abuse, there are tactics that can help slow its growth. The most effective way to help safeguard yourself is to bring the issue to light. Simply put, make it a priority to talk to friends and family members you truly trust.
Keep at least two people in your life clued in to your financial situation. Give them a general sense of where your savings and investments are, and discuss any big transactions. These trusted people need not be financial wizards, but they can help identify the information you need to evaluate a financial decision. A third-party professional (attorney, accountant, financial adviser, etc.) also can play an important role in connecting elders and caregivers with resources to protect them from financial abuse.
We found that elders who regularly talk to a third-party resource about their finances feel they are better equipped, more confident and better able to identify and prevent elder financial abuse. An objective third party can be very valuable to detect when an investment scheme is too good to be true, or when a family member's request for a loan or sizable gift is not appropriate.
Unfortunately, our research indicated that seniors are reluctant to turn to others for help. Even among older people who have already been a victim of financial abuse, only 8 percent were currently discussing their finances with another person, and less than a quarter told us they were keeping in touch with others on a regular basis to protect themselves from future abuse.
