Who’s in your elderly loved one’s life, besides you, and why are they there? What do they get from the relationship? If you don’t have ready answers, your elder might be at risk of financial exploitation – if it hasn’t happened already. You’re the caregiver, with lots of love, time and effort invested. Help protect the people who mean so much to you by understanding how deep and wide the exploitation problem is, and knowing the questions to ask and techniques to use, to reduce the risk that someone will take advantage of your elder for financial gain.
First, let’s look at the nature and extent of the problem…
- It could be happening right now on any street, in any town. A report in March 2016 by Investor Protection Trust estimates that one in five Americans over age 65 has been a victim. Sometimes exploitation is done legally, through inappropriate investments, unreasonable fees for financial services, work-at-home schemes, subscriptions with hidden charges, and bogus diet programs, to name a few. Sometimes it’s outright criminal fraud. The Certified Financial Planner Board of Standards, in a 2012 report, estimated the median loss at $50,000 per individual. Because of some very large individual losses, the report estimates the actual average at $140,000.
- The problem is getting worse, for a couple of reasons: First, the U. S. Census Bureau estimates there are 41 million people over age 65 in the U.S., and that number will nearly double, to 70 million, in the next 15 years. So the number of potential victims is increasing. Second, the number and kinds of schemes against the elderly continue to proliferate. It is so easy for criminals to target elders. They can buy mailing lists and email lists that are customized to a high degree. With Voice Over Internet telephone service and email, it costs very little for criminals to reach their tentacles to massive numbers of vulnerable people. Transfer of bank funds by electronic means also is easy. So technology does make exploitation easier. We’ll get to some examples of fraud in a moment.
Exploitation often goes undetected. No one has to remind you how busy a conscientious caregiver is. Maybe you are caring for an elder while raising children of your own, or helping with grandchildren, while pursuing a career. Maybe you live a considerable distance away. Those circumstances can allow exploitation to happen under the radar, undetected at least until the damage is done.
There often is a ‘don’t ask, don’t tell’ mentality among professionals regarding their elderly clients. Unless someone expresses a specific concern, your loved one’s doctor, financial advisor, attorney who does not specialize in elder law, or other professional is not likely to identify and report abuse. There are some promising initiatives now to overcome this mentality, as the Investor Protection Trust report notes, but we have a long way to go.
The variety of scams is endless. A few examples:
Fraud artists call elders, saying something like this: “Hello, I’m Christopher Robbin’ from the Department of Health and Human Services. As you might know, Mrs. Victim, the Affordable Care Act requires that we contact you every three years to verify your Medicare beneficiary number, so you can continue to receive Medicare.” There’s no such requirement in the law, of course, and federal government representatives NEVER contact people by phone to ask for personal information. But for many who have Medicare, the fear of losing their coverage because of some technical mistake will override whatever suspicions they might have about talking to a stranger on the phone. Fraudsters sometimes obtain Medicare numbers by promising to provide services for which Medicare supposedly – but won’t – reimburse them, such as housecleaning. Sometimes they work the scam by phone; sometimes door-to-door.
With that Medicare beneficiary number, the fraud artist has a very valuable commodity. That number can be sold numerous times, and not just for unlawful use of Medicare benefits or bogus billing for Medicare services. The Medicare beneficiary number includes the entire Social Security number! So the number can be, and is, used for general-purpose identity theft.
There are various lottery schemes and business schemes, all of which require that the victim give up some personal information, or money, or both. (“Yes, ma’am, we will send you a certified check for the Jamaican Lottery’s grand prize of $3,200,000, as soon as you send us $3,112.46 for taxes owed on your winnings.”) Elders who fall for such schemes never get any benefit, and often lose tens of thousands of dollars if they stay on the hook.
Scam artists sometimes call and impersonate a relative who is in trouble with the law and needs money sent by wire, right away, or they’ll go to jail. (“Don’t tell my parents, Grandpa. They’ll just get mad. I’ll pay you back as soon as I get home!”) If Grandpa is on social media, the scam artist might have learned his grandson’s or granddaughter’s name, to make the call sound very authentic.
Another social media trap is the “sweetheart” scam. The scammer, often in a foreign country, can pretend to be anyone the victim is likely to fall in love with – and will send a photo of someone who looks exactly like that sweetheart. “I want to come to the U. S. to meet you…Oh no! I had an emergency and can’t afford the $3,000 airfare now…You’ll send money? Oh, that’s wonderful! We’ll be together soon!” There’s no emergency; no airfare; no sweetheart. Just a scam to get a few thousand dollars, with a broken heart as collateral damage.
It isn’t just career criminals who target elders. Often, the perpetrator is a neighbor, a relative, or someone who just happens to come into the person’s life by chance, and sees a one-time opportunity to take advantage of a vulnerable person for financial gain. They might do it to get out of a financial jam, and even intend to pay it back…or so they tell themselves at the time. Or they might decide they’re owed an extra helping of cash or property, for the many hours they spend caregiving, the lack of gratitude expressed, or whatever other reason they can embrace. So, ask that question: “What are they getting out of this relationship?” Beware that long-lost cousin who says he or she is “between jobs” and volunteers to help with the caregiving. Really, cousin?
The Federal Trade Commission reported that one fourth of fraud complaints in 2014 involved financial abuse of elders. That is up from just 10% of all complaints in 2008. The blob is growing.
Do you live at such a distance that you cannot see your elderly loved one frequently? One of the biggest concerns families have is that their elders who live independently are lonely, and will suffer from that. Perhaps a spouse died. Perhaps friends their same age are dying, too. It’s natural to want to provide companionship for the elder, whether the companion is someone with caregiving responsibilities, or just a friend. But be careful! Isolation and loneliness are not as bad as having the wrong people in your elder’s life – people who might seek to exploit him or her – or at least take the opportunity if it’s there.
Don’t depend on law enforcement. They won’t know of a problem until the damage is done. Don’t depend on Adult Protective Services, either. They can be very helpful once they become involved, but it really is up to elders’ families to keep the situation from getting to that point – to watch for signs of abuse, and take action to prevent it. The job cannot be outsourced. There is too much at stake. Loving, caring family members like you are the first, second and third lines of defense against elder exploitation.
In order to recognize possible abuse, an elder’s family members need to ask some questions – not just once, but regularly. Start with that threshold question from the top of this article: Who is in your elderly loved one’s life besides you, and why are they there?
Never underestimate the influence of whoever is in your loved one’s life. Unfortunately, sometimes that influence is negative, and even devastating. If there is cognitive impairment, the exploitation becomes easier.
Another question to ask, for those who have engaged caregivers for their elderly loved ones: Is that caregiver standing between you and your loved one, in any way?
For example, when you call, does the caregiver answer, and tell you the elder is sleeping, or for some other reason can’t come to the phone? The caregiver might be telling your elder you never call, and therefore you are no longer attentive. This is just one way unethical caregivers sometimes drive a wedge between elders and family members, and exert undue influence. They might say something like, “You’re so good to me. I wish my mom had been as good to me as you are”…planting the seeds for the elder to give the caregiver cash or other gifts, or perhaps name the caregiver as a beneficiary in the will.
Here is another example: Does the caregiver always manage to be present when you visit, and perhaps answer questions that you asked your loved one directly? Being there when you visit can be the unethical caregiver’s way of inhibiting a conversation that otherwise might reveal undue influence. So look at the relationship. If the caregiver is between you and your loved one in any way – any way — something isn’t right.
One more suggested question to ask, to detect signs of abuse: Is this the person you’ve always known? Exploitation leaves scars. Do you see nervousness, suspicion, withdrawal from normal activities, hesitancy to speak or make eye contact, for example? Is there deference to the caregiver, if he or she is present?
To guard against these exploitation techniques, keep control of the communication. If your elder can’t come to the phone when you call, leave a message to call you. If your call isn’t returned, follow up until you reach the elder, and tell him or her that you have left messages.
When you visit, take your elder to lunch or dinner, without the caregiver. The elder probably will appreciate the opportunity to get out, and a good caregiver will be glad to have a break.
Here’s another important question to ask, to spot warning signs: What’s happening with the money? There are good reasons for you to have durable power of attorney for your elder. It allows you to receive duplicate copies of bank statements and bills, or view them online. A few things to watch for:
- checks written to people you don’t know
- monetary gifts to the caregiver
- an unusual number of cash withdrawals
- use of an ATM when the person has not used one in the past
- inappropriate or questionable investments or financial instruments.
Having durable power of attorney is one way you can help your elder, even if you live so far away you cannot visit often.
To obtain power of attorney, you can bring it up as part of a broader discussion about estate planning. And the time to have that discussion is while the elder still has cognitive ability to make important decisions. Estate planning — with the help of an attorney who specializes in elder law (that qualification is important) includes strategies to make sure the elder’s assets will be disposed of according to his or her wishes, as expressed to the family in official documents. Occasionally, say to your elder, “Let’s review your estate documents, and see if we need to change anything. By the way, have you changed anything?”
Is the elder hesitant to answer your questions about financial transactions that don’t make sense to you? Dig deep to find out why. It might take some time for the elder to open up. If they know someone has taken advantage of them, they might be reluctant to report it. They don’t want you to think they are naïve, or vulnerable. They don’t want you to put them into assisted living or a nursing home. It could be that they want to protect a relative, if that’s who the abuser is, because they love that person’s parents. It could be any of those things. Talk to your elder. Express your concern in a gentle way, using specific examples of what you have noticed. Remind him or her of your love and support, and ask all the questions you have. Allow enough time to peel that onion and see what’s really going on.
On the prevention side, you might say something like, “Dad, if you hear about an investment opportunity that sounds interesting, let me know before you make a decision. Maybe I can help you check it out.” If you already have power of attorney, this is a very natural suggestion to make.
Let your elder know that if someone contacts them by phone or email, or through social media such as Facebook, it could be someone trying to trick them into sending money, or disclosing their personal information in a way that would allow identity theft. Remind them that Social Security numbers, credit card and bank account numbers can be used to gain employment, open credit accounts, and drain bank accounts. There are news reports about this every day, so you should be able to convince them they should be cautious.
Sometimes the solution is simple. Caller ID is a great tool. If the elder doesn’t recognize the name and number of the person calling, they shouldn’t answer. Just turn down the ringer volume and let the phone ring until the caller gives up. Consider getting rid of the answering machine for the landline, so messages can’t be left. For emails and social media contacts asking for information or offering an opportunity, advise your elder not to respond, but instead let you check it out for them. You can Google whatever it is and find articles or blog posts about it.
Some other ideas you might consider, regarding prevention of abuse…If you live close to your elder, consider having his or her mail go to a post office box, and pick up the mail yourself. Sometimes exploiters have intercepted the mail, then changed the address for bank and credit card statements, so the exploiter receives the statements and the elder never sees all the overdrafts or the unauthorized credit card charges.
Consider prepaid credit and debit cards for your elder. They aren’t linked to any bank account, and can be loaded and reloaded with limited amounts. True Link Financial is one company offering a card that’s intended especially for elders who are impulsive buyers. It can be customized so there’s no more than one transaction on a given day, purchases from certain merchants are blocked, and other such constraints. It’s a good way to keep a scammer from draining a bank account.
If you are hiring an outside caregiver, execute a written agreement that the caregiver will not accept gifts of any kind, including bequests in a will. This might mean modifying the standard agreement, but insist on it.
If you hire a caregiver through an agency, make sure the agency is bonded, which gives you a way to recover in case of theft. The agency also should have professional liability insurance, and should conduct thorough background checks on its applicants. However, a clean background report doesn’t mean the caregiver would pass up an opportunity. In many cases of exploitation, the culprit is someone who had no criminal record but had a chance to steal – a chance they chose not to resist.
If you ever get to a point where you are uncomfortable with the hired caregiver for any reason, terminate the relationship. No explanation is required. As Paul Simon expressed it, “You don’t need to be coy, Roy. Just get yourself free.”
If you suspect that a relative or acquaintance is abusing your elder, confront the suspected abuser. If abuse is not occurring, the person you suspect will be able to explain the situations that concern you, to your satisfaction. But if your suspicions remain, bring the matter to a resolution quickly. In some cases, that means telling the suspected abuser not to have further contact with the elder. If you are willing and able to have that conversation in person, you’ll learn more about the suspected abuser at that moment than you ever would in a phone or email exchange.
You also have your local social services department, Adult Protective Services, police department and sheriff’s department available to help, if you suspect abuse. You don’t have to have an ironclad case against someone before you go to those agencies. Just tell them what you know, and what you have observed. They’re trained to investigate on behalf of you and your elderly loved one.
In closing, I take this opportunity to say I admire you greatly, for the service you are providing as a caregiver.
Department of Justice Elder Justice Initiative — http://www.justice.gov/elderjustice/
National Adult Protective Services Association – www.napsa-now.org (find nearest APS office)
National Council for Aging Care – http://www.aginginplace.org/guide-to-recognizing-elder-abuse/
Consumer Financial Protection Bureau – www.consumerfinance.gov
AARP BankSafe Campaign — http://www.aarp.org/content/dam/aarp/ppi/2016-02/banksafe-initiative-aarp-ppi.pdf
Ageless Alliance – www.agelessalliance.org
TrueLink Financial 2015 report on elder financial exploitation — https://www.truelinkfinancial.com/research