Elder Financial Abuse on the Rise - Consumer Justice Foundation

Elder Financial Abuse on the Rise

Written by Faith Anderson on June 7, 2011
ElderMoney

Exploration of Elder Financial Abuse in America

The June 2011 study, titled “The MetLife Study of Elder Financial Abuse: Crimes of Occasion, Desperation, and Predation Against America’s Elders,” was conducted as a followup to the 2009 study, “Broken Trust: Elders, Family, and Finances,” and sought to examine the prevalence and impact of elder financial abuse in America. The 2009 study was considered to be groundbreaking, a resource providing a comprehensive perspective regarding the extent and implications of elder financial abuse. The most recent study, accompanied by a consumer guide and tip sheets on ways to prevent financial abuse of the elderly, explores the varying elements of financial exploitation, information gathered largely from articles provided by the National Center on Elder Abuse. According to this resource, approximately $530 million in reported losses from all forms of elder financial abuse occurred over a three-month period from April through June 2010. Taking into account this amount plus unreported losses, MetLife estimates the annual dollar amount lost by victims of elder financial abuse in 2010 to be $2.9 billion, a increase of 12% from the estimate established in 2008.

Study’s Findings Regarding Financial Crime Against the Elderly

According to this followup study, crimes involving strangers accounted for more than half (51%) of reported cases of elder financial abuse, the most common scenarios being victims targeted while out driving, shopping or managing financial affairs. These predators reportedly looked for visible signs of vulnerability in their victims, including walking canes, handicap tags on cars, living alone, or displays of confusion, and then carried out purse snatchings, cons, and associated physical assaults. Second most common (34%) was elder financial abuse carried out by family, friends and neighbors. In instances in which the perpetrator was known by the victim, the most common scenarios involved trusted individuals like friends, handymen, caretakers, children or lawyers forging checks, pilfering bank accounts, stealing credit cards, transferring assets, and generally destroying the financial safety nets of elders.

Reports of financial exploitation within the business sector comprised 12% of elder financial abuse, followed by Medicare and Medicaid fraud at 4%. Although Medicare and Medicaid fraud made up the smallest percentage of elder financial abuse reports, this type of exploitation accounted for the highest average loss to victims in this study ($38,263,136). Fraud by business and industry accounted for the second highest average loss to victims ($6,219,496), followed by fraud by friends, family and neighbors ($145,768), and fraud by strangers ($95,156). The typical victim of elder financial abuse was, according to the results, a women between the ages of 80 and 89, who lived alone and required assistance with either home maintenance or health care. Nearly 60% of perpetrators were males, mostly between the ages of 30 and 59. According to the director of the MetLife Mature Market Institute, this financial exploitation of the elderly was achieved through threats, deceit, and emotional manipulation, sometimes also involving physical and sexual violence.

How to Prevent Elder Financial Abuse in America

According to MetLife, financial abuse of the elderly appears to fall into three types of categories: occasion, desperation and predation. Financial crimes of occasion occur when the victim is simply in the way of what the perpetrator wants, while crimes of desperation occur when family members or friends are desperate for money and will do whatever it takes to acquire some, and crimes of predation occur when an individual establishes a trusting relationship with the potential victim with the sole intention of exploiting that person at some point in the future.

MetLife representatives urge friends and family to help protect elders from financial predators, which may involve predation by strangers or even other loved ones. According to the Institute, there are a number of different forms of vulnerability which make elders more susceptible to financial abuse:

  • Consistent and Explicit – poor physical or emotional health, impaired mobility, dementia
  • Implicit – some scholars suggest that older adults may be more trusting and generous than younger generations
  • Situational – elders who are alone or isolated or elders who live with a relative

The passage of the 2010 Elder Justice Act may bring more attention and resources to this crime, potentially preventing further financial abuse of the expanding elderly population. Furthermore, a new Office of Financial Protection for Older Americans has been instituted as part of the new Financial Regulatory Reform Bill, and Congress continues to devote attention to the issue of elder financial abuse. The Center for Gerontology at Virginia Polytechnic Institute and State University was established in 1977-78 as an organizational unit for aging-related research, focusing on research to protect elder rights and improve the quality of life of older adults. The National Committee for the Prevention of Elder Abuse (NCPEA) was established in 1988 as the first U.S. nonprofit organization intended to identify, prevent, and respond to the abuse, neglect, and exploitation of older individuals and adults with disabilities.

What Financial Abuse of the Elderly Means for American Consumers

This followup MetLife study was intended to evaluate the impact of financial abuse on the lives of older Americans across the country. New research has indicated that the instances of elder financial abuse are far higher than previously reported. In fact, according to a recent prevalence study involving the state of New York, the highest rate of any type of elder mistreatment was financial abuse, with a rate of 41 per 1,000, or 4%. Sadly, the prevalence of elder financial abuse was elevated during the holiday season, accounting for 31% of the 1,128 reported cases from November 2010 to January 2011. In addition, dollar losses due to friend, family and neighbor perpetrators were higher than any other category during the holidays.

Even in 2011, elder financial abuse continues to be the “Crime of the 21st Century,” according to MetLife, a crime that is often accompanied by other forms of elder mistreatment. Financial abuse of the elderly continues to devastate the incomes of older Americans, while also provoking health care inequity, tearing apart families, and reducing available health care options. This type of financial abuse leads not only to financial losses, but also the loss of dignity and human rights among elders, as exploitation of the elderly often reaches beyond a single reported event. Despite the fact that significant attention has been paid to this unfortunate crime, financial abuse of the elderly remains under-reported, under-recognized and under-prosecuted.

Posted Under: United States
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