I’m approaching middle age. Most of my relatives are senior citizens, ready for retirement.
But a few bad decisions could ruin everything for them.
Because of the age and deterioration of their mental and physical capacity due to age, seniors become prime targets for con artists. Many scams go under the radar and never get publicity; many go unreported due to embarrassment. According to the Investor Protection Trust‘s Elder Investor Fraud Survey, one out of every five citizens over the age of 65 has been a victim of financial fraud.
According to the Pew Research Center, seniors are better off than younger people. In 2009 the typical household headed by the older adult had $170,494 in net worth, compared with just $3,662 for the typical household headed by the younger adult. Folks usually accumulate wealth as they age, so it makes sense that there would be large gaps in wealth based on age.
But this concentration of wealth paints a large target on seniors.
Many elders fall prey to clever marketing tactics used by TV personalities who advertise to invest in gold, art dealing and too-good-to-be-true scams. While these con artists use mass media, seniors are also sometimes betrayed by those they know best, people who portray themselves as friends or helpful relatives.
They persuade seniors by asking for a credit card number or bank statement. The more ambitious types persuade seniors into signing over power of attorney.
The aging process makes people more susceptible to fraud. Studies have shown that mental capabilities peak at 53. According to the Alzheimer’s Foundation, over 5 million Americans have some form of the disease.
Education and awareness can help protect against fraud. If something is too good to be true, chances are it isn’t. Before making an important financial choice, do your own research. Talk with a trusted financial advisor, and do some reading.
Before you sign something, read it. If it is confusing and complicated, chances are whoever wrote it doesn’t want you to understand. A simple test is to ask if you can can come back after you have someone review it. If whoever is trying to sell you on the deal pressures you, head for the door. If it is a good investment today it will be good tomorrow.
If you have older loved ones, it’s good to look out for them. If a typically outgoing relative has become isolated or withdrawn, it could be out of pride or fear that he or she is in trouble. Use your instincts to probe your elderly relative about what is wrong.
If your relative decides to give you financial power of attorney, review his or her financial statements on a regular basis, and look for any suspicious activity on their accounts. Unusual signatures and flurries of unexpected financial transactions could be red flags.
Your elder may want to donate money or use his or her savings to invest. But do some research to see if the charity or investment opportunity is reputable. Get the information in writing, review the fine print and see if it is legitimate. You should always ask for written information from the organization or charity. Reputable businesses or organizations know that it is proper protocol to ask for written information. If you are unfamiliar with companies, you can contact your local consumer protection Agency, better business bureau, or state attorney general’s office.
My last piece of advice is know your legal rights. Before you invest or make a transaction, you should educate yourself about consumer rights.
For victims, the chance of recovering stolen money can be slim. It is plausible that there will be no arrest for the perpetrator. So be wary and be vigilant on behalf of yourself and the seniors in your life. There are con artists out there, planning their next scam.
