The number of older individuals living in the United States is growing as a percentage of the total population. More people are suffering from Alzheimer's and other forms of dementia. But even otherwise healthy adults, age 65 and over, can experience subtle declines in judgment, and may no longer be able to tell whether someone is trustworthy or not. For others, they may have lost the ability to be skeptical of ʺtoo good to be trueʺ offers. That′s why warnings about scams aren′t always effective for older adults. Seniors who suffer even the slightest decline in decision-making often don′t think the warnings apply to them.
Age-related impairments or vulnerabilities can lead to poorer decision-making, especially where money-matters are concerned. Age-related vulnerabilities put older adults at risk for fraud and other types of financial loss. Social isolation and medical illness are contributing factors, too, since they feed the loneliness and desperation that can predispose older adults to financial exploitation. Medical researchers like Drs. Mark Lachs, of the Cornell Weill Medical School, and S. Duke Han of Rush University Medical Center in Chicago, coined the term ʺage-associated financial vulnerability.ʺ Lachs and Han describe it as a pattern of risky behavior related to money, and characterized by making decisions that are inconsistent with choices an individual made when they were younger. Lachs notes that the prevalence of marketing schemes, financial products and services targeting older adults is a "public health crisis for patients and families."
Learn about the challenges facing law enforcement and caregivers when combating foreign lottery scams
There are no guarantees. Scammers are clever. They prey on
anyone who will listen, Regardless of income, education,
social status, race, age or gender — given
the right circumstances, anyone can be conned. But there are
steps everyone can and should take to help protect
themselves and loved ones, and keep scammers at arm's
The U.S. Postal Inspection Service regards consumer education as one of its top weapons in fighting fraud. Postal Inspectors across the country help consumers by raising awareness about the growing prevalence of these crimes, especially among seniors, and how families can reduce the chances they, or someone they know, will become ensnared in one.
The most important action anyone can take is to reduce their exposure to marketing situations. This is especially true when it comes to stopping telemarketers, robocalls and Internet offers directed at your household. Some of these could be legitimate, but many are not. Persons who expose themselves to marketing offers and sales situations, even legitimate ones, are more likely to be victimized by fraud.
Source: Doug Shadel, Outsmarting the Scam Artists, (2013)
These simple steps, many of which are free, help prevent a wide array of scams by reducing the number of solicited marketing offers directed consumers:
Screen all incoming calls. Get a non-published number and install an answering machine with a large caller ID display. Pick up only if you personally know the caller. Otherwise, let the call roll to the answering machine. Teach everyone in your household to do the same.
Block unwanted telemarketing calls. Consumer Reports Magazine has reviewed a number of devices and free services that block telemarketers and automated robocalls. Click here for a list of these reviews. NoMoRobo is a free interception service that blocks "robo" or computer-generated calls. This service is available to customers with VoIP service or through phone providers such as Comcast and Verizon. Go to www.nomorobo.com to find out whether your service provider supports it.
Opt-out of pre-approved credit offers. Enroll in the national credit bureau's OptOut program. Call 888-567-8688 or go online to www.optoutprescreen.com
Reduce other unsolicited marketing offers. The Federal Trade Commission's website has additional tips for reducing unwanted marketing offers of all types directed to your household. Visit the FTC at www.consumer.ftc.gov/articles/0262-stopping-unsolicited-mail-phone-calls-and-email. In addition, never enter free prize sweepstakes drawings; never attend free lunch seminars; and never respond to any solicitation you receive over the Internet.
Once you've taken steps to keep scammers away from your household, consider how you can protect older loved ones and friends, and start a dialog with them today. Initially, they might be concerned by your heightened interest in their personal affairs, Take the time to explain to them why you are concerned and what steps you would like to take, with their permission, to protect their finances. With your loved one's consent, you may be able to identify signs they've responded to a phony offer already and are being repeatedly taken advantage of by a stranger, caregiver, or someone in the neighborhood.
Visit older family members frequently and, if possible, unannounced. Does the phone ring off the hook? Are there lots of inexpensive "gifts" laying about? Do you witness secretive behavior or dramatic mood swings? Evidence of financial trouble such as no food in the house, a sudden inability to pay bills, and payments to unfamiliar persons or companies? Are there pre-paid debit cards, sweepstakes entry forms littered throughout the house? How about evidence of frequent withdrawals for cash? Are there receipts for overnight package delivery or wire transfer services? If you spot any of these signs, don't jump to conclusions. Investigate further. But it you sense trouble, start by building trust. Make it clear you are offering help, not being judgmental.
Next, sort the situation out. Provide a copy of Money Smart for Older Adults: A Guide to Preventing Financial Exploitation. This guide is co-branded by the FDIC and the Consumer Protection Financial Bureau. It is designed to help seniors guard against identity theft and other forms of fraud. Click here for a free downloadable copy.
Money Smart is a good tool for initiating discussions with older family members and friends. It is comprehensive, nonjudgmental, and branded with official logos. It explains how numerous people have experienced the same thing — a message that removes a lot of defensiveness or embarrassment that keeps older adults from opening up. It describes scam techniques that victims may recognize from their own experiences, and encourages them to share. It also represents a vehicle for getting the victim to speak with professionals who are trained to counsel and assist elderly victims, especially victims who've been targeted more than once in the past.
Watch Glenn's story, as he discusses his aunt and uncle's victimization and the need for earlier intervention.
Here are some other suggestions for protecting your loved one from financial exploitation:
Family members and friends need to remember: aiding an older loved one, especially one that has been victimized, will be a sustained and long-term project. The scammers won’t let go of a victim without a fight. You might need to incorporate other people and other techniques into your efforts, as well.
The onset of dementia and other age-related
impairments to the brain, play a significant role in
financial exploitation. Helping a vulnerable adult recover
from being scammed may require the involvement of medical
professionals, financial advisors, law enforcement and even
Seek help from your loved one's doctors. Physicians may be able to tell you about the warning signs of dementia and age-related financial vulnerability. Doctors may also know what social services and other professionals are locally available to family members and caregivers.
Elder advocates urge family members to enlist the help of an attorney who specializes in elder law, preferably before the onset of physical or cognitive decline. These professionals may be able to advise what options are available in your loved one's state. For example, most university law schools have an elder law unit that provides free legal advice to seniors. The American Bar Association also offers pro bono work for seniors.
When speaking with an elder law attorney, discuss options for best protecting your loved one with the least infringement on personal independence. If an older adult still has the capacity to make decisions, create a Power of Attorney for finances. It is an inexpensive and private way to prepare for the possibility of diminished decision-making. It allows an individual to designate someone they trust to handle their financial decisions if they no longer can. Visit the Consumer Financial Protection Bureau’s website for suggestions.
Use the Eldercare Locator, a service of the U.S. Administration on Aging, to help identify resources for older persons in every community throughout the United States. Visit www.eldercare.gov or call 800-677-1116. Also, go to the Department of Justice’s “Locator” available on its Elder Justice Website to find legal and other resources near you.
As we age, there might come a time when we need help managing our money. By the time we're in our 80s, one in three will have Alzheimer's, or other form of dementia. Dementia is a disease and not everyone will experience it, although many will if they live long enough. But a growing body of literature on the aging brain indicates that most —if not all —people 65 and over will experience a decline in decision-making. This decline will affect an individual's ability to make sound decisions about their money and will hamper an older adult's ability to determine whether a transaction or activity is safe, or is full of risks. Declining decision-making makes older adults especially susceptible to scammers and other types of financial exploitation. Scams that were easy to spot at age 50 are more difficult to detect in our 70s and 80s. No one knows exactly why this decline affects some adults sooner than others. What is known, however, is that the experience is real. In the words of one medical researcher, the effects can be 'profound.' Click here to learn more about the shifts in decision making that commonly occur in older adults.
Source: Michael S. Finke, et al., Texas Tech U. Old Age and the Decline in Financial Literacy. (2011). Ifat Levy et al, Yale University, Like cognitive function, decision making across the life span shows profound age-related changes. Proceedings for the National Academies of Science (2013)I
By planning ahead, older adults can appoint a trusted relative or friend to help manage their finances in the event of injury, illness or other impairment. The time to act is before physical health declines, or diminished capacity creates challenges to decision-making. If an older adult doesn't appoint a Power of Attorney before decision-making declines, family members or friends might have to go to court to have a guardian appointed, and that process can be lengthy, expensive and very public.Lynnette Khalfani-Cox is a personal finance expert, and author of numerous books on family financial planning. She advises family members to find the right time for having these conversations with loved ones and to avoid appearing critical. Limit the discussion to one or two items at a time, and sustain the conversation over time. Read her "5 Tips for Discussing Money Matters With Family" here.
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