In a recent MoneyWatch article, Steve Vernon writes that investment fraud and financial abuse targeting the elderly is a major problem today, according to a recent survey by the Investor Protection Trust and Investor Protection Institute. The top three ways in which seniors are exploited are:
Theft of diversion of funds or property by caregivers
Financial scams perpetrated by strangers
Theft or diversion of funds or property by family members
The IPT and IPI jointly surveyed a total of 756 experts with such cases, including state securities regulators, financial planners, health care professionals, social workers, adult protective service employees, law enforcement officers, elder-law attorneys and academics. The found the best way to prevent financial abuse — educational campaigns and counseling tailored to the financial needs of older Americans and their families or caregivers.
The MoneyWatch article asks, “How serious is elder abuse?” According to a bulletin from the National Adult Protective Services Association, 1 out of 9 U.S. seniors reported being abused, neglected or exploited in the past 12 months. Victims are three times more likely to die than those not subjected to abuse and four times more likely to go into a nursing home. They also use healthcare services at a higher rate than the general population.
So what can you do both for your parents now and for yourself down the road? Here are some suggestions:
Raise awareness of these issues with your parent(s) by finding one of the programs by experts as effective for prevention. Make it easy for your parents to attend. Make it an opportunity to do something social with your parents.
Put your parents’ finances on auto-pilot, with automatic deposit of Social Security, pension, annuity and investment income into checking accounts. Put as many of their bills as possible electronically. Find a financially savvy, “guardian angel” who will frequently visit or check in with your parents and will supervise any substantial financial transaction. This person will often be a family member, although this step can be a double-edged sword, given the prevalence of abuse by family members cited by the survey. If you don’t have any trustworthy family members living close by, see if you can find a trustworthy friend who lives close by.
If your parent(s) worked for a large, reputable company and have their savings with a 401(k) plan — consider keeping it there. Often you’ll get the best investment deals by keeping your money with your employer’s plan. These plans are strictly regulated, and employers operate these plan for the exclusive benefit of their employees.
A red flag goes up when a senior is isolated and their need for companionship makes them vulnerable to exploitation. This is one important reason why a careful choice of living quarters needs special attention. Arrange for daily contact with people who care about you and your parents/seniors.
Securities Lawyer, Lars K. Soreide, of Soreide Law Group, PLLC, represents clients nationwide in arbitrations before FINRA. Call to speak to an attorney regarding your investment losses. For a free consultation on how to potentially recover those losses call: 888-760-6552, or you may visit our website at: https://www.securitieslawyer.com.