Senior Financial Exploitation

By April 18, 2008Uncategorized

For over a decade, the Elder Law Attorneys and staff at JacksonWhite have helped hundreds of individuals and families navigate the maze of long-term health care, assisting them in obtaining the benefits they need to pay for the care they deserve. Unfortunately, over the years of working with Arizona’s senior population, we have noticed that senior citizens are increasingly the prime targets for financial exploitation and fraud. During this time of recession and tax deadlines, it is very important to keep in mind how seniors are exploited financially and what your options are if you or someone you know falls victim to this crime.

The Most Common Types of Fraud
One of the most common types of fraud we see at JacksonWhite is investment fraud where seniors are sold investment products they don’t fully understand. These investments often prove harmful when applying for public benefits such as ALTCS and VA Aid & Attendance. Con-artists and exploiters aren’t the only individuals soliciting this type of fraud. Commercial banks, credit unions, and brokerage firms, who also sell these products, may have good intentions when selling seniors their investment options, but also may be uneducated on the restraints these products can place on individuals who are planning for long-term health care. Families and individuals need to be aware of the risk of purchasing investment products even from well-known financial institutions. It is vital that consumers consult with someone like an attorney who understands the effects these products have in the long-term before purchasing any type of investment product.

Recently, the National Association of Securities Dealers (NASD) released a warning to the public on Equity-Indexed Annuities (EIAs), a product that, because of its structure, can be dangerous to anyone, especially unassuming senior citizens. Having represented clients in matters involving EIAs, our attorneys are realizing that the elderly are targets for salespeople who have received limited training regarding these types of products, but who are enticed by abnormally large commissions. Equity-Indexed Annuities are just one example of the many types of these products that can be harmful to individuals and families when getting their legal and financial affairs in order.

Other Common Types of Fraud

  • Health Insurance Fraud, including Medical Equipment Fraud, Rolling Lab Schemes (fake tests billed to insurance companies or Medicare), and other types of Medicare Fraud.
  • Counterfeit Prescription Drug
  • Funeral and Cemetery Fraud
  • Fraudulent “Anti-Aging” Products
  • Telemarketing Fraud
  • Internet Fraud

Why Should Senior Citizens and the Health Care Community be Concerned?
The reasons senior citizens are prime targets for financial exploitation are clear. First, older citizens are most likely to have a “nest egg,” own their home, and/or have excellent credit, all of which the exploiters will try take advantage of.

Also, individuals who grew up in the 1930s, 1940s, and 1950s, were generally raised to be polite and trusting. Two very important and positive personality traits, except when it comes to dealing with pushy agents or con-artists. The con-man will exploit these traits knowing that it is difficult or impossible for these individuals to say “no” or simply hang up the phone.

Seniors are also less likely to report fraud because they don’t know who to report it to, are too ashamed at having been scammed, or do not know they have been scammed. In some cases, an elderly victim may not report the crime because he or she is concerned that relatives may come to the conclusion that the victim no longer has the mental capacity to take care of his or her own financial affairs. The victims’ realization that they have been victimized may take weeks or, more likely, months after the exploitation takes place. This extended time frame will test the memory of almost anyone. If a crime is reported, seniors often make poor witnesses and will not be able to supply enough detailed information to investigate the claim.

Where Can I Turn for More Information?
It’s important to do your research before purchasing anything dealing with investments or your financial affairs. JacksonWhite is able to provide education and legal assistance to seniors and others who may have fallen into a financial trap or who feel like they are the victim of an exploitation crime. Please feel free to contact us if you have any questions regarding EIAs, fraud, senior exploitation, and any other types of annuities or insurance products

Protecting Yourself From Financial Exploitation
Many consider financial exploitation to be a “silent crime.” Often, victims may be too ashamed or embarrassed to report what has happened. Also, there may be no external signs that exploitation and fraud is occurring. Other times, the victims are those who are in the early stages of a dementia illness, such as Alzheimer’s disease, who may not realize what has happened.

But the cases of financial exploitation can be reduced if you know how to protect yourself and the older adults you know. Sometimes the signs of financial exploitation are subtle and other times they are blatantly obvious. Here are a few scenarios that should trigger red flags:

  • Numerous cash withdrawals from an older adult’s checking account in a short period of time, especially if inconsistent with previous spending habits
  • Signatures on checks, wills, powers of attorney or other documents that look forged, unusual or suspicious
  • Several checks that are used out of numerical order
  • Reports by the older adult that funds are missing from his or her account
  • Someone encouraging, pressuring, or coercing the older adult into withdrawing large sums of cash from checking or savings accounts
  • An older adult applying for several new credit cards
  • An unexpected increase in ATM or credit card usage by an older adult
  • An older adult failing to understand recently completed financial transactions
  • An older adult making unusual changes to bank accounts
  • Having credit card statement sent to someone other than the older adult who is named on the account
  • Unexpected or unexplained changes by an older adult in account beneficiaries, property titles, deeds or other ownership documents
  • An older adult refinancing a mortgage
  • Abrupt and unexpected changes in a will, trust, power of attorney, or other legal document
  • An older adult who is unexpectedly and uncharacteristically unkempt, forgetful, disoriented
  • Or an older adult who is unexpectedly not meeting their financial obligations such as food, utilities, rent, or mortgage payments