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Is Financial Abuse a Health Issue?

Yes, according to the U.S. Centers for Disease Control and Prevention (CDC), which last year identified senior financial abuse as a public health hazard.  Defined as fraud, breach of personal trust, poor investment advice, or improper use of power of attorney, the CDC’s effort highlights the fact that an increasing portion of total American assets are being held by elderly people, and they are most vulnerable to being exploited.

The threat to seniors cannot be understated.  Decreased cognitive capacity and social isolation coupled with the rapid development of technology make older people especially vulnerable to being scammed. I saw this first hand with an 82-year old client in my previous firm.   After the death of her second husband, to whom she had been extremely attached, she withdrew and began to drink.  Her response to a letter imploring her to help poor children in Africa led to a slew of phone calls manned by people who, according to her, “were so nice and caring.”  Ultimately she ended up transferring thousands of dollars to locations in the Caribbean before we were able to work with her adult children to implement some controls around her spending.

It’s no surprise that the scammers are targeting the elderly.  Politico.com reports that the median wealth of families headed by someone at least 62 years of age rose 40 percent from 1989 to 2013, while the median wealth of families in the age 40 – 61 bracket dropped 31 percent during the same period.  They also reported that seniors in New York State lost as much as $1.5 billion over one 12 month period from misappropriation of funds, and as many as 1 in 5 seniors had admitted having been victims of exploitation in a national survey by the Investor Protection Trust in 2016.

I have written many posts and given many seminars on the threat that financial scammers pose to seniors.  But this is the first time that it has been recognized as a national health problem.  Dr. Robert Roush, head of the Texas Consortium of Geriatrics Education Center, says that when people lose so much money that they have to choose between health care costs and routine living expenses, it is a clinical issue. In 2009 he started training medical professionals in Texas to screen for financial abuse in older patients.

Unfortunately, at the federal level, the current administration’s push to ease regulations on the financial services industry and loosen consumer protections, not to mention threatening potential cuts to the CDC’s budget, could negatively and disproportionately affect older Americans.  The good news is that many states, perceiving the lack of progress in Washington and recognizing the seriousness of the threat, are starting to initiate their own regulations.

What can you do?  Stay close to your elderly loved ones and watch for the warning signs of potential abuse.  Notify your local county’s Adult Protective Services if you believe there’s a problem.  Here’s one website I found with some helpful indicators: http://www.napsa-now.org/get-informed/what-is-financial-exploitation/.  As communication media expands, the likelihood that you or someone you know becomes a victim will only increase.



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