Last week, the Investor Protection Trust (IPT) released the results of a survey regarding the growing problem of elder financial abuse. Available online at http://www.investorprotection.org, the new IPT survey was conducted during the first 10 days of June 2012. Those surveyed include state securities regulators (76), financial planners (77 ), medical professionals (24), caregiver/social workers (93), APS workers (172), educators (56) and others (264, including other law enforcement officials and legal experts).
The vast majority of these experts (96 percent) say the problem of elderly investment fraud/financial exploitation in the U.S. is “very serious” (70 percent) or “somewhat serious (26 percent).
Other Key Findings
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According to the experts, the top three reasons why elderly investment frauds go unreported are: “shame on the part of victims” (86 percent); “the ability of con artists to string victims along until it is too late” (80 percent); and “failure of adult children to spot the problem and intervene” (70 percent).
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96 percent of respondents say that “potential problems with mental comprehension make seniors more vulnerable” to financial swindles “very often” or “quite often.”
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80 percent of respondents say that their experience is “very” or “somewhat” consistent with “a 2008 study (that) found that about 35 percent of the 25 million people over age 71 in the U.S. either have mild cognitive impairment or Alzheimer’s disease, making them especially vulnerable to financial exploitation, including investment fraud.
While elder fraud is terrible in all its forms, the sad fact is that 85-90% of all elder financial abuse is perpetrated by a family member. Family members are already in a trusted position and will sometimes use this position to take advantage of the vulnerability of an elderly relative.
It is critical that all family members as well as the medical and professional communities work together to protect the dignity and resources of this great generation.
David Russell is Senior Vice President of Pinnacle Trust, and author of the book, What You Need to Know: The Adult Child’s Guide to Being a Financial Caregiver. He frequently speaks to public and professional organizations on the topic of elder financial abuse. To book him for your organization, call 601-957-0323.
