Stephanie Wood, BridgeTower Media Newswires
As the world population continues to grow older, it is important to ensure that the elderly population is properly taken care of physically, emotionally and financially. According to the U.S. Census Bureau, when the global population reached 7 billion in 2012, 8%, or 562 million were age 65 and over. In 2015, the older population rose by 55 million and the proportion of the older population reached 8.5% of the total population. From 2025-2050, the older population is projected to almost double to 1.6 billion globally, while the total population will grow by just 34% over the same period. Unfortunately, as this population continues to grow, we also continue to see an increasing number of fraud cases involving those age 65 and over.
Mistreatment of the elderly
With an estimated 10,000 baby boomers turning 65 every day in the United States alone, it has become even more important to be able to protect them from neglect and abuse. The National Center on Elder Abuse (“NCEA”) defines Elder Mistreatment as intentional acts that cause harm or create a serious risk of harm to a vulnerable elder by a caregiver or other person who stands in a trust relationship to the elder.
A recent Metlife study showed that an estimated 3.2 million Americans were victimized by elder financial abuse in 2014. The National Adult Protective Services Association reported that one in nine seniors reported being abused, neglected, or exploited in the past 12 months. The rate of financial exploitation is extremely high, with one in 20 older adults indicating some form of perceived financial mistreatment occurring in the recent past.
Unfortunately, signs of elder abuse are often missed by professionals because of a lack of training on detecting abuse. The elderly may also be reluctant to report the abuse for fear of retaliation, lack of physical or cognitive ability to report, or for fear of getting the abuser in trouble.
Who is abusing
The NCEA reports that approximately 90% of abusers are family members, most often adult children, spouses, and partners. As mentioned above, because of this, the elderly are much less likely to report the abuse as they do not want to get their loved ones in trouble. Therefore, it makes recognizing the abuse that much harder.
The National Committee for the Prevention of Elder Abuse (“NCPEA”) reports that family abusers often present one or more of the following traits:
• Have substance abuse, gambling, or financial problems.
• Stand to inherit and stand justified in taking what they believe is “almost” or “rightfully” theirs.
• Fear that their older family member will get sick and use up their savings, depriving the abuser of an inheritance.
• Have had a negative relationship with the older person and feel a sense of entitlement.
• Have negative feelings toward siblings and other family members whom they want to prevent from acquiring or inheriting the older person’s assets.
It’s becoming more common to read headlines related to accusations and arrests associated with the financial exploitation of the elderly. It is important for financial advisers or other trusted individuals to be aware of potential warning signs.
Red flags
When it comes to recognizing potential financial abuse of the elderly, we should look for patterns or clusters of indicators that would suggest there is a problem. Using information published by the NCPEA, the following are some indicators that could be a sign of abuse:
• Unpaid bills, eviction notices, or notices to discontinue utilities.
• Withdrawals from bank accounts or transfers between accounts that the older person cannot explain.
• Bank statements no longer going to the elder’s home.
• Legal documents, such as power of attorney, which the older person didn’t understand at the time he or she signed them.
• Unusual activity in the older person’s bank accounts including large, unexplained withdrawals, frequent transfers between accounts, or ATM withdrawals.
• Suspicious signatures on checks or other documents.
• The elder is unaware of or does not understand financial arrangements that have been made for him or her.
How can we help?
The prevention, detection and intervention of elder abuse rely in part on the training of professionals and the public. The NCEA encourages those working with the elderly to receive training on elder abuse, neglect and financial exploitation. Their website offers links to videos, webcasts, and a list of training and conference opportunities coming up.
Because many elder abuse cases go unreported, it is imperative that if you or someone you know has been affected by abuse, that it gets reported by calling the police or the Adult Protective Services program in your area.
Duty to protect
We must become more familiar with the warning signs of elder abuse. The money older adults lose in these cases is rarely recovered, and the losses can have a significant impact on their health and ability to care for themselves.
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Stephanie Wood, CPA, CIA, CFE is a Manager with EFP Rotenberg LLP, Certified Public Accountants and Business Consultants.
