How to Protect Against Senior Fraud?
Elder Law attorneys often encounter clients who have depleted their assets through fraudulent scams.
The recently published “Elder Fraud Wars: Case Histories from an Enforcement Attorney” (Exposit, 2020) shares first-hand experiences from author David Neil Kirkman’s career working with the Consumer Protection Division of the North Carolina Attorney General’s Office.
Although this book is written for professionals, it offers valuable information for anyone interested in the high volume of scamming that negatively affects so many seniors.
Why are the elderly at extraordinary risk of being scammed? Because that’s where the money is. According to the most recent Survey of Consumer Finances from the Federal Reserve Board (2017) median wealth in the U.S. for those aged 35-44 is $60,000 while those in the 65+ age category the median wealth figure is above $225,000.
Other key vulnerabilities include 100% equity in their home, physical or emotional isolation, impairments such as immobility, limited eyesight or hearing, cognitive decline, and loneliness. Elderly individuals may also have the desire to regain decision-making power. Any combination of these factors presents an opportunity for professional scammers to present themselves and take advantage.
Throughout the book Kirkman provides engaging stories from his work on elder fraud cases. Some of the most widespread scamming practices include:
Home repairs: A “contractor” stops by a house and tells the elderly resident that they can see some rot around their roof. The contractor then investigates and finds more and more “dangerous” issues that need to be “resolved immediately.” By placing pressure on the elderly homeowner, the contractor returns again and again and does nominal work to resolve issues that do not actually exist.
Driveway paving: A group of workers stop by a home, claiming to have leftover asphalt, and offer to pave the driveway at cost. The “leader” of the workers ingratiates himself with the homeowner and the asphalt is immediately spread with little to no prep work. The elderly homeowner is then told that the cost is five to ten thousand dollars or more. If the homeowner objects, the crew becomes belligerent and applies emotional pressure.
Lotteries: The elderly person receives a call, letter, or email that states that they have won a significant lottery prize. All they need to do is send a few hundred dollars (or more) to pay for the transaction costs of sending them the winnings. This can be repeated and escalate into bigger and bigger phony prizes.
Telephone scams: One common scam is a phone call from a supposed IRS agent that scares the elderly person by saying that they owe back taxes and must immediately send thousands of dollars or the local sheriff will be called. Another frequent scam is a call from someone claiming to be a grandchild that is in jail for a driving violation or on a trip in a foreign country and needs emergency cash. In both of these situations, the scammer convinces the victim to purchase a cash or gift card and then read the account information over the phone.
The extent of the problem is significant. Kirkman’s Elder Fraud Project worked with as many as 2,000 victims a year in North Carolina although the actual report rate is estimated to be only 2%. Each victim had been scammed on average four times already, with individual losses ranging from the thousands to the hundreds of thousands.
It is helpful for all of us to understand how elder fraud occurs and the complicated reasons why it is often successful. “Elder Fraud Wars” also reminds us how upfront and ongoing estate planning and financial management can aid in the protection of those most vulnerable to abuse.
And remember that the team at Hillsborough Wills & Trusts has the expertise to help you Build Your Circle of Security through strong legal documents and good counsel. We are here to help you succeed! Contact us at: https://hillsboroughwills.com/contact
Additional Information:
https://books.google.com/books/about/Elder_Fraud_Wars.html?id=vjnlDwAAQBAJ