Christopher HopkinsThere is undoubtedly a very hot place awaiting the miscreants who swindle and defraud seniors. And yet, the temporal rewards often appear to outweigh the empyreal costs, as financial crimes against the elderly continue to increase.
Despite significant progress in raising awareness of the problem, incidences of such crimes continue to increase according to a recent survey of state securities regulators. Last month’s report from the North American Securities Administrators Association concludes that the problem is growing, and that financial professionals including advisers and broker-dealers are not doing enough to stem the tide. As more boomers glide into retirement, the problem worsens.
Attempting to assess the magnitude of this scourge, True Link Financial and the Stanford Center on Longevity conducted a comprehensive study of elder financial abuse in 2015. The results were startling: $36 billion in annual losses, far beyond previously accepted estimates. Nearly half that amount is attributable to nominally legal but unethical sales, including quack health products, hidden fees and charges, and misleading or inappropriate financial advice.
That is bad enough, but there’s more. Nearly $13 billion was appropriated from seniors via direct criminal fraud, including cons and identity theft. And astonishingly, the study found over $6 billion in theft perpetrated by family members and caregivers. There is perhaps no destination hot enough to properly avenge the villainy of these cretins.
While it is certainly true that diminished cognitive ability makes victimization easier, financial fraud and abuse is hardly limited to that segment of the elder population. The American Journal of Public Health reports that 6 percent of “cognitively intact” seniors fall victim each year to scams, fraud or financial abuse. In all, it is estimated that one in five adults over age 65 have fallen victim to some type of financial scam or swindle.