Learn about the steps involved for victims, loved ones, and financial professionals
Elder financial fraud is an epidemic in this country that not a lot of people know about and even fewer talk about. And “epidemic” isn’t an exaggeration; every year, billions of dollars are scammed and stolen from seniors by trusted individuals, including financial advisors, caregivers, and even their own family members. And what’s worse is that a large percentage of these cases aren’t reported.
Why are older people more susceptible to financial abuse?
Scammers target vulnerable people, and often older people fall into this category. Some recent studies have shed some light on why this is. In an MIT study, when participants were asked if they felt that most people can be trusted, baby boomers were the ones who gave the most yes answers.
In a UCLA study related to trust, it was discovered that seniors had less activity in their anterior insula, which is the part of the brain associated with gut feelings.
Additional research suggests that decision-making regarding finances declines as people get older, yet their confidence in their ability to make good decisions does not. Anger and excitement also play roles when it comes to making financial decisions.
What victims or loved ones should do if they suspect financial abuse
Contact the authorities
The first step is to talk to authorities. This includes contacting the local police station or sheriff’s office to file an official report and getting in touch with Adult Protective Services. If you are the victim or acting on his or her behalf, be prepared to offer as much information as possible. You will need to supply names, dates, and other relevant details.
File complaints with financial agencies
If the circumstances of the abuse involve investments or other things related to the securities industry, you should file a complaint with the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).
Speak to an elder financial fraud attorney
An experienced elder financial fraud attorney can offer valuable information about your legal rights. In many circumstances, the best way to recover lost money is through arbitration, litigation, or other legal means, and a lawyer can help guide you through the process.
Seek additional help
For more assistance, there are numerous resources available that can be helpful. AARP has a hotline people can call to report fraud or get information on recognizing scams. The U.S. Department of Justice offers a roadmap that may be useful for victims or their caregivers.
What financial professionals need to know about reporting elder financial fraud
Although laws vary around the country, in many states, people in certain professions – including fiduciaries – are legally obligated to report elder financial abuse if they suspect it. If they don’t make a report, they could face a fine or even jail time. Local law enforcement or Adult Protective Services should be contacted as soon as possible.
In addition, it is important for financial professionals to take a proactive approach to financial fraud. Looking out for the best interests of their clients, they should be aware of possible red flags – including repeated cash withdrawals and the sudden appearance of somebody new who seems to be making financial decisions for a client.
Advisors and firms also need to stay current on all of the latest safeguards that agencies like FINRA and the SEC put in place to protect older investors.
Whether you are a victim or a concerned third party, anyone who suspects elder financial fraud needs to take action. Acting quickly is the best way to reclaim lost money and prevent the offender from victimizing someone else. For a consultation on a situation that may constitute elder financial fraud, contact the Silver Law Group.