As the population grows older, more senior citizens are becoming the targets of a variety of scams. In fact, the National Council on Aging has declared elder fraud to be the "Crime of the 21st Century."
What is Elder Fraud?
While seniors account for only 12 percent of the population, they are the victims of one-third of a wide range of scams that have come to be classified as elder fraud. While seniors can become the target of predatory home improvement contractors, and telemarketer abuse, elder fraud usually involves financial exploitation. This type of abuse often comes at the hands of unscrupulous financial advisors who churn investment accounts. Even family members and caregivers, however, can target the elderly by looting savings accounts, checking accounts and making unauthorized credit card charges.
Why are seniors the target of scams?
Seniors are more susceptible to becoming victims of fraud because they are more likely to have savings, investments and other assets. Seniors are particularly susceptible to being lured to buy products that promise renewed health and vitality. Some seniors are also faced with the challenges posed by dementia. Furthermore, many seniors currently manage their own retirement funds. This puts them at greater risk of fraud if they become incapacitated or cognitively impaired. Unfortunately, the problem is going to get worse as more of the baby boom generation heads to retirement.
According to law enforcement authorities, seniors are also less likely to report fraud and often do not make good witnesses. The most vulnerable seniors are those who are single -- usually widows or widowers. Scammers target these individuals with scams related to investments, health insurance and prescription drugs.
How to Prevent Elder Fraud
As the percentage of the population age 65 and over increases, complaints of fraud also continue to rise. The insurance industry believes the cost of fraud is approaching $3 billion. The question now is what can be done?
As seniors continue to age, it is essential for family members to play a greater role in managing the affairs of aging parents and to monitor their transactions. Another way to minimize the risk of fraud is by having a well-designed estate plan. Assets that are placed in a properly arranged trust, and can be managed by a dependable co-trustee, are well-protected from scam artists. There is also a growing call for authorities to play a greater role by requiring financial professionals to report incidents of elder fraud.
If you or a loved one has been the victim of elder fraud, or have questions about how to protect your assets, you should consult with a qualified estate planning attorney with expertise in elder law.