ELDER FINANCIAL ABUSE

I previously wrote about the financial exploitation of the elderly but I just wanted to review some things that are key to recognizing the signs.  I also wanted to mention prevention tips.

What is financial exploitation of the elderly or elder financial abuse? Simply put, it is when a person takes money or property from an elderly person for their own financial benefit. In the state of Florida, its law (FSS 825.103) “states that when someone maliciously takes the property of an “elderly person,” they are committing exploitation”.

It is estimated that five million elders may be the victims of financial exploitation annually. The perpetrators vary. Most of these incidents are by family members who are in daily contact with the victim and estranged family members who suddenly are interested in the victim’s well-being.

According to http://www.ncea.aoa.gov, “older individuals may be targeted merely because they possess more assets, such as savings, annuities and retirement accounts, stocks and bonds, insurance policies, and property than younger people. Those with cognitive impairments, mental health conditions, or physical disabilities may be dependent upon others (family members, friends, formal and informal caregivers, or court appointed representatives) for assistance in making financial decisions or carrying out daily transactions, and therefore may be even more vulnerable to theft, exploitation or undue influence.”

Here are some examples of elder financial exploitation:

  • Preventing the elder from having access to his/her money and bank accounts
  • Forging the elder’s signature on checks and other documents
  • Adding an additional name to the elder’s bank account and withdrawing funds without permission of the elder
  • theft of money or property
  • Theft of ATM cards or credit cards
  • Deceiving or forcing an elder to sign a financial document, such as a will, a loan application or some other documents Selling an elder unnecessary or overpriced goods or services
  • Stealing an elder’s identity or financial data in order to steal the elder’s money or property
  • Deceiving an elder to invest in an overpriced scam
  • Deceiving an elder into borrowing money on a home with terms that guarantee he or she will default and lose equity
  • Improperly using an elder’s power of attorney or conservatorship.
  • Cashing checks without permission
  • There are also other signs as well such as bank statements and canceled checks no longer come to the elder’s home, unpaid bills, notices to discontinue utilities or eviction notices, unusual activity in the older person’s bank accounts including large, unexplained withdrawals, frequent transfers between accounts, or ATM withdrawals, absence of proof about financial arrangements and outrageous explanations given about the elderly person’s finances by the caregiver.

It is important to remember that whenever there is an economic downturn, seniors are always the first to be targeted.  Here are some tips to protect the seniors’ assets:

  • Stay connected. People who live alone and in isolation are most likely to be victims Put your financial affairs in order. Financial good housekeeping will make you less vulnerable
  • Beware of needy people. People with histories of substance abuse are most likely to be abusers
  • Choose caregivers and other service people carefully. Don’t allow people into your house who aren’t trustworthy
  • Keep valuables in a safe place. If there’s nothing worth stealing in your home, you’re less likely to become a victim.
  • Sharing the same DNA does not guarantee that relatives will not swindle one out of money or real estate.
  • Make sure that your power of attorney documents are on file with the bank and/or investment company
  • When receiving a phone call from someone you are not familiar with, exercise caution.

There is another issue in regards to elder abuse that is seldom discussed.  Granny snatching is when a senior is moved from one jurisdiction to another jurisdiction with laxer laws. Granny snatching laws vary drastically from state to state. This is another means to isolate the senior from loved ones to be further exploited. I will go into further detail next week about what some states are doing to protect seniors from this heinous act.

As always, report any incidents of elder abuse to the local authorities.  The website for the National Center for Elder Abuse is http://www.ncea.aoa.gov and the National Committee for the Prevention of Elder Abuse is preventelderabuse.org.

Please feel free to leave your comments and questions.

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THE DANGERS FACED BY THE ELDERLY WHEN SELECTING A POWER OF ATTORNEY

In the Bible, it mentions that the aging King David was in jeopardy of losing his kingdom to his son, Absalom.  Divine intervention saved King David’s kingdom and his son Absalom later died in an accident.  I thought about how powerless David must have felt. In fact, the Bible said that David felt humiliated. Remember, this was the same David, who in his youth, slayed the giant Goliath with his slingshot.

That feeling must be true for many of our elderly who are not their former selves and hoping that their loved ones will treat them with love and not taking advantage of them. This is why choosing someone to serve as your power of attorney is something that requires careful consideration and not sentimentality.  Many seniors are victims because of making decisions based on emotions rather than sheer logic and common sense.

There many cases of power of attorney scams. In Ohio, an elderly retired gentleman, lived alone with no immediate family. One day he suffered an injury that required his hospitalization. He knew he would be away from home for weeks and was worried about paying his bills. His nephew arrived at the hospital with flowers and an offer to help.  The next day the nephew showed up with a power of attorney, which his uncle signed. By the time the elderly man had returned home, his nephew had robbed him blind, using the power of attorney to close bank and investment accounts. Assuring his uncle he was merely keeping the money safe, the nephew had instead transferred the money to an accomplice, who in turn invested it in a mobile home development in South Carolina. When the uncle sued, the nephew maintained that his uncle had gifted him the money out of love and affection, and the power of attorney was evidence of the trust his uncle placed in him.

Another case occurred in Battle Creek, Michigan. A 92-year-old woman in Battle Creek says a neighbor she trusted has taken everything from her. Clint Stout was charged with embezzlement, but a Calhoun County judge says the man hasn’t done anything criminal. Clint Stout is charged with embezzlement over $20,000. This, by all accounts, started in March 2010 just after the death of Elizabeth Armour’s husband. The Stouts were given power of attorney and they apparently took advantage of the power in short order. Armour was moved out of her home the day after her husband’s funeral, and into a series of retirement homes. A police investigation turned up tens of thousands of dollars of questionable transactions and withdrawals from Armour’s account–including $3,600 marked as “Cash for Elizabeth,” which Armour told detectives she never received. Additionally, $17,000 that Clint Stout placed into a personal bank account, even though the power of attorney clearly states Armour’s funds “must never be mixed with your own.” When asked about the withdrawals, the detective says Stout “could not provide me with any reasonable explanation,” and said he wished to speak with an attorney. This is the part of the story is tragic. The judge who heard the case wrote in his finding that “the court is not persuaded the actions of the defendant are criminal. Unless prosecution can show the power of attorney was obtained through some fraud, deceit or misrepresentation.” The judge cited one line in the power of attorney which reads “under no circumstances should my agents actions give rise to a criminal charge,

When you designate someone as your agent, the agent can handle financial and legal matters on your behalf in the event that you become physically or mentally incapacitated. This is why you have choose carefully because your agent will able handling many financial responsibilities.

If your spouse or partner is in very good health, you can designate him/her.  When choosing a close relative, make sure that this person is responsible with his/her financial matters.

It is important that if you choose a close relative who is living with you and you are living with another relative, please make sure you file your documents with your bank and/or broker.  Having a power of attorney is not useful if the bank or broker does not  know about.

You should also be aware that you have the right to revoke your document anytime you choose.  You should can also limit the responsibilities of your agent if you do not feel comfortable about some matters.

You should definitely seek an attorney who specializes is elder and estate law matters.  if you cannot find an attorney, contact the local bar association in your area and inquire about speaking to an elder and estate law attorney.

As always, please report any incidents of elder abuse to the local authorities.  The website for the National Center on Elder Abuse is http://www.ncea.aoa.gov.

Please feel free to leave your comments and questions.

HOW PAYDAY LOANS LENDERS ARE PREYING ON THE ELDERLY

My sister, who works as a supervisor in a public library, recently told me that several older adults came into her branch having major questions about payday loans. One woman said that she applied for a payday loan and was denied. She later went on to say the company is deducting money from her checking account despite not receiving a loan.

Recent studies have shown that one out of four payday borrowers are Social Security recipients. Don Baylor Jr., senior policy analyst at the Center for Public Policy Priorities, which advocates for the interests of low and moderate-income Texans said that many seniors are using payday loans as a means to bail out family members. This is because payday lenders know that Social Security recipients have a guaranteed monthly income. Also, payday lenders recognize that older homeowners tend to have higher home equity. Targeting the elderly allows the lenders to easily drain the equity from a borrower’s home by including excessive fees and lending under unfair terms. They will encourage the borrower to refinance their loans which benefits the lender, not the borrower.

Alabama seniors have been hit hard by payday lenders.  One senior, Mr. Bevels, who is illiterate, had the clerk from Small Loans, owned by Money Tree, Inc. help him complete the application for a payday loan. His check was being deposited into a out-of-state bank. He was given a $200.00 loan. Small Loans then started taking his benefits check and paid him a small allowance out of it, deducting the money to repay the loan. The company took thousands of dollars from him over the years. Nearly four years, Mr. Bevels rode his motorized mobility scooter to Small Loans to pick up his allowance, which was sometimes as little as $180 a month. He eventually became homeless after his trailer burnt down.

This story has a happy ending. A county social worker arranged for Mr. Bevels to move to public housing and got his Social Security benefits redirected to a local bank. When Small Loans sued Mr. Bevels for repayment in small-claims court in Talladega County, Ala., a legal-aid attorney headed to court. The judge threw out the case when the lender failed to appear with documentation for the loan.

There are many tales of seniors and disabled Social Security recipients going to Small Loans to pick up their allowances from their checks. Many researchers found that because many recipients did not initially have traditional bank accounts, this form of direct deposit appeared to be a viable option.

Small Loans is not the only company preying on the elderly and disabled. Check ‘n Go, held by Ohio-based CNG Holdings Inc., which has more than 1,300 stores nationwide, had the manager of one on its Washington, DC location recruiting elderly customers. This particular location was across the street from a retirement complex. The manager often ate his lunch on nearby benches to strike up conversations with the complex’s residents. He later quit because he did not want to exploit the elderly.

Payday lending is an increasing growing business and as a result, many consumers, young and old, are sinking into deeper debt.  Banking regulators must find a way to regulate these lenders and protect the consumers, especially the elderly and disabled.

As always, I encourage you to report any concerns regarding elder abuse to the proper authorities.  I have attached the National Center on Elder Abuse’s website below.  Please feel free to leave your comments or questions.

http://www.ncea.aoa.gov/

THE CORRELATION BETWEEN THE ECONOMY AND ELDER ABUSE

I mentioned in my previous blog two weeks ago about the home repairs scams that are now so prevalent. These scammers comb neighborhoods to survey the number of older adults residing in the area.

My mother recently had the sewer drain pipe burst on her property. She was frantic and had a plumber to come out to give her an estimate. The plumber, seeing that she was apparently frantic, started to convince her that a $3,300.00 job was actually $10,000.00. He then told her that if she did not have it repaired immediately, the borough would turn off her water and she would have to vacate the premises ASAP. She, becoming more frantic, agreed to it.

I just happened to call her and told her that the estimate seemed too high and that I would call another plumber to get another estimate. The second plumber came out and when I mentioned to him about the previous estimate, he was taken aback. He said it was a $3,300.00 job and that the previous plumber took advantage of my mother’s age and fear. He mentioned that the previous plumber was motivated to get the largest commission possible by “jacking up” the estimate.

That final statement really drove the point home how older adults are exploited, especially during an economic downturn. There is definitely a correlation between economic recessions and elder abuse.

This has also had an impact on the type of treatment older adults receive from banks and investment companies. The most prevalent act of elder abuse in the financial industry that receives minimal attention, according to Jacob Zamansky of Forbes Magazine, is the financial exploitation perpetrated by stockbrokers. There are examples of stockbrokers taking advantage of older adults as in the case of stockbrokers Thomas B. Cooper and Peter L. Boorn at Beverly Hills-based StockCross Financial Services Inc. They allegedly scammed 95-year-old David Wolfson of nearly all his assets and put his house at risk after recommending unsuitable and risky investments. The brokers dropped Wolfson as a client once they drained him of his cash. An arbitration panel awarded the elderly man triple damages, totaling $1.6 million.

Another similar example involves stockbroker Sergio M. Del Toro, who has been banned from the securities industry for defrauding a 90-year-old Minnesota nursing home resident of $511,000. Mr. Del Toro recommended that the elderly man put his entire net worth into the stock of a firm called 3rd Dimension, for which there was no market or publicly quoted pricing. Mr. Del Toro’s alleged motivation: a 15% commission, equal to about $76,600.

Zamansky also wrote that many elderly clients were convinced by scheming stockbrokers to sell highly conservative investments, such as bank certificates of deposit, to purchase these supposedly safe, liquid securities. In 2008, many elderly investors were told that Fannie and Freddie were government backed so their preferred securities were safe.  Later it was revealed that Fannie and Freddie stock was not government backed and the preferred shares were rendered nearly worthless as the market crashed.

Unfortunately, many incidents go without investigation. According to an AARP report, it findings showed that since each state has its own elder abuse laws, definitions of abuse and prosecution for such acts vary across the country. The report also revealed that state adult protective service programs, which handle elder abuse, are severely underfunded, a problem exacerbated by recession-era cuts in state budgets.

As always, I encourage you to report any concerns regarding elder abuse to the proper authorities.  I have attached the National Center on Elder Abuse’s website below.  Please feel free to leave your comments or questions.

http://www.ncea.aoa.gov/