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.