We get our fair share of calls from individuals whose parents were swindled or manipulated by financial advisors, but usually, by the time the kids get involved a lot of damage already has occurred. The children have stepped in due to some crisis: their parent has died or gone into managed care or is suffering from some very obvious physical or cognitive impairment. But because the financial exploitation often starts well before the crisis which reveals it, family members might consider becoming a bit nosier with their elders, anticipating problems and asking questions rather than reacting to a traumatic event.
That lesson is what we take away from the results of a recent survey commissioned by the non-profit group Investor Protection Trust. IPT surveyed 762 experts who deal with investment fraud and financial exploitation aimed at senior citizens. The vast majority (84 percent) of those surveyed – a group made up of securities regulators, adult protective services workers, medical professionals, law enforcement officials, and others who deal directly with at-risk seniors — agree that the problem of swindlers targeting the elderly is worsening.
Major findings of the IPT survey include the following:
- Nearly all of the respondents (99%) say that older Americans are “very vulnerable” (75%) or “somewhat vulnerable” (24%) to financial swindles.
- Nearly three out of four respondents (58%) deal with elderly victims of investment fraud or financial exploitation “quite often” or “somewhat often.” Fewer than one in ten (7%) say they never deal with such victims.
- Nearly all of the experts (96%) say the problem of elderly investment fraud/financial exploitation in the U.S. is “very serious” (70%) or “somewhat serious (26%).
- More than nine out of ten respondents (93%) indicate that medical professionals can play a “very” or “somewhat” important role “when they are trained to spot and report the warning signs of elderly investment fraud/financial exploitation.”
- According to the experts, the top three reasons investment frauds against elderly victims go unreported are: “shame on the part of victims” (86%); “the ability of con artists to string victims along until it is too late” (80%); and “failure of adult children to spot the problem and intervene” (70%).
- Nearly all (96%) of respondents say that “potential problems with mental comprehension make seniors more vulnerable” to financial swindles “very often” or “quite often.”
- A large majority of respondents (80%) say that their experience is “very” or “somewhat” consistent with “a 2008 study (that) found that about 35 percent of the 25 million people over age 71 in the U.S. either have mild cognitive impairment or Alzheimer’s disease, making them especially vulnerable to financial exploitation, including investment fraud.”
In summary, we all need to think more about ways to head off financial swindlers who target our parents or other elderly family members. It’s sometimes difficult to step in before damage is done, but at least we can hope to head it off before the damage is complete. If your parents are 65 or over and you suspect they might be slipping, even a bit, consider asking them about their investments and perhaps add that you’d be willing to help them decide whether to invest if an opportunity is presented to them. And if you think they might have gotten into a scam or are losing money because of bad financial advice, call us. We can help you figure it out and, if necessary, take action to seek recovery of their money.