Nine tips for seniors to avoid financial abuse
June 25, 2009 · Updated 4:28 PM
SENIOR LIFE 101
While seniors face a growing number of challenges just trying to stay physically, mentally and emotionally “fit,” I’m sad to say there is another challenge taking its toll on our senior population today … and that is physical and financial abuse. And what makes this even more troubling is that it often comes at the hands of trusted family members and friends.
In today’s column, I want to address the specific issue of financial abuse, or exploitation, and share some tips seniors and their families can employ to avoid the pitfalls of this growing problem. Next month, we’ll tackle the issue of physical abuse.
What do I mean by senior “financial abuse or exploitation?” Simply, this refers to any situation where someone causes a senior to make a financial decision that’s based on threats, pressure or incomplete or misleading information and a decision that leads them to do something with their assets that isn’t in their best interests.
Seniors can be exploited by lots of people for lots of reasons, and not just crooks or con men, but by family and friends as well. Exploited not because they’re in the wrong crowd, but because they’re apart from the crowd altogether. Not because they’re uneducated, but because they’re uninformed. Not because they’re greedy, but because they’re generous. And not because they want someone to take care of them, but rather because they want to take care of themselves. In some cases, as a senior begins exhibiting signs of dementia, this also can be an opening for a friend or family member or con artist to exploit that forgetfulness.
For many seniors today, there is a growing sense of fear that their resources may not be sufficient to weather the economic storms we’re currently experiencing, or the unexpected physical setbacks that will inevitably confront us. As we get older, and retire, we realize we aren’t sure whether we’ll outlive our resources. And that makes us susceptible to those who promise easy solutions and big returns. Which leads to another fear — the fear of fraud. In fact, a recent survey by the Financial Freedom company asked Americans between the ages of 62 and 75 to rank a list of fears. And what do you think was Number One? That’s right, fraud. Seniors fear fraud ahead of health crises and terrorism.
So we know that fraud targeted toward seniors is real, and we know that seniors worry about it. The question is what can we do to protect ourselves, whether we’re seniors or those who care about them?
I would like to offer the following recommendations:
(1) Take your time. Don’t be pressured into making quick decisions such as wiring money or writing a check at a seminar.
(2) Be suspicious of anyone who promises you inflated returns on an investment.
(3) Be wary of an advisor who doesn’t talk about risk or says an investment carries no risk. Recognize that not all financial products are insured. There’s nothing wrong with that, but know the difference.
(4) Involve others. Resist pressure to act right away.
(5) Verify the credentials and background of the person you’re dealing with. Legitimate professionals welcome your scrutiny. Three centuries ago, Thomas Cooper said, “Fraud and falsehood only dread examination. Truth invites it.”
(6) Remember when you were a little kid and your parents told you to beware of strangers? It’s time to repeat their advice: Beware of strangers.
(7) Understand the nature of the investment. Get all of the facts. What something is called means nothing; what something does means everything.
(8) Monitor your account statements closely.
And, finally, (9) the single best way to avoid being exploited financially is to have a plan. No matter what your age, it is never too late to put together a financial plan.
Financial exploitation is real, and it’s a growing issue among seniors today. Remember, the best defense is the best offense. Seniors are most susceptible to financial exploitation when they’re fearful and when they’re alone. Let’s take steps now to avoid those pitfalls.
Carl R. Johnson is the community relations director at Abiding HomeCare in Silverdale. He appears the last Friday of the month in the CK Reporter.