Preventing Elder Financial Abuse
The statistics on elder abuse are staggering. According to one estimate, 5 million elderly Americans are abused every year—often by someone they look to for care and protection. The National Council on Aging estimates that 1 in 10 Americans over the age of 60 have been the victim of some form of elder abuse. Unfortunately, as the population ages, the problem of elder abuse is expected to grow.
One of the most pernicious forms of elder abuse is financial abuse. Financial abuse refers to a wide variety of actions, including fraud, theft, the misuse of an elderly person’s assets or credit, or the use of undue influence to gain control of an older person’s property. According to the American Bankers Association, victims of elder abuse lost an estimated $2.9 billion last year alone.
Last month, President Trump signed the Senior Safe Act, a law intended to help combat elder financial abuse. The law had broad bi-partisan support in both houses of Congress. In many respects, the Senior Safe Act follows measures already in place is 40 states. The benefit of the new law is that it extends these protections to activities involving federal financial institutions.
The Senior Safe Act makes it easier for federal financial institutions to report on suspected elder abuse without fearing sanctions for violating client privacy rules. Before the Senior Safe Act, financial institutions like national banks or savings and loans faced severe penalties if they were sued for breaching privacy regulations—even if their intent was to prevent financial abuse. Now these institutions can receive immunity if they train their employees on how to identify and report the suspected exploitation of an elderly person. A lot of details about how the law will be implemented still need to be worked out, but the Senior Safe Act is an encouraging step forward.
As good as these legal protections are, seniors need to protect themselves from the threat of financial abuse. Here are some suggestions from the American Bankers Association:
Shred receipts, old bank statements and unused credit card offers before throwing them away.
Lock up your checkbook, account statements and other sensitive information when others will be in your home.
Order copies of your credit report at least annually to ensure accuracy. Remember, the Fair Credit Reporting Act requires each national credit reporting company to provide you with a free copy of your credit report, at your request, every year.
Never give personal financial information, including your social security number or account number to anyone over the telephone unless you initiated the call and the other party is trusted.
Never rush into a financial decision. Ask for details in writing and get a second opinion. Consult with a financial advisor or attorney before signing any document you don’t understand.
You have the right to not be threatened or intimidated. If you think someone close to you is trying to take control of your finances, call the Monterey County Adult Protective Services at 800-510-2020.
Trust your instincts. If something doesn’t feel right, it may not be right. If it sounds too good to be true, it probably is.
Family members and friends can help protect loved ones from financial abuse. If you see unusual bank activity, including large, frequent or unexplained withdrawals, it may indicate abuse. Likewise, suddenly bouncing checks or bills going unpaid may indicate abuse or at least the need for more support managing the financial details of life.
Steven C. Merrell MBA, CFP®, AIF® is a Partner at Monterey Private Wealth, Inc., a Wealth Management Firm in Monterey. He welcomes questions that you may have concerning investments, taxes, retirement, or estate planning. Send your questions to: Steve Merrell, 2340 Garden Road Suite 202, Monterey, CA 93940 or email them to: firstname.lastname@example.org