According to the Wall Street Journal, a 2010 survey conducted by the financial education organization Investor Protection Trust reports that out of ever five Americans age 65 and over, one of them has been the victim of elder financial abuse. The paper is calling this an epidemic.
A tracking by the Federal Trade Commission in 2012 found that 26% of all fraud complaints involved seniors age 60 and older. Unfortunately, says the WSJ, investigators estimate that just 10% of elder financial fraud cases are reported, with most of these cases never undergoing investigation-a reason for this being that financial schemes are costly to probe. Often, there is little evidence and federal authorities will typically refuse to look into cases where under $100,000 was involved. Still, less than this amount is a lot for many people-especially retirees and those that are too sick to work anymore.
Older seniors can make easy targets. According to a Duke University study, over one-third of seniors, age 71 and older, have some type of cognitive impairment that can make it hard for them to manage their money properly. There are also many seniors who depend on fixed incomes and are in need of additional funding that can easily fall prey to fraud.
Elder Financial Fraud Scams
A fraudster may be a relative, friend, or caregiver that the senior investor knows and trusts, giving him/her access to bank accounts, retirement funds, or agreeing to invest in deals that prove to be scams. There are also registered representatives that may seek to take advantage of an old widow/er who has a huge nest egg and doesn’t understand the risks involved or that the investment opportunity is a Ponzi scam or some other type of fraud. Affinity fraud, in which the scammer is part of the victim’s community in some way, is also a common way that seniors are targeted. A broker from the same church or social group may use his/her connections to collect money from other members.
Because many seniors are no longer working, a lot of them cannot afford to get involved in high-risk ventures. Such losses might devastate their finances, making it difficult for them to pay for healthcare services, medical bills, and living expenses. There are also scammers who will call up seniors by phone or email. Insurance firms have also been known to target investors.
At Shepherd Smith Edwards and Kantas, LTD LLP, our securities lawyers represent the victims of elder financial fraud. Contact one of our senior fraud attorneys today if you or someone you love has lost their investment due to a scam or some other negligence. Your case assessment with us is free.
Financial Scammers Increasingly Target Elderly Americans, The Wall Street Journal, December 23, 2013
More Blog Posts:
Two Ex-JPMorgan Brokers Alleged Bilked Mentally Impaired Elderly Widow of $300,000, Stockbroker Fraud Blog, December 4, 2013
Texas Man gets 40-Year Prison Sentence for Phony Annuity Scam That Targeted Elderly Women, Stockbroker Fraud Blog, September 23, 2013
GAO Wants SEC to Look At Other Criteria for Who Qualifies As An Accredited Investor, Institutional Investor Securities Blog, July 31, 2013