By Joe Casey
Are you or your loved ones vulnerable to fraud? It’s worth thinking about. A study by Annamaria Lusardi at George Washington University and her colleagues found that “nearly one-third of respondents reported that someone had used or attempted to use their financial accounts in the past five years.” (1)
It takes a lot of work, sacrifice, and discipline to save for retirement today. Once you’ve achieved some level of financial security, a defensive mindset becomes important. Not only do you need to manage your assets intelligently so you do not outlive your money, but you also need to be on guard to protect it from fraudsters who are eager to separate it from you. And the upcoming holiday and tax seasons are prime hunting periods for Fraudsters who prey on seniors.
An article on Bloomberg estimates that 5 million older Americans are the victims of financial fraud each year and pegs the cost to seniors at $37 billion annually. (2) And it’s a growing problem globally with an average of 4.7% reporting an incident within a one-year timeframe. (3)
Preventing fraud is difficult to do by yourself. Financial institutions also share responsibility. (2) Inquire about their practices. There’s evidence that money management programs run by solid firms can be an important element in the prevention of financial fraud for seniors, but always check the credentials of people that you or your family do business with. (3) Invest in financial literacy education for those who are not financially savvy today. (4)
A first step you can take is to become aware of the most common current types of fraud and scams and ensure that family members and your older relatives are also up to speed on them. AARP is a good source of information to keep current, especially their podcast The Perfect Scam. Staying aware is critical as the fraudsters are becoming increasingly sophisticated. The Fraudsters relentlessly target seniors and are continually developing new and ever more clever scams.
You’ll quickly become keenly aware of the different types of scams that are out there. One of the most pernicious ones is Guardianship Fraud, because not only your financial assets can be taken, but your freedom as well. and according to Julie Belshe has lived through the experience of her parents being taken by a private guardian and fighting to restore their freedom and their rights. She joined our podcast The Retirement Conversation to share the story of her family’s harrowing experience and what she’s doing today as an advocate for reform so that others do not suffer a similar fate. Their story is detailed in a documentary film The Guardians. But theirs is not an isolated case. Rick Black of the Center for Estate Administration Reform informed us that it happens approximately 10,000 times each year.
Listen to our conversation with Julie Belshe here.
(1)DeLiema, M., Deevy, M., Lusardi, A., & Mitchell, O. S. (2018). Financial Fraud among Older Americans: Evidence and Implications (No. w24803). National Bureau of Economic Research.
(2)Leiber, N. ( 2018, May 3) How Criminals Steal $37 Billion a Year from America’s Elderly. bloomberg.com
(3) Pillemer, K., Burnes, D., Riffin, C., & Lachs, M. S. (2016). Elder abuse: global situation, risk factors, and prevention strategies. The Gerontologist, 56(Suppl_2), S194-S205.
(4) Lusardi, A. (November 2, 2018). Financial Literacy and Financial Decision-Making in Older Adults. American Society on Aging.https://www.asaging.org/blog/