Stopping Fraud Against the Elderly Why it happens here and what to do about it
Burman, Critton, Luttier and Coleman LLP Blog
Florida has long been a mecca for retirement. In 2005 approximately 400,000 retired to this state, which was three times the amount of people who retired to California and Arizona. Approximately 17% of the State’s population is over the age of sixty five, and in some counties the percentage of residents over that age tops 30%. Unfortunately while Florida’s subtropical climate and beautiful beaches are a magnet for retirees, those same virtues also attract the con men and unscrupulous businessmen who prey on them. Often the adult children of elderly parents are left picking up the pieces left behind after a parent has been defrauded. Just as often elderly people who have been the victims of fraud are so embarrassed by the fact that they have been taken advantage of that they don’t tell their children or relatives what has happened. Consequently, as is often the case in life, an ounce of prevention is worth a pound of cure. Here are some tips to combat fraud against the elderly:
- Be familiar with your parents’ financial activity: Although financial institutions have a statutory duty under F.S. § 415.0134 to report suspected elderly abuse or exploitation, the hard cold reality is that these institutions are businesses which strive to be as efficient and profitable as possible. Therefore banks and brokerage houses typically act to protect their own interests, and often fail to comply with statutory reporting requirements. Moreover, the trend in banking and financial services has long been toward insulating themselves from liability and eliminating the direct, person to person, contacts which are often so critical to spotting fraud. Does you parent have a safe deposit box? You can bet the safe deposit box agreement limits or eliminates the bank’s liability for theft from that box. Does your parent have a checking account? You can bet that over the years the bank has consistently limited the amount of information available to your parents in their monthly statements. Very few bank provide canceled checks anymore, and many of them are pushing clients into on-line banking. These changes typically make it harder for your parents to manage their financial affairs. You should take the time to learn what accounts your parents have and at what institutions. If possible you should have duplicate statements sent to your home, and you should review them for changes in patterns of financial activity. For instance, if you begin to see large checks made out to cash, or frequent withdraws which do not seem to be tied to any specific bill or debt, make a gentle inquiry regarding the purpose of the expenditures.
- Simplify, Simplify: A collary of the first rule is to simplify your parents’ financial lives. Where possible, eliminate multiple bank and brokerage accounts, and suggest that your parents use a single branch for their banking. It is much easier to keep track of what is going on if fewer accounts are involved. Very few retired persons need complicated investment strategies or products. Quite simply, most senior citizens need to preserve capital and reduce expenditures – not play the stock market or invest in complicated business ventures.
- Teach Mom and Dad to hang up the Phone: Unfortunately, a large number of scams still begin over the telephone. Scammers know that senior citizens often live alone and are isolated, that they are more polite, and that they tend to have more time to speak on the phone. Consequently, scammers have learned over the years that repeat calls and lengthy (sometimes pressuring or threatening) conversations can lead to an elderly person giving financial information out over the phone, or agreeing to a “purchase” or “investment” that is just the first step in a scam. Tell Mom and Dad to never give out personal or financial information over the phone – and that it’s o.k. to simply hang up on someone who seeks this information. Finally, the “Do-Not-Call” registry can prevent many of these calls from ever taking place.
- Watch the Usual Suspects: Confidence schemes and frauds typically dress up as legitimate business ventures, and time and again we see the same “covers” being used. These often include the following types of businesses:
- Life Insurance/Annuities/Viatical Salesmen
- Debt Consolidators and Mortgage Brokers
- Anyone offering a prize or a chance to participate in a contest
Advise your elderly parents that they should avoid any transaction which requires a “deposit” or “fee” up front. The most basic schemes involve transactions where the con man advises the victim that he or she has to pay an initial sum for “materials” (contractor scam), an “initiation fee”, “origination fee”, or “application fee” (financial institution/investment scams); or a “registration fee” or “shipping fee” (contests) and then simply disappear with the victim’s money. Remember, if it sounds too good to be true, it probably is.
The sad reality is that in today’s go-go money is all that matters world no one will look after your elderly parents but you. Your parent’s financial institutions need to maximize profit by providing minimal services in exchange for a maximum fee, law enforcement and prosecutor’s budgets are being slashed, and the old fashioned neighborhoods where everyone watches out for everyone else is pretty much a thing of the past. If you believe a parent has been taken advantage of and would like to see if you have legal recourse, feel free to contact us at Burman, Critton, Luttier & Coleman.