The Many Forms of Elder Financial Abuse

American seniors, holding trillions in wealth, are increasingly targeted by fraudulent schemes to separate them from their hard earned savings.  This epidemic of elder financial abuse takes on many forms, including:

  • Predatory Lending, often using reverse mortgage loans
  • Pyramid or Ponzi schemes with promises of unreasonably high returns
  • Internet/Email phishing to obtain access to bank account or other financial data
  • Threatening demands for payments of taxes or other obligations that are not actually owed
  • Lottery and inheritance schemes, requiring taxes or transactional costs to be paid upfront
  • Fake charities or misdirection of funds claimed to be collected for actual charities
  • Urgent requests for funds purportedly to assist a family member in trouble

However the most troubling, and unfortunately most common, form of elder abuse is the misappropriation of assets by family members and other trusted associates.  The National Adult Protective Services Association reports that 90% of elder financial abuse fall into this category.  Much of this occurs because family members and trusted advisors have a unique insight into the onset of the vulnerabilities of advanced age, often taking advantage of a person’s diminished cognitive ability or presenting themselves as a trusted resource in times of need.   As described in this related article, a forensic accountant can help reconstruct the existence and prior usage of funds and other financial resources when misappropriation of assets is suspected.

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