A report by the Wall Street Journal states that 43 percent of older Americans exhibit one or more signs of financial victimization. Yet, a Merrill Lynch study indicates that phone-scammers and other spammer schemes represent only about 4.5 percent of elder financial fraud. So where does the greatest percentage of financial victimization come from? Surprisingly, it is estimated that 70 percent of elder fraud cases have a family member as the perpetrator. Often the root cause of victimization comes from isolation, making a trusting but defenseless elder person a potential target for a family member to cheat the elder out of money. It can often happen with the loss of a spouse, with health problems or even due to a relocation to an unfamiliar area.
Some fraud can be very subtle, such as having a change in gifting habits, in decision-making or in investment behavior. Victimization can occur since many elderly people are leery of discussing sensitive financial information with family or friends, keeping themselves isolated from someone who could help recognize either a potential or an on-going exploitation. To prevent elder fraud, it is recommended to have a network of trusted people, not necessarily all family members, but individuals from whom to seek advice or express concerns. Behavioral finance suggests that people deepen connections with others to enable information flow and to facilitate collaborative decision-making. This intentional openness can be a way for families to prevent, detect, and recover from elder fraud. One suggestion is to have an established annual meeting with open and honest dialogue about financial questions and concerns; this would help to indicate any irregularities that might be going on, thus making an elderly person less vulnerable. For additional information, go to: http://ireader.olivesoftware.com/Olive/iReader/AtlantaJournal/SharedArticle.ashx?document=AJC%5C2017%5C08%5C06&article=Ar05201