Let’s do a quick thought experiment. Why did Willie Sutton rob banks?
And who, by and large, owns that money at those banks?
Well, older folks. They’ve had a lifetime to accumulate it.
So should we expect to see older Americans victimized by financial exploitation?
Yes–and that is exactly what we are seeing. Since 2013, financial institutions reported more than 180,000 suspicious activities targeting older folks, involving more than $6 billion. And those reported cases probably represent just a tiny fraction of the estimated 3.5 million incidents of elder financial abuse that happen every year.
In February, the Consumer Financial Protection Bureau issued a report on elder financial exploitation. The Bureau analyzed Suspicious Activity Reports–SARs–filed by banks, credit unions, and other financial-services providers from 2013-2017. It found that elder financial exploitation was “widespread and damaging.”
- SAR filings on elder financial exploitation quadrupled from 2013-2017–though they still may account for just 2% of actual incidents of elder financial abuse. For context, overall SAR filings increased by 40% from 2013-2017.
- Financial institutions reported $1.7 billion in suspicious activities in 2017, including actual losses and attempts to steal older folks’ funds.
- Nearly 80% of elder financial exploitation SARs involved a monetary loss.
- Older adults lost, on average, $34,200. In 7% of the SARs, the loss exceeded $100,000. (When the financial institutions themselves lost money, by contrast, the average loss per filer was $16,700. So maybe the banks are doing a better job of protecting their own money than ours?)
- People aged 70-79 had the highest average loss, $45,300.
- Losses were greatest when the victim knew the suspect. And losses were even more common, and even greater, when the suspects were the victim’s fiduciaries (for example, an agent under a power of attorney).
- The suspicious activities reported took place, on average, over a four-month period. So they were not, on average, a one-off thing.
- In most cases, the SARs do not indicate that the financial institutions are reporting elder financial abuse to law enforcement or adult protective services.
What kind of scams are we talking about? The Bureau identified some common patterns:
- Exploitation by a family member or fiduciary–for example, your agent uses a power of attorney to withdraw money from your accounts for his own use;
- Theft by a caregiver–for example, a home-health nurse writes herself checks from your checkbook or using your ATM card to withdraw cash for herself;
- Money mule–for example, scammers convince you to send money to help a relative in need overseas, avoid a problem with the IRS, help free the Prince of Nigeria, etc.;
- Lottery/sweepstakes scams–a scammer tells you that you’ve won a huge prize or a long-lost relative has left you an inheritance, but you need to pay taxes in advance or otherwise send money to release it;
- Romance scam–you meet someone online and start a virtual relationship with them, but they need money to travel to meet you in person.
If you think that you’ve been caught up in a scheme like this, it is important to act very, very quickly to fully protect your rights. The law gives you some important protections, but you need to act immediately to use some of them. At Johnson, Rosen & O’Keeffe, we’ve seen scams like this in our practice, and we have helped people get their money back–either from the scammers themselves or from the financial institution.