By now most of us have heard about Bernie Madoff and the billions of dollars he swindled from people all over the country. But we may not be aware that this type of fraud, on a much smaller scale, is happening around us all the time. And the people who are most often the victims of these crimes are the elderly.
About 7.3 million older Americans, or one out of every five people over 65 have already been swindled according to an Investor Protection Trust Survey released in June. Recent research from behavior economist David Laibson shows that people tend to make poorer financial decisions as they get older.
But some states have taken steps to help seniors avoid these scams. 23 states including California, Connecticut and Pennsylvania have enlisted Doctors and other medical professionals to be the watchdogs in the fight against elder fraud. Working through the Investment Protection Trust, state regulators are alerting medical professionals to specific red flags that help identify older Americans who may be more vulnerable to investment fraud abuse.
In routine visits with their patients these doctors are trained to ask such questions as “Who manages your money day to day” or “Do you regret any financial decisions you made recently?” Other questions include, “Is anyone pressuring you to give them money?” or ” Has anyone asked you to change your will or your power of attorney?”
More than half of the 67 doctors who were involved in a pilot study in Texas discovered that their patients had been approached with phony financial offers. Financial Planners should also become vigilant in their interactions with their older clients. When I was a practicing financial adviser I learned that one of my older retired doctor clients, in the early stages of Alzheimer’s disease, had been contacted by scam artists all over the country. They told him he had won a lottery and he needed to give them his bank account numbers so they could wire him the money. His wife had to finally get an unlisted phone humber so they would leave him alone.
Elderly parents often will not share these occurrences with their adult children because they don’t want to be viewed as incompetent or gullible. Therefore it is important that their children discuss these problems with the parents’ doctors and ask them to use the questions I have listed above.