Broken Trust: The Financial Exploitation Of Seniors

In late 2012, a Maine jury found an Androscoggin County woman guilty of stealing from her own mother. The details leading up to this conviction were very troubling: This woman sold her mother’s home and moved her into a camper located in her backyard. As if that were not bad enough, the daughter and her boyfriend went on to deplete her mother’s life savings over the course of two years, leaving her penniless as well as homeless.

In another troubling case, an 82-year old World War II veteran living in Cumberland County had his daughter living with him to help with his care after he suffered two strokes. By the time he had suspected that his daughter had misused his money and he contacted an attorney, his daughter had taken ownership of his home and depleted his savings account from more than $20,000 to $15. She created further financial problems by taking out a personal car loan, using him as a co-signer.

Financial exploitation of older Americans is a growing epidemic that cost seniors an estimated $2.9 billion in 2010, according to the GAO. In Maine alone, there are 14,000 new reports each year of senior abuse, which includes financial abuse. And, in as many as 90 percent of financial cases, the senior is victimized by someone he or she knows well.

The Senate Special Committee on Aging, which I chair, recently held a hearing to examine financial exploitation that harms far too many of our nation’s most vulnerable seniors.

The Committee has brought to light many schemes that have defrauded seniors out of their hard-earned retirement savings. It is deeply troubling when a senior falls victim to one of these schemes. But even more egregious is when the perpetrator is a family member, caregiver, or trusted financial advisor.

Unfortunately, the full story is even worse. Many of these cases are never reported because the victim is too ashamed to report financial exploitation, particularly when it involves a family member. As a consequence, the true incidence of this kind of abuse is not known.

Identifying victims of financial exploitation in my state is particularly difficult because we Mainers pride ourselves on our self-sufficiency. It is difficult for many seniors to ask for help. In addition, since victims who have their assets taken by family members typically do not want their relatives to be criminally prosecuted, the stolen money is rarely recovered. This loss can undermine both the health of older adults and their financial security.

Combating financial abuse of seniors is primarily the responsibility of state and local agencies, particularly Adult Protective Services Agencies, but the federal government also plays an important role. Experts agree that prevention and response to these cases of abuse requires coordinated efforts, which include federal, state and local agencies, law enforcement, the social work and medical community, and financial institutions. The Elder Justice Coordinating Council, which is led by the Department of Health and Human Services, has brought together 12 federal agencies to coordinate efforts to protect older individuals from abuse, including financial exploitation.

I was pleased that Judith Shaw, who serves as the Securities Administrator for the State of Maine, came to Washington to appear as a witness during this hearing. Judith had a great deal to share with members of the Aging Committee because Maine is on the cutting edge of helping to combat financial abuse of seniors though programs like the innovative Senior$afe program, which is the first of its kind in the nation.

Senior$afe is a collaborative effort by Maine’s regulators, financial institutions, and legal organizations to educate bank and credit union employees about how to identify and help stop financial exploitation of older Mainers.

Senior$afe has also published a brochure that provides useful tips to help seniors from becoming victim to financial exploitation and scams.

For example:

• Seniors are advised to monitor their credit reports at least annually by visiting www.annualcreditreport.com or by calling 1-877-322-8228;

• Use caution when utilizing joint accounts as a method of planning for incapacity or getting help paying bills. Both parties are equal owners and have equal access. Seniors are advised to talk to their financial institutions, an attorney or local Area Agency on Aging to learn about options for assistance with finances.

• Never convey or quitclaim an interest in real estate without consulting an attorney.

To be clear, financial exploitation knows no socio-economic boundaries. Victims range from seniors who have very modest financial means to those who have amassed great wealth.

While individuals of limited means are particularly vulnerable, even the wealthiest Americans are not immune to financial exploitation.

During our recent hearing, the Aging Committee also heard from Philip Marshall, who is the grandson of well-known philanthropist Brooke Astor, who summered in Maine for decades. He described how his father, Anthony Marshall, mistreated his mother and mismanaged her assets while she suffered from Alzheimer’s disease.

There are many instances when it is vital for a senior to have the assistance of a family member, friend, or other trusted financial advisor to help manage his or her finances wisely and prudently, particularly if that senior becomes ill or loses some cognitive ability. This is another factor that makes this issue so troubling and complicated.

Through my work on the Aging Committee, I will continue to explore ways to fight financial exploitation and other scams targeted at seniors. Financial exploitation is truly a “broken trust” that harms far too many of our nation’s vulnerable population.