It seems almost everyone can give an example of a grandmother or parent who "fell" for the person who contacted them and, after providing convincing evidence of being an employee of the bank or software company, 'sold' them some fraudulent financial product or helped them get rid of a non-existent computer virus for a fee. In cases where the loss is relatively insignificant, a smile may briefly flash across the faces of those who are younger and knowledgeable about the evil ways of the Technological Age World. Soon enough, the smile gives way to a worried frown; even for you, it has become increasingly difficult to stay on top of all the technological affronts.

Aren't social media sites 'routinely' changing their privacy settings? Read the contract behind your ordinary e-mail account and prepare to be shocked.

Part of the difficulty with any form of exploitation and financial scams in particular is that frequently the victim is somehow complicit in the transaction. In fact, it is the victim who consented to the crime. Worse, the place in which these frauds take place is seemingly the most safe: home sweet home. According to Consumer Reports, "the FBI says fraud involving investments, mortgages, and the Internet is growing." Perhaps struggling with the earliest symptoms of dementia and not having grown up with computers, the elderly are the most vulnerable to those duplicitous enough to scam or hack their way into someone's life or financial accounts.

Financial Abuse

In a chapter on financial abuses of the elderly, Thomas Hafemeister, professor at the University of Virginia, notes that the prevalence is difficult to estimate in part because cases often are not reported and it is difficult to detect. "However, the consensus is that it is a significant problem," he wrote. Financial abuse of the elderly is complicated by the fact that the very term, 'financial abuse' is not strictly defined and can encompass many practices that fall within the gray area. Should it be considered abuse, for example, when a person consistently asks for money from an isolated and elderly relative? Defined by strict parameters, then, financial abuse of the elderly involves taking without permission money, assets, or property; misusing credit or ATM cards; coercing or deceiving an elderly person into changing a will or signing any legal paper or contract; coercing or deceiving an elderly person into purchasing unwanted or false products; and, making false claims (such as posing as a legitimate business or charity) in order to gain money.

Another concern is that a family member who wants to protect an elderly relative might be viewed as restrictive; in the very worst cases, the protectors might be seen as attempting to perpetrate a fraud themselves. All around, it can be unpleasant simply trying to help an aging person defend themselves against those who want to steal.

As the articulation of technology becomes increasingly complex, so, too, do the scams meant to trap aging people. Progress, though, is not about to stop so defense is simply a matter of necessity.


Certainly, the first layer of defense is knowledge. AARP, a self-described nonprofit organization that helps people 50 and older improve the quality of their lives, has devoted a section of its website, "Scams & Frauds," to ongoing reports of abuse. So, too, an article in Consumer Reports catalogs and explains recent scams that have been mounted against the elderly, including those that center on solar panel and other home improvements, identity theft, bogus tech support, 'confirm your reservation' (phishing), gift cards, surveys, credit card rate changes, investments, insurance, fraudulent caller posing as a relative, sweepstakes, and vehicle identification numbers.

Another layer of defense may be provided by way of the government. Established by the Dodd-Frank Act, the Consumer Financial Protection Bureau (CFPB) focuses on educating citizens about financial products, and this takes the form of providing information on its website, by way of questions typed into its search engine, while also creating a consumer complaint database. Anyone can submit a complaint, which is registered and logged and eventually CFPB hopes to crunch the numbers, analyze the data, and submit reports to Congress. In particular, they have a resource for older Americans, described as the "Money Smart for Older Adults - Prevent Financial Exploitation" curriculum.

A third layer of defense might be found in commercial products developed for this very purpose. One interesting example is True Link Financial, which provides clients with a prepaid Visa Card (issued by Sunrise Banks, N.A., member FDIC, pursuant to a license from Visa U.S.A.) that is intended to work as a personalized fraud detection device. Its genesis goes to the heart of this matter; according to founder, Kai Stinchcombe, his own family discovered his grandmother donating money to charities they later discovered to be fake. Further investigation into her finances revealed all manner of scams and bogus profiteers. "Monitoring my grandmother's finances has required endless hours and countless difficult conversations," said Stinchcombe. "All along, we were torn between preserving her independence and protecting her wallet."

Through the product he created, families can easily monitor an elderly relative's account, and also prevent payments to fraudulent business or charities, for a small yearly fee that goes into effect only after the first year. "Instead of taking away the checkbook, you're replacing the checkbook with a True Link card," said Stinchcombe. It works on the premise "that some forms of payment aren't safe, and others have the safety features that seniors need," according to Stinchcombe; a True Link card simply means you have preserved their independence while providing them with greater safety. Additionally, True Link Financial maintains a growing database of fraudulent schemes and merchants and will simply red flag or block payment to such organizations on behalf of cardholders and their administrators.

In the end, whether the concern is for loved ones or even if it is entirely self-centered, everyone and anyone who hopes to live on to a ripe old age needs to consider the issue of financial exploitation while also taking steps to avoid it.

Source: Hafemeister TL. Financial Abuse of the Elderly in Domestic Setting from 'Abuse, Neglect, and Exploitation in an Aging America.' The National Academies Press. 2003.