Son & Elderly Father

Mild cognitive impairment often makes seniors more vulnerable to investment fraud and other forms of elderly financial abuse, according to a recent survey of medical professionals who are more willing to refer older patients for help.

In a survey by the Investor Protection Trust, 21% of doctors and nurses say they are aware that they are often dealing with the victims of elderly financial abuse. Ninety-two percent though that mild cognitive impairment made them more vulnerable to such fraud.

The U.S. Securities and Exchange Commission warns that seniors are targets for elderly financial abuse, and says that more than 5 million senior citizens fall victim to it each year.

A 2010 elder fraud survey by Investor Protection Trust found that more than 7 million older Americans — one of every five people older than 65 — have been victimized by a financial swindle.

“Doctors know that older Americans are not to blame if they suffer from mild cognitive impairment," says Dr. Robert Roush, director of the Texas Consortium Geriatric Education Center, in a statement. "It is a medical condition that can have very serious consequences when it comes to how susceptible older Americans are to con artists and others seeking to exploit them financially."

There are ways to prevent elderly financial abuse. Here are five recommended by the California Society of CPAs, a nonprofit state association representing more than 40,000 CPAs in the area of tax, audit, accounting and consulting services such as personal finance:

Be aware

Con artists can use hard-core social influence tactics to take seniors in, both on the phone and in person. The oldest generation in any family is vulnerable to scammers for a variety of reasons, none of which necessarily have to do with their mental competence.

They're typically home during the day — a prime time for con artists. Once they give up the financial security a paycheck provides, and begin living off the wealth they've accumulated for retirement, they are naturally mindful that the money has to last. This makes them more susceptible to investment schemes and the con artists who sell them on this fear as a part of elderly financial abuse.

Identify vulnerabilities

Your parents don't have to lose their life savings in one fell swoop to do lasting damage to their financial security.  In fact, many seniors are swindled into draining their savings over time, sending $10 here and $20 there for contests and charities that may not be on the up-and-up.

For seniors on a fixed income these small amounts of fraud can be devastating. While the threats of elderly financial abuse come in many shapes and sizes, the most common scams against seniors fall into three groups: Telemarketing scams, "free" lunch investment seminars, and religious or social group fraud.

Safeguard your family

Learn about the most common kinds of senior scams and talk to your folks about them. Tell them it's important they know what's happening so they can avoid elderly financial abuse.

It's also important to know your family's social circle. Are you hearing a new name mentioned in the conversations you have with your elderly parents?  One of the more difficult kinds of crimes to uncover is theft committed by a caregiver such as a nurse or aide, or by a family member.

Elderly financial abuse most frequently is the result of a relationship gone wrong, or a betrayal of trust. A family member, friend or stranger may develop a trusting relationship with the older person with the expectation that they will derive financial gains from the relationship. He or she starts out actually helping to pay the bills. But as the older person declines in mental agility, the opportunity to dip into the bank account for personal needs becomes overpowering.

The use of legal — or purported legal — documents such as joint bank accounts, durable or enduring powers of attorney, deeds, and wills exponentially complicates detection and recovery because of the intended screen of legitimacy.

There are some warning signs of this type of elderly financial abuse. Many larcenous caregivers have a history of alcohol or drug abuse. Also watch for signs that they're trying to control your parents' actions or isolate them from family and friends. If you are hiring a professional caregiver, don't just check out their resume and references; you should also do a professional credit or background check.

Look for clues of elderly financial abuse

Helping manage your parents' money can aid you in noticing trouble early. This is a delicate topic to suggest, but one way to make it easier is to bring up a question or concern you have about your own finances, just to get everyone talking.

Again, you don't want to make anyone feel incompetent, but even simple tasks such as looking over their phone bills or financial statements can alert you to large ATM withdrawals or expensive calls to 900 numbers.

Failing that kind of access to your parents' financial records, keep alert to other clues. Are your parents getting a lot of junk mail for contests, free trips, and sweepstakes? Are they receiving calls from strangers offering awards or moneymaking deals?

That may indicate that they've already ended up on a sucker list. Also check around the house. If there are lots of cheap items like costume jewelry or mini-flashlights, they may be purchasing things in order to "win" a contest, one that is a common con-artist lure. If your parents suddenly become secretive or defensive about their finances, that may be a sign that they've already fallen for a con of elderly financial abuse.

Take action if you suspect fraud

If it appears that one of your parents has gotten involved in a scheme involving elderly financial abuse, the worst thing you can do is to lecture them. Saying "I can't believe you fell for this," will not only put an emotional wedge between you and them, it could cause them to start withholding information. Victims already feel very embarrassed and defensive about being caught up in this crime.

Instead of judging or getting upset, ask conversationally about the things that worry you. Find out more about how they got that piece of jewelry, say, or what was said at that free lunch. Just remember that it may take a while to get some useful information — your parents may be in denial. People don't want to believe they've been scammed.

The best place to report fraud and elderly financial abuse is to your state securities regulator's office. Even if you don't have concrete proof that something's afoot, it's important to get regulators involved. They may be able to connect the dots in ways you can't.

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