When most journalists, investment and insurance professionals, and attorneys estimate the financial damage our senior citizens suffer from elder financial abuse, they'll point to a familiar figure from MetLife: $2.9 billion in annual losses. That number, taken from MetLife's well-researched 2009 study, might still fall short of a full accounting, though. Reported cases, after all, will compose only a fraction of the massive fraud and exploitation perpetrated against the elderly.
A new report released by True Link, a San Francisco financial services firm devoted to protecting the portfolios of seniors, gives a truly sobering assessment of the situation - rather than around $3 billion lost, True Link's analysts say that the figure is closer to $36 billion, a dozen times the damage. Let's do an overview of their breakdown:
- Financial Exploitation - $16.99 Billion: Financial exploitation is a "gray area" where unscrupulous marketers and telemarketers, salesmen and other bad actors use legal - but wholly unethical - tactics against senior citizens. Social pressure, deceptive advertising, hidden charges, etc., are all wielded to manipulate an elder likely suffering from cognitive decline and memory loss in order to "legally" take their money.
- Criminal Fraud - $12.76 Billion: This is the type of crime most people will associate with stealing from senior citizens - Nigerian Prince email scams, phone calls from fake grandchildren stranded and desperate for cash, "internet sweethearts" looking for money, Ponzi schemes, and identity theft.
- Caregiver Abuse - $6.67 Billion: Here's the most insidious form of elder abuse: when caregivers, including relatives, friends, care staff, lawyers, accountants, etc., abuse their relationship of trust with a senior citizen and divert the victim's funds for their own use. This will often be accompanied by neglect and even physical and psychological abuse and intimidation, since the wrongdoer is using a position of undue influence to illicitly capitalize on an elder's vulnerability.
Aside from these figures being substantially greater than previous estimates, the True Link study revealed some other conclusions on elder financial abuse that might seem counter-intuitive. It found that younger, college-educated, and urban seniors lose more money than those who don't share these characteristics, pointing to the danger of overconfidence even as financial literacy declines. The information produced by the analysis also showed that those seniors who receive one or more telemarketing phone calls per day were at much greater risk of fraud and exploitation.
There's a simple truth in these data-points - loneliness is vulnerability. Be there for your elderly loved one if you want to keep them safe.