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Bank Fraud and The Senior Population: A New Betrayal
by Marjorie Dorfman

There is nothing new about older citizens being fleeced by con artists, but fraud committed by those that are trusted, namely family members and caregivers, is not only heart breaking but also becoming more and more prevalent. Read on for details about this lesser known but ever-growing problem and hold onto everything you own very tightly.

A Growing Problem Emerges
According to Jan Walsh, a Denver-based Certified Financial Planner specializing in retirement planning, the defrauding of seniors by people they trust "is a hidden problem that is growing rapidly as the nation’s population ages." Experts feel that true statistics are difficult to ascertain because victims are too ashamed or too embarrassed to report financial exploitation committed often by a close relative. Despite this disturbing factor, the National Center for Elder Abuse in Washington, DC, reports that such incidents comprise some 12% of all reported elder abuse cases.

The Power of Banks
Banks are in a unique position to detect the problem, whether they are happy about such an arrangement or not. In some states, they are taking action and becoming a significant part of the battle to protect the elderly from fraud and theft. In Massachusetts, according to state secretary of elder affairs, Frank Ollivierre, their plan, in which bank employees are trained to look out for inconsistent banking activities, will be used throughout the country and is now in effect on a smaller scale in other states, namely, New York, Kentucky, California and Washington.

Some Warning Signs
Some of the red flags raised include: sudden large withdrawals from an account that was previously inactive or large transfers of cash from a recently opened account. Also signatures are more carefully scrutinized than they had been in the past. Another suspicious sign is frequent withdrawals from automatic teller machines, especially if that person has not used ATMs before. Also bank employees are cautioned to be on the lookout for signs of coercion when the elderly are making withdrawals, especially when the customer is accompanied by another person and cannot speak freely. A nervous elderly person who can’t explain why the money is needed or who seems confused about missing funds may well be an extortion victim.

Disturbing Changes and How To Fight Them
Crimes against the elderly are like that alien creature of celluloid fame; they take many terrible forms. According once again to Jan Walsh: "Often the abuser is someone who becomes the agent of the elderly person through a power of attorney and then transfers assets for his or her personal use." Some bank procedures seniors fall prey to include: the transfer and subsequent sale of assets or the title of a home, the non-authorized withdrawal from checking, savings or investment accounts, the alteration of wills through intimidation, loans withdrawn and then given to the abuser and Social Security checks or benefit checks from pensions signed over to the abuser who cashes them.

To prevent these types of crimes from occurring, Walsh suggests the following precautions:
Limit power of attorney
This is a vehicle often utilized to steal someone’s assets. Make sure whoever it is can be trusted and even if you can be sure of that, limit their scope. Consider providing a check on their activities by making it mandatory that an annual report of income and expenses be presented to an outside party such as a lawyer or financial planner.
Direct Deposit for Social Security and benefit checks
This will acutely curtail the possibility of theft even though the funds may still be at risk if the abuser is a joint owner of the account in question.
Use automatic bill paying
This will reduce the handling of checks and transfers and withdrawals of funds. Routine bills can be paid monthly from a checking or savings account. To insure peace of mind, you may also consider hiring a bill-paying service, which will keep the abuser’s hands away from the funds.
Keep open communications with the bank.
Banks are the first to notice problems relating to financial activity.
Check all references for a care-giver
There is no under-estimating the importance of this step. Unfortunately, many abusers are trusted family members, which add a cruel twist to this already terrible situation.

Other Threats
The number of senior citizens is rising rapidly and many abusers have considerable computer skills, which enable more sophisticated targeting techniques to isolate the senior citizen who will be their next "mark." They not only use the traditional cold telephone call to solicit victims as well as mass mailings, but also online scams such as phishing and e-mail spamming. One of the major problems associated with non-family members who abuse the elderly is the fact that these criminals are often located outside the United States making it difficult for American law enforcement officials to track them down.

Why Do Senior Citizens Make Such Attractive Targets?
Many seniors have "nest eggs."
Elderly citizens may be less likely to report a fraud either because they don’t know where to go or because they are too embarrassed to tell anyone.
When a crime is reported, many times an elderly person cannot remember the exact details, making apprehension of the guilty party or parties much more difficult.
Many of the products and / or services offered by con artists deliberately appeal to the elderly population, including: anti-aging and other health products, health care services and investments related to retirement savings.

Some Common Scams To Watch Out For
Identity theft
Health insurance frauds involving medical equipment. Medicare fraud and counterfeit prescription drugs
Foreign lottery sweepstakes fraud
Advance fee / credit card frauds
Investment fraud
Charity schemes
Recovery schemes

Some Ways To Fight Back
The elderly need not be vulnerable targets for con artists. Here are some tactics that might even out the playing field:
Shred credit card receipts and old bank statements
Close unused credit card or bank accounts
Never give out personal information via the phone, mail or internet unless you initiated the contact
Never respond to an offer you don’t understand
Never pay in advance for anything
Require any services or purchases to be in writing
Discuss investment plans with an investment advisor or a trusted friend or family member

Who To Call?
If you are a senior citizen who has been victimized by fraud, call your local or state law enforcement agency. Report fraud online as well as through the FBI’s Internet Crime Complaint Center, which is run in concert with National White Collar Crime Center and will help you get the information to the proper authorities. The FBI does not handle individual cases unless there is reason to believe that an international fraud ring or a tremendous amount of money are involved.

Together, We Win
Armed with the knowledge of warning signs and aided by the initiative offered by so many banks of today, bank-related fraud has been somewhat reduced. It is however, still a terrible problem with even more terrible psychological and financial repercussions. It’s like a weed that grows until checked and then finds another place to rear its ugly head. Get involved in stopping it any way you can. If you are a senior, remember that old adage, look before you leap when it comes to giving away your hard-earned money. If you don’t feel you can trust a family member or he or she makes you feel uncomfortable in any way, then by all means trust your instincts and don’t give them power of attorney. Despite the feeling that family is better, that is not always the case.

Be alert and aware. Survival at any age, but particularly in the senior years, is a vulnerable challenge. Not being able to trust those you know and care for is a sad statement for all mankind, but in the end don’t ever forget that the nest egg you save may well be your own.


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Copyright 2008