More often than not, senior citizens will be scammed and defrauded by their loved ones, not strangers, according to the author of “How to Steal from Mom; A Wake-up Call for Seniors.”
“They will be preyed upon by those near and dear them,” said George Edward of Bellingham. Before retiring, Edward was the risk management officer for Whatcom Educational Credit Union. During his tenure he developed the WECU SAFE Program, tailored to combat the financial exploitation of senior citizens.
While leading the program from 2007-15, he investigated 120 cases of financial fraud and abuse cases. Seventy-five percent of the scammers were a son or daughter. The average age of their victims was 82.
In most cases, the victim was alone, physically disabled, confused or suffering from Alzheimer’s, Edward said.
The crime is often referred to as familial fraud. Familial fraud occurs when fraud is committed by one family member against another. Caregiver fraud may be committed by a family member but it could also be anyone trusted to help with legal, financial or personal business. In either case, the fraud is the same, said Laura Lee, senior vice president and security officer of Peoples Bank in Bellingham.
The people who commit such crimes target older people because they are most likely to have substantial savings and excellent credit. They also tend to be polite and trusting, a result of being part of what Edward calls the “handshake generation.”
As more and more Baby Boomers retire on fixed incomes and more seniors become totally dependent on others, the number of elderly victims of financial abuse will increase, Edward said.
“In my experience, the typical victim does not read or understand his or her monthly (bank) statement and implicitly trusts the son or daughter with the fiduciary responsibility of managing his or her finances,” Edward said.
They are of the generation that trusts people. They are not used to hustlers.
Danette Beckley, Bellingham Police lieutenant
While he has seen a growing number of familial fraud cases, Edward says there are likely more that go unreported.
Seniors also are less likely to report a fraud, because they might be ashamed at having been scammed or don’t realize they have been victimized. They also might be concerned that relatives will think they no longer have the capacity to care for themselves.
Bellingham Police Lt. Danette Beckley said she is aware of at least a couple of cases of familial fraud in Bellingham involving elderly parents. In one instance, a son was given the power of attorney and bilked his elderly mother out of thousands of dollars.
“It’s just very, very sad,” Beckley said. “They are of the generation that trusts people. They are not used to hustlers.”
Her advice to anyone, especially a senior citizen, who is getting pressured to make a risky financial decision, is to take a time out, think it through and get a second opinion from someone you trust.
“Talk it through,” Beckley said. “If it sounds too good to be true, it probably is.”
While familial fraud is certainly common, it and caregiver fraud are not the most frequently reported frauds, but dollar losses per case can be some of the highest, said Lee of Peoples Bank.
It’s painful to think that someone close to you could take advantage of you. However, these crimes are happening regularly and with heartbreaking consequences.
Laura Lee, senior vice president and security officer of Peoples Bank, Bellingham
Familial or caregiver fraud may be going unreported because victims often feel embarrassed when they’ve been taken advantage of by someone they trust. When potential financial abuse is identified, victims often deny the fraud or refuse to provide information. It is vital to report the fraud to your bank as soon as you identify or suspect it, regardless of who commits the fraud, Lee said.
In the role of a trusted helper or friend, a perpetrator gains access to personal and financial information; and financial instruments such as checks, debit cards or access to online banking that provides the opportunity for the fraud, Lee said.
“It’s painful to think that someone close to you could take advantage of you,” Lee said. “However, these crimes are happening regularly and with heartbreaking consequences.”
Securing your personal information is always the first step to preventing any fraud, Lee said. That includes personal information in your home, your computer, your wallet or purse. In familial and caregiver fraud, access to your sensitive information is often easy because the family member/caregiver is in your home.
“We all want to think we should not have to lock up information in our own homes, but it’s fundamental security,” Lee said, offering a few tips.
Eliminate opportunity: Whenever you give someone access to your home, even when dealing with trustworthy service companies, it’s smart to eliminate the opportunity or temptation to commit fraud. All that is needed is for someone to see and copy your social security number or debit card information; a person doesn’t need to steal the card to commit fraud, so you may never detect the security compromise.
Online security: Using online banking allows you to eliminate paper records and is a great way to monitor your accounts. Online security can be very strong. Talk to your banker about your online banking security features and how to use them. Keep your password secure by not telling it to anyone.
Secure passwords: Set a password that people who know you couldn’t guess. For example, don’t use the real name of “first family pet” as a security question, because it is likely that many people know it. In familial fraud not only do family members have access to your home, but they know a lot of personal information about you.
“You have to trust someone,” Lee said. “Staying connected with family and friends even when not in the same town is important. Even if you are close to family and friends, connecting with local community resources for seniors can provide additional support and referrals to resources. Your banker should be one of your trusted resources.”
Protecting yourself from familial and caregiver fraud is really the same as protecting from any fraud, said Laura Lee, senior vice president and security officer for Peoples Bank, Bellingham. Here are some tips:
▪ First, you have to admit that you could, at some point, be vulnerable, even if you believe your aren’t currently and act accordingly.
▪ Keeping your sensitive information secure is key to protecting yourself.
▪ Identify resources you can trust and make plans to use them before you need them. Always talk to your banker immediately if you suspect someone is committing fraud on your account or have any doubts about someone you may have authorized in the past but now aren’t sure. Unfortunately, you are not the first or only person to be a victim of this fraud. Your banker understands this fraud and should be one of your trusted resources.
▪ It is important to know that in some cases consumers may be protected and reimbursed for unauthorized financial account activity, but that protection may require that the fraud is reported within a specific time frame. A bank may be able to stop the current fraud. However, due to customer confidentiality, a bank may be limited in what it can do to prevent further financial abuse if the victim is unwilling to provide information.
If you or a relative have been scammed either by family members or strangers, report it by contacting local law enforcement, or contact the Washington Attorney General’s office at 800-551-4636 or atg.wa.gov/file-complaint.