Elder Financial Abuse Under-Reported And Misunderstood
October 20, 2014 by Proquest LLC
Elder financial abuse remains an under-reported and misunderstood issue – one likely to get worse as America’s population ages – according to the 2014 Safeguarding Our Seniors study from Allianz Life Insurance Company ofNorth America (Allianz Life).
In its release, the company said that as America’s population ages and life expectancy rises, more cases of elder financial abuse are possible.
The study of more than 2,000 Americans – both potential victims (ages 65+) and other adults (ages 40-64) – found that misconceptions persist about the most likely sources of abuse, and the financial impact on victims, though under-reported, is often significant. Allianz Life leveraged the study’s insights to create educational materials for financial professionals and helped build a new community outreach program staffed by Allianz Life employee volunteers.
“Although past studies have explored elder financial abuse, it’s crucial to get a current picture to help determine how the financial services industry can best address this difficult yet preventable problem,” said Allianz Life President and CEO Walter White. “As America’s population gets older, the number of seniors with age- related cognitive impairments naturally is expected to grow. Greater awareness about the frequency of elder financial abuse will foster more discussion about ways to keep our seniors safe from financial exploitation.”
Under-reported and Misunderstood
While the number of elders in the Safeguarding Our Seniors study who said they have suffered financial abuse is relatively small (5 percent), that number is likely an underestimate because some seniors might not self-identify or report abuse. Given that the senior population is expected to surpass 54 million in 2020,1 the Allianz Life study suggests that millions of American seniors could experience financial abuse as nearly one in five (19 percent) of adults age 40-64 reported they have an older friend or family member who has been a victim in the past. Of this 19 percent, more than half (55 percent) said the victims did not report the financial abuse.
The Safeguarding Our Seniors study highlights a lack of awareness about the sources of elder financial abuse. When asked where the biggest threats actually come from, the majority of both elders (80 percent) and family/friends of potential victims (69 percent) rated telemarketing contact as the most likely source of abuse followed by Internet scams (68 percent elders; 47 percent family/friends) and U.S. Mail solicitation (52 percent elders; 39 percent family/ friends).
Of those elders who reported experiencing financial abuse, the incident was more likely to have been perpetrated by a family member, friend, or caregiver (52 percent) than by a stranger (22 percent). This is consistent with previous studies suggesting that elder financial abuse is commonly committed by people familiar to the victim.2
Significant Impact, Expanding Target
For those who are victims, the Safeguarding Our Seniors study confirmed the impact is often significant. The study found an average financial loss of about$30,000 and more than 10 percent of victims said they suffered losses of$100,000 or more.
Unfortunately, aging, wealth, and decreasing mental capacity are factors that can make tomorrow’s elders a target for financial abuse. TheU.S. Census Bureau projects that more than 20 percent of the total population will be age 65 or older by 2030.3 Among this group, many will likely hold considerable wealth. Baby boomers control more than$16 trillion in household investable assets, according to a LIMRA 2011 report.4
Cognitive impairments or diminished capacity will also play an important role as this issue develops. Consider that more than five million Americans are currently living with Alzheimer’s disease.5
Taking Action
Supported by the findings from the Safeguarding Our Seniors study, Allianz Life created programs and materials to educate financial professionals and consumers about elder financial abuse:
-Preventing Elder Financial Abuse education course – This course helps financial professionals understand the scope of the problem and provides simple steps they can take to protect their clients. Available to financial professionals who work with Allianz Life, the Preventing Elder Financial Abuse course is one of many topics with support materials that Allianz Life offers to more than 20,000 financial professionals every year.
-Preventing Elder Financial Abuse Tip Sheet – This tip sheet from the Better Business Bureau contains red flags to watch for and tips for prevention, is now available via allianzlife.com/sos.
“As demographic trends point to a growing senior population, more people than ever before will be affected by elder financial abuse,” added White. “Allianz Life is committed to taking a leadership role in educating financial professionals, the community and employees about how to prevent elder financial abuse and being a part of the solution.”
