Warning Signs

The number of older individuals living in the United States is growing as a percentage of the total population, and consequently, more people are suffering from Alzheimer's disease and other forms of dementia.1 A research report by the AARP Public Policy Institute ("AARP") found that once an individual begins to suffer cognitive impairment, financial skills and judgment are some of the first abilities to decline.2 And, while cognitive decline can be subtle at first, it can advance rapidly.3 Older Americans may live hundreds of miles from their grown children and other relatives. They may have suffered the loss of a spouse, and that spouse may have handled the finances. Older adults may find themselves increasingly isolated, all at a time in their lives when the incidence of Alzheimer's disease and other forms of dementia grows. These developments may leave seniors vulnerable to fraud.4 Con artists frequently target seniors for fraud.5 Scammers may be interested in the savings seniors have accumulated throughout their lives while preparing for retirement.6 They may seek to exploit seniors' feelings of loneliness and isolation.7 Sometimes, the fraud is even committed by a senior's caregiver. Therefore, it is advisable that family and friends of seniors be aware of the warning signs of fraud, especially before seniors experience cognitive impairment.

Warning Signs

Scam artists may use sophisticated techniques to defraud their victims. In the hopes of gaining their victim's trust, con artists may learn the names of their victim's children, grandchildren and former spouses. They may phone daily and act concerned. Furthermore, scam artists have used extraordinary measures to disguise their scams as legitimate business transactions. For instance, the Federal Trade Commission has found that con artists use special packaging to make their mailings look legitimate as if they were sent from a well-known sweepstakes company or even a government organization.8 Consequently, older Americans may not be aware that they are being exploited or, if they realize it, they may be ashamed.9 Furthermore, seniors may fear losing their independence if they report the fraud.10 These factors may have contributed to a finding by AARP that older Americans are less likely to report that they have been victims of fraud.11

The modern day scammer can be relentless and may target financially disadvantaged individuals until their victims have nothing left. This type of scam is called "last dollar fraud," meaning the crime doesn't stop until the victim is penniless.12 The effects of this type of fraud can be devastating.

Start your dialog with parents, older relatives and loved ones today. Initially, they might be concerned by your heightened interest in their personal affairs. Take the time to explain to them why you are concerned and what steps you would like to take, with their permission, to protect their finances. With your loved one's consent, you may be able to identify the warning signs of financial abuse and fraud using the following steps.

• Start by checking the phone log and find out who's been calling. Look for international calls or repeat calls from the same domestic numbers. Scammers are increasingly disguising their real identities and phone numbers so people will pick up the phone.13 They're using the Internet and new technology to mask the call's true origin, making it appear as though international calls are coming from somewhere within the United States, or even from a government agency.14
• Monitor financial accounts for unusual activity. Look for recurring payments to unknown people or businesses. Explain you are concerned about your loved one's well-being; ask to look at checkbooks and other records. Look for payments to wire-transfer services or patterns of checks made out to cash. Payments to con artists may start out small but can quickly increase in size and dollar amount.15
• Go through letters and packages in your loved one's household. Be alert to phony prize notification letters or other indications of playing foreign lotteries or sweepstakes.
• If the phone rings repeatedly during your visit, answer the call yourself. If you don't recognize the voice, ask who is calling. Be suspicious if he or she hangs up rather than responds to your question.
• If you notice that your loved one's living conditions are below his or her financial means, bills are past due, or a caregiver has taken steps to isolate your loved one, then the caregiver may be taking advantage of your loved one.16

If you spot warning signs, don't jump to conclusions. Investigate further to confirm your suspicions.

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• 1See http://ije.oxfordjournals.org/content/31/4/776.full.
• 2Naomi Karp, Protecting Older Investors: The Challenge of Diminished Capacity, AARP Public Policy Institute, p. 1 (Nov. 2011).
• 3See id.
• 4See id.
• 5See http://www.ftc.gov/os/2000/08/agingtestimony.htm.
• 6See http://www.ftc.gov/reports/Fraud/fraudcon.shtm.
• 7See http://www.agingcare.com/Articles/elderly-identity-theft-victims-frauds-scams-cons-139206.htm.
• 8See http://www.ftc.gov/reports/Fraud/fraudcon.shtm.
• 9See http://www.ag.nd.gov/CPAT/PDFFiles/abuse.pdf.
• 10See http://www.cops.usdoj.gov/Publications/e07042443.pdf.
• 11See Karla Pak, AARP Foundation National Fraud Victim Study, p. 5 (Mar. 2011).
• 12See http://www.ftc.gov/opa/reporter/finance/lastdollar.shtml.
• 13See http://www.ftc.gov/opa/2012/08/sweepstakes.shtm.
• 14See id.
• 15See http://www.ftc.gov/os/2000/08/agingtestimony.htm.
• 16See http://www.ag.nd.gov/CPAT/PDFFiles/abuse.pdf.