Fleecing seniors: Scammers target the elderly for financial abuse

Published: Sunday, July 15 2012 4:00 p.m. MDT

Editor's note: Three audio files of actual scams are included at the end of this story.

SALT LAKE CITY — Retired educator Nancy McCormick has told the story often at senior centers across Utah, but she never gets used to the "particular evil" that underpins this bit of family history.

A much-loved elderly relative was bilked repeatedly by telephone out of an astounding amount of money, a few thousand dollars at a time. First the caller said the relative had won a lottery and had to pay fees to collect. The money was sent. There were more costs, over and over. The family found out and the relative promised not to send any more. Then a caller claimed to be an FBI agent and the relative turned over receipts for the money that had been previously sent, effectively destroying evidence fraud had occurred.

McCormick, who tells the story as part of AARP's efforts to prevent fraud and help senior citizens build a strong financial foundation, refers to the relative as "Pat" to protect the individual from embarrassment and further abuse by scammers.

Pat was like a toy for tormentors, the phone ringing in Pat's room at the residential center from 7:30 a.m. to nightfall. The family watched from afar in shock as Pat was fleeced, repeatedly, despite their efforts. One caller claimed to be from the IRS, willing to help Pat get the previously promised winnings, but there would be a tracking fee. Another threatened to arrest Pat. As family tried to extricate Pat from the phantom callers, someone posed as Pat's then-dead spouse to have the phone company change Pat's number. Only scammers, temporarily, could call.

Eventually, the court appointed a guardian. A bank now monitors Pat's account, limiting spending money while paying fixed expenses. Pat's personal relationships with family have suffered. The law enforcement officials who first found the problem while tracking criminal activity said Pat's money was funneled to illegal sex and drug trades.

Elder financial abuse was called the "crime of the 21st century" in a recent joint study by the MetLife Mature Market Institute, the Center for Gerontology at Virginia Tech and the National Committee for the Prevention of Elder Abuse. They said America's senior citizens lost at least $2.9 billion in 2010, a 12 percent jump from 2008's estimates.

Experts say a victim's embarrassment or confusion, or the fact that the perpetrator is sometimes a close relative or friend, means many cases never get reported. Still, a recent Utah study said as much as $1 million a day is stolen from the state's seniors, most taken by relatives. Other experts say strangers take just over half.

Passage in 2010 of the federal Elder Justice Act should focus more effort on education, prevention and better understanding of financial exploitation. In June, Health and Human Services Secretary Kathleen Sebelius announced a new federal elder justice coordination team to improve how financial abuse is battled. It will also study the most effective state adult protective service programs.

Up close and very personal

Friends and kin are most likely to exploit seniors by getting the house deed signed over, by tapping into a joint bank account or through a general financial power of attorney, says Jilenne Gunther, legal services developer in the Utah Division of Aging and Adult Services, who wrote "The 2010 Utah Cost of Financial Exploitation."

Prescott Cole, senior staff attorney at San Francisco-based California Advocates for Nursing Home Reform, which tackles elderly abuse, says some family members and caregivers are just venal, but sometimes it's more complicated.

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