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Preventing elder financial abuse

Nearly everyone believes older adults are at risk for financial scams. They just don’t think it will happen to them, according to a new survey from Wells Fargo.

May 8, 2018

In Largo, Florida, where nearly one of every three residents is 65 or older, the effects of elder financial abuse are devastating.

Joel Quattlebaum, a police officer in Largo, has seen it firsthand: an elderly woman living out of her car; a retired teacher forced to sell her home and move into a modest apartment; a woman in an assisted living facility, on the brink of losing everything from lottery scams.

“We’ve seen people go bankrupt because of it,” Quattlebaum said. “Some get evicted. It’s bad.”

Nearly everyone (98 percent) agrees that older people are more susceptible to financial scams, but only 10 percent of older Americans feel that they themselves are at risk. This is according to a new Wells Fargo Elder Needs survey conducted by Versta Research1, which was released May 8 and conducted as part of a new public awareness campaign from Wells Fargo to help prevent the crime.

infographic showing 98 percent believe older people are at risk for financial scams but only 1 in 10 older Americans feel it will happen to them
Photo Credit: Wells Fargo

Financial abuse affects nearly one in five seniors, according to a 2016 Elder Investment Fraud and Financial Exploitation survey (PDF). The crime costs older Americans about $36.5 billion annually, according to True Link Financial.

Despite the appreciation of the severity and breadth of elder financial abuse, there seems to be a lack of awareness that the risk is personal, and close to home.

Realizing the risk

Only 9 percent of older adults in the Wells Fargo survey believe the perpetrators will be family. However, according to the National Center on Elder Abuse, family members, friends, and trusted persons — not strangers — account for 66 percent of all financial abuse.

Wells Fargo’s survey also found that most older Americans aren’t taking precautions, such as using automatic bill pay, having large transaction alerts sent to others, and locking checks or credit cards away, to protect themselves. And only one-third have talked to their children about their wishes if they became unable to manage their money.

Family members — not strangers — account for 66 percent of all financial abuse.

“Some older adults may struggle to see the need to plan for issues they may face as a result of aging,” said Ronald Long, head of Regulatory Affairs and Elder Client Initiatives at Wells Fargo Advisors. “They spend a lifetime preparing for retirement, but then fail to plan to see themselves through retirement. This unwillingness to plan and have hard conversations about aging is increasing senior vulnerability and leaving gaps in protection.”

Wells Fargo was one of the first in financial services to act as a mandatory reporter of any suspected elder financial abuse or exploitation, he said.

Other ways the company is trying to help its customers: teaching money management skills through its senior curriculum of Hands on Banking® and offering free financial education programs at Wells Fargo Advisors. In 2014, Wells Fargo Advisors also created an Elder Client Initiatives team to follow up on suspected cases of financial abuse to customers or clients flagged by financial advisors, bankers, or other team members.

Team members throughout Wells Fargo also receive annual training in how to identify and stop potential fraud and exploitation, Long said.

“Our eyes are open to it,” said Mary Tucker, who manages the Elder Client Initiatives team at Wells Fargo Advisors. “But there are so many people who don’t want to look at what’s happening.”

Multiple forms of abuse

“Every single case, every scenario is different,” said Amberly Duke, a Wells Fargo Advisors compliance consultant on the Elder Clients Initiatives team.

Predators use social media to exploit loneliness, and, in some cases, have even gained the trust of their victims through church groups, she said. Adult children sometimes misuse powers of attorney to tap into their parent’s life savings, and caregivers might add their names to a victim’s account to gain access.

There are some common threads among the different types of abuse, Duke said. They typically involve trusting victims who hand over their bank information to strangers or ill-intended caregivers, friends, or family members. Perpetrators often manipulate victims into thinking large payments of money will lead to love or belonging. Loneliness is a common vulnerability.

“It’s normally elderly clients who have lost a spouse or don’t have any family members,” said Joan Perry, a regional support center manager for Wells Fargo Advisors. “They want the companionship — any type of companionship.”

When a 92-year-old customer came into a Wells Fargo branch in Zephyrhills, Florida, asking to take out loans to help a family member pay medical expenses, Huss Zaidi, the branch manager, was immediately concerned.

“I said, ‘Let me talk to the family member. Maybe we could expedite getting the money to them,’” Zaidi recalled. When she refused, he knew there was a problem — so he alerted the customer’s financial advisor, who contacted family members and authorities.

Her two adult children soon flew into town, only to learn that their mother had taken out more than $100,000 from bank and brokerage accounts and was sending the cash via money orders to an unknown location. Zaidi never learned to whom.

In his 10 years working at Wells Fargo, Zaidi has seen hundreds of questionable situations that required having frank conversations with customers and follow-ups with family members, and even the police.

“The problem of elder financial abuse has definitely gotten worse,” he said. “People are getting more sophisticated in the kind of fraud they try to commit.”

A silent crime

Most elder financial abuse victims keep quiet, out of embarrassment or an unwillingness to report family members or loved ones. As few as one in 44 cases are reported to authorities, according to the National Adult Protective Services Association.

“They don’t want to report it because the media will know, or their neighbors will know,” said Mary Seeger, a Wells Fargo Advisors regional supervisor in Rochester, Minnesota. While many situations do involve scams from strangers, she said, most cases involve a perpetrator the victim knows.

“It’s mostly family,” Seeger said. “And then the sweethearts. Those have been the two big ones.”

One client, Seeger said, lost tens of thousands of dollars to a son who misused a power of attorney for financial gain. Another client fell in love with a former student who began spending his savings through ATM transactions and lavish purchases.

The man’s adult children had been concerned for some time about the relationship, she said.

“They ended up going to court for guardianship,” Seeger said. “The judge had to step in and tell the lady that she needed to back off and stay away from him.”

The best protection against elder financial abuse, in all of its forms, is to plan, Quattlebaum said.

“As people begin to age, cognitive loss happens. If they enter those waters without having a plan, they’re floundering about on what to do next,” he said. “Who is going to help them when they need help?”

Preventing elder financial abuse

To reduce your risk of becoming victimized by financial abuse and exploitation:

Graphic: Talk with trustworthy family members about your financial plans

“When a parent doesn’t plan ahead and talk about what their wishes are ahead of time, they put their children in a terrible position,” said Jodi Sammari, a Wells Fargo Advisors compliance consultant on the Elder Client Initiatives team.

Graphic: Have a

This person can be a resource for financial institutions if you’re unreachable or start exhibiting unusual behavior with spending habits. The Financial Industry Regulatory Authority requires financial advisors to make reasonable efforts to get the name and contact information of a designated trusted person for a client’s account.

Graphic: Keep legal documents updated

Keep legal documents organized and in place — especially wills, an advance healthcare directive, and powers of attorney for financial matters and for health care.

Graphic: Make it easy to spot irregular financial transactions

Sign up for direct deposit and automatic bill pay, have automatic alerts of large transactions sent to a trustworthy individual, keep checks and credit cards locked away, and check your credit report annually.

Graphic: Avoid isolation

Stay connected to others through social activities. “If they stay isolated, scammers take hold,” Quattlebaum said.


1Versta Research conducted a national survey for Wells Fargo of 784 older investors (ages 60+, with at least $25,000 in investable assets) and a similar survey of 798 adult children (ages 45 to 59, with at least $25,000 in investable assets) who communicate with a parent regularly. The survey included an oversample of investors with at least $1M in assets.

Wells Fargo Advisors is a trade name used by Wells Fargo Clearing Services, LLC, Member SIPC, a registered broker dealer and non-bank affiliate of Wells Fargo & Company.

Wells Fargo Bank, N.A. is a bank affiliate of Wells Fargo & Company.

Investment and insurance products: NOT FDIC-Insured NO Bank Guarantee MAY Lose Value

Contributors: Wayne Thompson and Christopher Frers
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