U.S. targets financial abuse of elderly
Americans over 60 lost at least $2.9 billion in 2010 to financial exploitation, a MetLife study. This 12% rise over two years is leading the Consumer Financial Protection Bureau to begin looking into the types of scams affecting older consumers, states the LA Times.
Federal regulators launched an investigation into the financial abuse of the elderly, citing a new report that advisors, planners, family members and others were ripping off seniors more than ever.
The rise in abusive tactics led the Consumer Financial Protection Bureau to begin looking into the types of scams affecting older Americans and coming up with the best ways to prevent them. A specific focus will be on the credentials of people who tout themselves as financial advisors.
A recent scam enticed senior citizens to put large amounts of savings into deferred annuities, reducing their savings to qualify for a particular federal veterans benefit. The veteran might get $1,000 a month from the benefit, but loses access to the cash for years. Meantime, the annuity salesperson earned a commission of 8% to 12%, she said.
The qualifications of financial advisors are important as new retirees must decide what to do with lump-sum 401(k) payouts and often must juggle many complex options. The ability to understand those options gets more difficult as people age.
As people get older, particularly up into their 80s ….they're just less able to process financial information. They're more likely to be trusting of people and they open themselves up to more abuse, which is perpetrated both by strangers and by caregivers and family members who are close to them.
Lawmakers included the Elder Justice Act in the 2010 healthcare reform law to coordinate federal efforts.Tags: elderly, financial abuse, financial Planners, scams, Senior citizens, Veterans Benefits