As the baby boomer population grays, elder financial abuse has become more prevalent in today’s world. Elderly fraud victims can easily become confused by information on the internet, and are often trusting or cognitively impaired when scam merchants come calling at their door.
According to a study on elder financial abuse from 2015, 37% of seniors are affected by elder abuse in any given five-year period. Of those that were victims of fraud, 1.8% lost their home, 4.2% skipped meals as a result and 6.7% skipped medical care. An estimated 954,000 seniors who have been exploited suffer as a result with loss of independence, depression and anxiety. And there may be many more cases that go unreported, as the elderly are all too often targeted by family members and caretakers.
Broker misconduct and investment scams
Some of the worst abuses occur when brokers illegally profits from a client’s account or inappropriately invests a client’s money. Some broker-dealer abuses include:
- Churning, which occurs when a stockbroker generates excessive trading on a client’s account, boosting commissions but also creating investment losses due to added broker fees and poorly timed trades
- Unauthorized trading, in which the broker executes trades without the client’s permission or authorization
- Misrepresentation and omission, when a broker intentionally withholds or gives the wrong information
- Unsuitability, in which the broker gives recommendations inappropriate to the client’s objectives
- Misappropriation, in which a broker steals the client’s assets – thefts are often disguised by providing the client with false account statements, wire transfers to third party nominee accounts (surreptitiously controlled by the broker) and represented to the client as unique outside investment opportunities.
Investment scams often target the elderly on the internet, aggressively promising huge financial returns on securities investments such as oil and gas leases, limited partnerships and stocks and bonds.
Steps to prevent elder abuse
Part of a senior citizen’s retirement plan should include a system of checks and balances, which will include monitoring suspicious activity and taking timely action. Some steps that a senior citizen can also take to protect financial transactions include:
- Automating bills and deposits
- Using credit cards instead of cash
- Having trusted family members oversee the senior’s finances
- Creating a trust to protect assets
- Appointing a guardian
If you or a loved one has been a victim of fraud, it is essential to have skilled New York City legal counsel to help you recoup your losses and obtain the maximum recovery by holding the wrongdoers (and the firm they work for ) accountable.