Netflix NFLX, -0.60% recently released I Care A Lot, a movie that centers on a seemingly holy businessman running a thriving business as a court appointed guardian for seniors who can no longer manage their own care. But there’s a catch: The character systematically defrauds her vulnerable clients, conspires with doctors and nursing home administrators to identify susceptible targets, takes legal control of their lives, and then auction off their assets to pay herself for her services.
The movie has been a success. According to Esquire.com, I Care A Lot jumped into Netflix’s top 10, and its main protagonist, Rosamund Pike, won a Golden Globe for her performance. The exact nature of the scam behind I Care A Lot may be far-fetched, but the premise of financial elder abuse is grounded in reality and deserves much more attention and consideration. It remains a widespread and costly problem that is estimated to rob America’s vulnerable seniors billions of dollars a year. In today’s environment, where new scams have emerged and social distancing has increased the isolation of older people, taking steps to protect the financial health of older people from abuse is critical. According to a 2019 AIG Life & Retirement survey, more than half of Americans (53%) say that financial abuse by older people is likely to compromise their ability to live a long and financially secure life and nearly two-thirds ( 65%) say the same for a close family member or friend. Read: Criminals are coming for their coronavirus and stimulus checks To increase this concern, almost half (47%) of people 65 and older manage their finances, from paying bills to managing investments, completely on their own . As a result, many become vulnerable to financial abuse, either through financial scams perpetrated by strangers or financial exploitation by family or friends. With 10,000 Americans turning 65 every day, the number of people living with cognitive impairment is reaching unprecedented levels, leaving many vulnerable to manipulation, deception and abuse. Given the reality of cognitive decline, financial isolation carries real risks. We believe that by building a system of checks and balances, older people (along with their families and financial advisers) can more effectively safeguard their finances from financial exploitation, manipulation, or recklessness. Families should consider having conversations as soon as possible and involving various parties to build a protective infrastructure. Financial advisers can serve as an additional line of defense, acting as an impartial third party, staying alert for red flags, facilitating family conversations, and using protection tools like trusted contact and power of attorney. Employers can also educate employees and retirees to guard against potential scam threats, reducing stress and increasing productivity. Some common types of financial exploitation of seniors to watch out for include: IRS Impersonation Scams – Calls from the IRS claiming they will arrest you if you don’t pay the missing taxes. Be aware that government agencies rarely call people. If they do, it will be only after sending you a letter first or calling you back. If the alleged government agency calls and requests confidential personal information or a wire transfer, it is a scam. Also remember not to trust caller ID, scammers can disguise your number. Automated calls and unsolicited phone calls: According to the Federal Communications Commission, nearly 2.4 billion robocalls are made each month. Today, phone calls can be digitized and routed from anywhere in the world. Do not provide personal information unless you started the call. Lottery / Sweepstakes Scams: Seniors are led to believe that they have won a lottery and must pay a fee to collect their winnings. After seniors send money by prepaid debit card, wire transfer, money order, or cash, they receive 50-100 phone calls a day demanding more money. Grandparent Scams – Imposters posing as your grandchild or an authority figure holding you back. They claim that the grandson is in trouble and needs money to help with an emergency, tricking the grandparents into sending them money. The scammers say they shouldn’t alert the grandson’s parents. Ask a few simple questions that only your grandchild would know the answer to. COVID-19 Scams: The Federal Trade Commission has sounded the alarm about products that falsely claim to treat or prevent the novel coronavirus, as well as bogus charities. Beware of alleged government calls to set up COVID-19 tests and avoid phishing emails promoting vaccines and home test kits. Whether the family lives minutes away or on the other side of the country, staying in touch with an elderly loved one can help prevent older people’s isolation, ensure that they can trust the family if they fall victim to scammers, and help the family detect signs of cognitive decline or abuse. Michele Kryger is director of AIG’s Senior and Vulnerable Care Unit.