Of all forms of elder abuse, there is evidence that financial elder abuse may be the most common. According to the most recent estimates from the U.S. Securities and Exchange Commission, anywhere from 2.7 to 6.6 percent of seniors experience some form of financial exploitation, although the true number is likely much higher due to widespread underreporting. In the popular imagination, financial elder abuse typically involves theft. While theft is one of the main forms of financial elder abuse, the range of financial elder abuse is much broader than outright theft, encompassing sophisticated schemes and frauds designed to exploit the elderly for financial gain.
Some lesser-known — but by no means rare — types of financial abuse directed at the elderly are outlined below.
Securities fraud occurs when a stockbroker, promoter, firm, corporation, investment bank, or insurance agent or retirement planner induces a senior to purchase the security on the basis of false information. More specific types of securities fraud include:
Probate fraud is a type of financial elder abuse in which the perpetrator misrepresents a fact to the victim to induce the victim to change his or her will to benefit the perpetrator. For example, a perpetrator of probate fraud might lie to the victim, telling him or her that a certain family member is dead and that that family member’s portion should go to the perpetrator. It can also occur when the perpetrator surreptitiously changes the terms of the victim’s will or induces his or her signature on a false will.
An annuity is a long-term insurance product that promises an income stream to the policyholder after a certain period of time. For example, a deferred annuity or a fixed annuity generally precludes withdrawals for at least 10-20 years and charges an exorbitant fee to withdraw early (sometimes as high as 15%). The long waiting periods required before receiving the benefits of an annuity make them an inappropriate financial product for all consumers, especially seniors. Annuity fraud occurs when a broker sells a senior a deferred annuity to earn a commission while obscuring the full terms of the agreement or selling a contract that is unsuitable to the consumer.
Insurance fraud is a type of fraud committed against policyholders by insurance companies that normally involves “bad faith.” Examples of bad faith insurance practices include selling inappropriate policies to the victim, failing to disclose the full terms of a policy to the victim, misrepresenting the value of a policy’s benefits, falsifying or forging applications and suitability questionnaires, failing to acknowledge or make a payment on a claim, and increasing premiums to unconscionable amounts.
If you suspect you or a family member has been the victim of financial elder abuse, there is help available. It is recommended to contact an attorney that specializes in elder law, as they would be the most qualified to assist with your case.
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