Speak with a Partner

content-image

John W. Sleeting

Managing Partner – Family Office Services

Start a Conversation

content-image

Karie M. OConnor,
CIMA®, CPFA®, AIFA®, QKA®

Director – Institutional Advisory Services

Speak with a Partner

content-image

Jeffrey P. DeHaan, CFP®

Managing Partner – Private Wealth Management

Financial Exploitation and Senior Citizens

James Chapman March 04, 2024

Financial exploitation and elder abuse represent challenges that many seniors confront, posing grave threats to their financial stability and overall well-being. As these schemes become greater in both frequency and complexity, it is important to be aware of three prevalent forms of financial exploitation: telephone scams, home improvement scams, and sadly, family member exploitation. Each requires nuanced understanding and proactive countermeasures.

Telephone scams, ubiquitous in their occurrence, target vulnerable seniors through sophisticated ploys via phone calls. Scammers adeptly impersonate authoritative figures from government entities, financial institutions, or utility providers, coercing unsuspecting seniors into divulging sensitive personal or financial information. For instance, seniors may receive alarming calls professing to be from the IRS, demanding immediate payment for fictitious tax liabilities. Adding additional complexity as of late, is the increased risk of Artificial Intelligence (AI) based scams. AI is able to replicate an individual’s voice to an almost indistinguishable realism, enabling people to be tricked into thinking they are on the phone with someone else. To fortify defenses against such schemes, seniors and their families must cultivate a healthy skepticism towards unsolicited callers, emphasizing the importance of never disclosing personal information over the phone and rigorously verifying the legitimacy of any incoming communication by directly contacting the purported institution.

Home improvement scams, preying upon seniors’ desire for security and comfort in their dwellings, ensnare unsuspecting victims through deceptive offers of unnecessary or exorbitantly priced home repair services. Deceitful contractors employ high-pressure tactics to extract upfront payments for repairs that may be shoddily executed or grossly inflated in cost. Seniors can shield themselves from such exploitation by exercising due diligence in vetting contractors, soliciting multiple estimates, and steadfastly refusing to remit payment in full before satisfactory completion of contracted services. Furthermore, vigilant family members can play a pivotal role in safeguarding seniors’ interests by remaining watchful for suspicious solicitations and intervening, when necessary, to ensure seniors make informed decisions regarding home maintenance and repairs.

Family member exploitation, a distressing manifestation of abuse of trust within familial bonds, represents a pervasive threat to seniors’ financial autonomy. Insidious perpetrators, often entrusted family members or caregivers, exploit their proximity to an elderly relative’s finances for illicit personal gain. In egregious scenarios, a trusted family member may cunningly manipulate an elderly parent into granting power of attorney, subsequently wielding this authority to misappropriate funds from bank accounts or unlawfully liquidate assets. Mitigating this peril necessitates seniors establishing unequivocal financial boundaries and contemplating the engagement of impartial third-party advisors, such as financial planners or legal professionals, to provide guidance and oversight in significant financial decisions.

In summary, combating financial exploitation and elder abuse necessitates a multifaceted and proactive approach. Through comprehensive education, diligent vigilance, and judicious decision-making, seniors and their families can fortify defenses against financial predation, preserving their financial security and safeguarding their golden years with dignity and resilience.

James Chapman

disclosure

THIS COMMENTARY HAS BEEN PREPARED BY CLEARWATER CAPITAL PARTNERS. THE OPINIONS VOICED IN THIS MATERIAL ARE FOR GENERAL INFORMATION ONLY AND ARE NOT INTENDED TO PROVIDE OR BE CONSTRUED AS PROVIDING LEGAL, ACCOUNTING, OR SPECIFIC INVESTMENT ADVICE OR RECOMMENDATIONS FOR ANY INDIVIDUAL. ALL ECONOMIC DATA IS DERIVED FROM PUBLIC SOURCES BELIEVED TO BE RELIABLE. TO DETERMINE WHICH INVESTMENTS MAY BE APPROPRIATE FOR YOU, PLEASE CONSULT WITH US PRIOR TO INVESTING. INVESTING INVOLVES RISK WHICH MAY INCLUDE LOSS OF PRINCIPAL.

This material is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities, insurance products, or to adopt any investment strategy. The opinions expressed are as of the date of writing and may change as subsequent conditions vary. The information and opinions contained in this material are derived from proprietary and nonproprietary sources deemed by Clearwater Capital Partners to be reliable, are not necessarily all-inclusive and are not guaranteed as to accuracy. Past performance is no guarantee of future results. There is no guarantee that any forecasts made will come to pass. Reliance upon information in this material is at the sole discretion of the reader. Investment involves risks. International investing involves additional risks, including risks related to foreign currency, limited liquidity, less government regulation and the possibility of substantial volatility due to adverse political, economic or other developments. Index performance is shown for illustrative purposes only. You cannot invest directly in an index. S&P 500 is a registered trademark of Standard & Poor’s Financial Services, a division of S&P Global (“S&P”)  DOW JONES, DJ, DJIA and DOW JONES INDUSTRIAL AVERAGE are registered trademarks of Dow Jones Trademark Holdings (“Dow Jones”). The two main risks related to fixed-income investing are interest rate risk and credit risk. Typically, when interest rates rise, there is a corresponding decline in the market value of bonds. Credit risk refers to the possibility that the issuer of the bond will not be able to make principal and interest payments.

"*" indicates required fields

Schedule Your First Meeting


Name*