Survey: One in five seniors swindled in financial fraud

Survey: One in five seniors - 7 million - swindled in financial fraudOne of out every five citizens 65 or older -- more than 7.3 million Americans -- have been swindled, according to a survey released today by the Investor Protection Trust (IPT), a nonprofit organization dedicated to investor education.

(See the top five scams targeting seniors.)

To combat this problem, the IPT joined forces with state securities regulators, adult protective services workers and medical professionals to help physicians spot older Americans especially susceptible to investment fraud.

The survey, released to mark World Elder Abuse Awareness Day, questioned 2,022 American adults -- including 706 adult children with at least one parent aged 65 or older and 590 adults who are aged 65 or older and have children. Some of the survey's key findings include the following:
  • Half of older Americans exhibit one or more of the warning signs of financial victimization (such as being pitched to buy some product), while only 19% of adult children believe their parents are being pressured in such a fashion.
  • Almost half those aged 65 or over (44%) got at least two out of four questions about basic investment knowledge wrong.
  • Roughly one in three older Americans (31%) say they are vulnerable in one or more ways to potential financial victimization.
  • Four out of 10 children of parents 65 or older are "very" or "somewhat" worried that their parents "have already become or will become less able to handle their personal finances over time."
  • Only 5% of adult children who are in touch with their parents' doctors have ever been cautioned by them about their parent's ability to handle money. But of that same group, nearly one in five (19%) say a health care provider mentioned concerns about their parents' mental comprehension.
The IPT says the survey results emphasize the need for what it calls the "Elder Investment Fraud and Financial Exploitation" prevention campaign, to train medical professionals to identify older Americans at risk of financial abuse and refer any suspected investment fraud to state securities regulators and local Adult Protective Services (APS) professionals.

"We now know that a shockingly large number of older Americans are already victims of financial swindles and millions more are in danger of being exploited in such a fashion," IPT President and CEO Don Blandin said during a conference call.

"Given that front-line medical professionals who deal every day with older Americans are ideally positioned to spot the impaired mental capacity that can leave seniors vulnerable to financial abuse, our new program seeks to inform doctors, nurses and others about the warning signs of elder investment fraud and financial exploitation," Blandin added.

Of special concern are seniors with some form of mental impairment. The IPT cited a 2008 Duke University study that found some 35% of the 25 million people over age 71 in the U.S. either have mild cognitive impairment (MCI) or Alzheimer's disease -- making them highly vulnerable to investment fraud and other forms of financial exploitation by con artists and even family members. And victims of fraud often lose more than just their money.

"Research shows that [financial] abuse victims die sooner than their contemporaries," National Adult Protective Services Association Executive Director Kathleen Quinn said during a conference call. Adult Protective Services professionals are the first responders to elder financial abuse, so they see the devastation these crimes wreak in older persons' lives every day."

The program was developed with a grant from the IPT by clinicians and geriatrics faculty from the Baylor College of Medicine in Houston, Tex., and was implemented during a successful pilot program in that state. Organizations joining the IPT in the new national campaign program include the North American Securities Administrators Association (NASAA), NAPSA, the American Academy of Family Physicians, the National Area Health Education Center Organization and the National Association of Geriatric Education Centers.

For more information, visit the IPT site.

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