Financial Elder Abuse: Hot Off the Presses

I’ve worked with Pam Teaster, Professor at Virginia Polytechnic Institute and State University, and president of the National Committee for the Prevention of Elder Abuse (NCPEA), on a couple of research projects over the years and have always been impressed by her readiness to design studies that answer questions practitioners most want the answers to. It’s not easy to translate practice wisdom or professionals’ hunches into conceptual frameworks and designs that pass scientific muster. Which is why practice-based studies often end up employing such dubious sounding methods as “convenience” and “snowball” samples. Still, they yield insights that are enormously helpful to the field.

Pam’s recently released study on financial exploitation breaks new ground methods-wise and sheds light on how financial abuse is being addressed by the media around the country. Broken Trust: Elders, Family and Finances was a collaboration of NCPEA, Virginia Polytech, and the MetLife Mature Market Institute, the research branch of the insurance company. Pam and her colleague Karen Roberto analyzed financial abuse cases identified through the electronic clipping service operated by the National Association of Adult Protective Services for the Administration on Aging’s National Center on Elder Abuse. The service draws from Google and Yahoo scans of billions of Web pages a day. The search yielded 266 articles on financial abuse that were posted between April and June of 2008. From these, they collected information about victims and perpetrators, their relationships, victims’ losses, and case outcomes. They also reviewed the academic and trade literature on financial abuse and listed promising practices drawn from a database run by NCEA.

I was a little surprised to see “Medicare/Medicaid fraud” among the forms of abuse that were included since the term typically refers to situations where it’s the “system” that’s ripped off, not program beneficiaries. Like many in the field, I worry about defining elder abuse so broadly that the term becomes meaningless, and I’m always on the lookout for types of abuse that we can exclude. But the example cited in the report, of a physician who performed unnecessary surgeries on 865 elders and charged Medicare or Medicaid over $11 million for them, was certainly compelling. Although it might be argued that it was the system that suffered the financial loss, there’s no denying the trauma and suffering that the patients must have endured. Professionals and courts alike are struggling with the question of whether or not physical abuse, neglect, or other mistreatment, when committed for profit, also constitutes financial abuse. Other forms of financial abuse mentioned in the study include telemarketing fraud, repair and contracting scams, "sweetheart scams," fraudulent advice from insurance salespeople and stockbrokers, abuse of powers of attorney and guardianship, identity theft, and Internet "phishing."

Among the findings that are already being widely cited is the estimate that elder financial abuse costs older Americans at least $2.6 billion a year. The figure was derived by annualizing the total losses reported during the 3-month study period ($400 million) and assuming that the losses in the 40% of cases where no dollar figure was provided were comparable. I found it interesting that the largest single category of abusers was trusted professionals, which includes attorneys and fiduciaries, who accounted for 18% of the cases. They were followed respectively by family members (17%), non-agency caregivers (11%), and agency caregivers (9%). Also of interest was that almost 2/3 of the victims (65%) were women.

I asked Pam what, if anything, she found surprising. She cited the severity and impact of the abuse. “One victim likened the exploitation to being raped. I can easily see it. It would follow that the health effects and the very ability of a person to even address the effects due to diminished resources would be equally devastating.”

She also noted victims’ diversity. “While there are typologies of victims, and we tied to make one, there is enough variance to indicate that healthy and frail alike--can fall prey to exploitation.”

MetLife’s Mature Market Institute, which is directed by Sandy Timmerman, spearheads research, national partnerships, and educational materials for “those in, approaching, or caring for those in the mature market.” The full study is available on the Institute’s website at 
www.maturemarketinstitute.

For more on elder financial abuse, including identity theft against elders, undue influence, and mass marketing fraud, visit my Web site at http://lisanerenberg.com/learn/learn.html.

Secrets in America: New Documentary Focuses on Elder Financial Abuse

By the time David Jones emailed me to say that “our” film was finished, I’d forgotten all about it. It was well over a year since I’d met Stanislaus County’s Communications Director and it had taken that long to secure the funds and produce the half-hour long Secrets in America. With $12,000 in grants from the Stanislaus Community Foundation and Kaiser Permanente, David used friends and volunteers to shoot footage from San Francisco to Washington, D.C.

Despite the delays, the film is very timely, covering issues like predatory lending, lottery scams, and the sale of overpriced or worthless deferred annuities and reverse mortgages.

The film packs a powerful “neighbors looking out for neighbors” message through the account of Telvina Dias, who let two home repair cons into her home and was intimidated into writing them a check for a $2,500. Dias is exuberant as she describes how police, called by vigilant neighbor Jim Ross, nabbed the crooks. They’d approached Ross earlier, and he’d been watching Dias’ ordeal unfold. The film also emphasizes the importance of families looking out for elderly members and elders staying engaged with friends.

Actor Doris Roberts, best known for “Everybody Loves Raymond” makes an appearance. Roberts has participated in other Stanislaus County anti-abuse events and testified before Congress about elder abuse and ageism. You may recognize some other familiar faces.

One hundred DVDs were produced for senior centers, retirement communities, churches, and other venues; and nonprofit organizations can get copies for free. David also plans to pitch the film to PBS affiliates. To view it, click Secrets in America.

Fighting Back Against Financial Crime

Sometimes it seems like we're fighting a losing battle against increasingly sophisticated fraud perps. But there have been some inroads, and I thought it was time for some good news.

My hometown paper, the St. Paul Pioneer Press, recently reported on a lawsuit filed by Minnesota Attorney General Lori Swanson against the giant international life insurance company Allianz for pressuring seniors into buying deferred annuities. Although good for some people, deferred annuities are bad for seniors who can't afford to have their money tied up or who are likely to die before the maturity date. In October, Allianz and the state settled, allowing more than 7,000 Minnesotans to get their money back for annuities they'd purchased, plus interest in some cases. Swanson has also filed a lawsuit against American Family Legal Plan and Heritage Marketing and Insurance Services for selling elderly people living trusts and annuities that don't make financial sense. According to Swanson, "They scare the begeezers out of senior citizens" by suggesting they won't be able to pass their savings on to relatives without giant penalties unless they invest their money in certain ways. Heritage agents are also trained to discourage elderly prospective customers from consulting with their children or financial advisers about the policies they're considering. For more, see Watchdog.

At the national level:

In September, the Securities and Exchange Commission issued a report on "free lunch" investment seminars for seniors based on a year-long study it conducted in collaboration with the Financial Industry Regulatory Authority (FINRA) and state securities regulators. Among the key findings was that 100% of the "seminars" reviewed were actually sales presentations, despite the fact that many were advertised as educational workshops or that participants had been assured that nothing would be sold. In fact, attendees were encouraged to open new accounts and buy investment products, if not at the seminars themselves, then during follow-up contacts. For more, see SEC.

And recently, the National Adult Protective Services Association (NAPSA) joined forces with California Advocates for Nursing Home Reform (CANHR) and the Women’s Institute for a Secure Retirement (WISER) to create a new coalition, CEASE, to address annuity fraud, trust mills, and other forms of financial abuse (CEASE is a rough acronym for Coalition to End Elder Financial Abuse). CANHR has been sponsoring groundbreaking consumer protection legislation for years, and WISER develops information on financial issues. In recent testimony before the Senate Special Committee on Aging, CANHR attorney Prescott Cole cited a 92-year-old client who was talked into purchasing a $650,000 annuity that doesn’t mature until the year 2063.

Beginning on November 1, the Experian credit bureau will join with Trans Union in offering free credit freezes to victims of identity theft. For other customers, it will cost $10 to implement the freezes and $10 to temporarily or permanently remove them, unless state law mandates otherwise. The service is available to consumers in all 50 states and the District of Columbia

Last month, CBC produced an excellent program on Canadian scams against elders:

In Canadian Senior Scams, reporter Armen Keteyian takes viewers inside a Montreal "boiler room" to show how con artists operate. He also interviews Yve LeBlanc of the Royal Canadian Mounted Police; Doug Shadel who runs a call center in Seattle that warns seniors they've been target, and Zack, a working con artist.

The follow-up segment, "On the Sucker List," focuses on how scammers get hold of elders' names in the first place. In it, Zack assures us that those who sell lists with names like "Elderly Opportunity Seekers" and "Suffering Seniors" know exactly what they're being used for (for more on "information trafficking," see Predators and Politics). Also featured is U.S. Postal Inspector Timothy Mahoney who tracks down suppliers of "leads."

And finally, last month I updated my Web site to include a fact sheet on "mass marketing fraud," a term used to describe the various techniques that perpetrators use to target and defraud people using the phone, Internet, and mail. See Mass Marketing Fraud.

Synchronicity, Plumbers and Elder Abuse

Yesterday, I was composing a laundry list of the various disciplines and professionals that have a role to play in stopping elder abuse for a book I’m writing. It included all varieties of health and mental health care providers, bankers, judges, clergy, entomologists (don’t ask), auditors, mail carriers, social scientists and many, many more.

In the other room, my husband was dealing with a plumbing problem. The sewer line between our house and the outside line was clogged, causing the water from my morning shower to make the toilet belch. It’s a problem we have every year or two when roots and vines make their way into a crack between pipes.

Several plumbers refused to give estimates over the phone, despite the fact that we could tell them exactly where the clog was, the length of the line, and the approximate time it takes to unclog. We finally agreed to let one come and take a look. After glancing at the front lawn, the guy offered to do the job for $165, considerably more than it cost last time. When we declined, he countered with $150, and we declined again. Ten minutes later, he was back, ringing the doorbell, and offering to do the job for $125. By then, someone else had agreed, by phone, to do it for $90.

An hour later, Dan and the $90 plumber were discussing the wily ways of home repairers. Things were especially bad for old people, the plumber told him, especially those with slight dementias. The biggest problem, he went on, was with “rooters," those plumbing companies that specialize in drain rooting. He had served as an expert witness in several cases, one involving an elderly woman who’d paid $9,000 for the same work we were having done.

Years ago, a prominent gerontologist suggested that elder abuse was a non-problem dreamed up by social workers to create jobs for themselves. It‘s gratifying that so many people recognize the problem today, see it as a community concern, and want to help. I wasn’t in on the abuse discussion, only hearing about it afterwards. If I had, I would probably have invited the plumber in, questioned him about his cases, and suggested that he present one at a local MDT.

At any rate, back in my office, I added plumbers to my list.

Elder ID Theft: Should We be Concerned?

Traditionally, those of us in the field of elder abuse prevention haven’t dealt with “consumer” crimes like telemarketing scams or identity theft. There was no evidence to suggest that elders were targeted, and some studies even suggested that elders were less likely than younger people to be victimized. Besides, our focus was on abuse by family members and acquaintances.

It’s true that only about 10% of victims of ID theft are elderly, but when you consider that over 9 million people reported ID theft last year, we’re talking huge numbers.

Like many people, I used to think of ID theft as a high tech crime committed over the Internet. But according to a report by the Better Business Bureau and Javelin Strategy & Research as an update of the Federal Trade Commission's 2003 Identity Theft Survey Report, “Fully one-fourth of the respondents who had been the victim of a financial fraud said they knew who had committed the crime, and in half those instances the perpetrator turned out to be a friend, relative, or neighbor.” The report further states that most thefts are committed the old fashioned way; the most frequently reported source of information used to commit fraud was a lost or stolen wallet or checkbook.

According to the Identity Theft Resource Center, there are 4 types of ID theft:

Financial ID Theft: Thieves use victims’ names, Social Security numbers, and other identifying information to apply for telephone service, credit cards or loans, buy merchandise, or lease cars or apartments. /strong>

Criminal ID Theft: Imposters provide victims’ information instead of their own when stopped by law enforcement. Eventually, when warrants for arrest are issued, they are in the names of the victims.

Identity Cloning: Imposters use victims’ information to establish new live. This form of ID theft is often committed by undocumented immigrants, criminals avoiding warrants, people hiding from abusive situations, or people who want to leave behind poor work and financial histories.

Business or Commercial Identity Theft: Businesses may also be victims. Typically, perpetrators get credit cards or checking accounts in the names of businesses, which find out when unhappy suppliers send collection notices or their business rating score is affected.

Identity theft is sometimes referred to as an “enabling crime” in that thieves use stolen identities to commit other crimes, including credit card fraud, immigration fraud, Internet scams, and even terrorism. Some thieves take out home equity loans in their victims’ names.

The following “ripped from the headlines” cases serve as examples:

A 100-year-old Tamarac (Florida) man's self-employed caregiver was accused of stealing his identity using his personal identification to open cell phone and cable TV accounts. The caregiver was charged with one count of elder exploitation and one count of using another person's ID without consent.

A home care provider was arrested on charges of elder abuse and burglary for holding an elderly man captive and striking him in the head and body with his own prosthetic leg. The suspect had been working for the man for the last six months under the name of her sister, a certified home care provider. She used her sister's identity to get the position. The suspect had a previous conviction and served jail time under her sister’s name. Specific charges included felony residential burglary, felony elder abuse, false imprisonment and preventing a victim from calling 911 by cutting the phone line.

A 57-year-old Anchorage, Alaska man pleaded not guilty to 17 counts of various forms of ID theft, from criminal impersonation to fraud. According to charging documents, he used an 82-year-old man’s personal information to obtain seven credit cards, which he used to charge $34,000 worth of merchandise.

In Tallahassee, a home health aide employed at an assisted living facility stole the identity of an 89-year-old resident and used the information to run up over $3,500 in fraudulent credit card charges for jewelry, furniture and clothing. She also wrote checks to herself from a bank account belonging to the victim and diverted the woman's mail from the facility to her own home. The case was investigated by the Attorney General's Medicaid Fraud Control Unit. The suspect was charged with exploitation of the elderly, criminal use of personal identification, forgery and grand theft.

Linda Foley, Director of the Identity Theft Resource Center, has pointed out some of the reasons why seniors are particularly vulnerable:

Some hospitals and nursing homes use patients' Social Security numbers as identification. Some even print them on patients’ wristbands.

Some seniors carry their Medicare cards with them in case of emergencies. And the cards contain their Social Security numbers.

Seniors are more susceptible to muggers as a result of their frailty. Which is one of the ways thieves get identifying information.

According to the Resource Center, recent widows and their families are at particularly high risk because ID thieves watch the death announcements, steal death certificates, and go on-line to the Social Security Death Index to get information about the recently deceased. Many take advantage of the fact that financial institutions are not always notified immediately of deaths, and so accounts may remain open for up to 10 years.

I shudder to think of all those years that we routinely advised elderly clients to keep their important legal and financial documents together in one place that was easily accessible in case of emergencies. Clearly, that’s not a good idea anymore and we need to re-educate professionals as well as seniors.

The few existing programs on elder ID theft have focused on educating people about ways to protect their identifying information. The truth is that it’s virtually impossible to protect yourself, and the best line of defense is mitigating risk after the fact.

But is it realistic to assume that frail elders can and will do so? One of the ways that ID thieves identify victims is by hacking into databases. Each time there’s a security breach, it’s followed by advice to those affected. For example, in 2004, hackers broke into a database containing the names, addresses, telephone and Social Security numbers, and birth dates of 1.4 million of California’s In-Home Support Service program clients. The California Department of Social Services, which operates the program, subsequently sent out letters to clients encouraging them to get credit reports and check them for irregularities. In May, 2006 the VA announced that information about 26.5 million veterans was compromised when a long time analyst at the agency took home data and his home was burglarized. The stolen data included names, Social Security numbers, dates of birth and numerical disability ratings. The VA also urged all veterans to check their credit reports and place fraud alerts on their credit files. Credit reports are not easy to interpret for any of us, let alone elders with impairments.

Perhaps a more promising approach is one developed by the AG’s office in Michigan, which was among the first to recognize that ID theft was a problem in nursing homes. After investigators discovered that employees, temp workers, and people posing as employees, were using their positions to get information about residents, the office started a program called “It’s MI Identity,” which tracks ID theft in homes and conducts routine credit checks for residents.

Ohio and several other states have enhanced penalties for people who commit ID theft against elders.

Clergy Against Senior Exploitation (CASE) Partnership, a program operated by the Denver District Attorney’s office, works with faith-based partners to develop and present training programs on elder financial exploitation (including identity theft) for clergy and older congregational members. A community advocate works with the program, to help individuals from the faith communities navigate the legal and social services system, and provides written information, including monthly fraud alerts, for use in newsletters and community bulletins.

Good starting points for learning more about identity theft, including ID theft of seniors, are the websites of the Office for Victims of Crime at the U.S.Department of Justice at http://www.ojp.usdoj.gov/ovc/help/it.htm and the Identity Theft Resource Center at http://www.idtheftcenter.org/index.shtml. The Office of Community Oriented Policing Services published an excellent guide for law enforcement, which is available on line at http://www.cops.usdoj.gov/mime/open.pdf?Item=1271