Beware of Wolves in Sheep’s Clothing

There is a wealth of information on the FINRA, SEC, and AARP websites geared toward helping the senior investor protect their investments. These agencies are concerned for senior investors because we, yes, I am a baby boomer, make up a large percentage of the population. In their final report on Senior Investor Vulnerability, the Board of International Organization of Securities Commissions (IOSCO) projects that the population of those over 60 will jump from 12% to 22% between 2015 and 2050. What is significant about this statistic is that people over 60 are more susceptible to financial exploitation. In fact, several studies have found that financial exploitation is the most common form of elder abuse. Therefore, the purpose of this article is to raise awareness about an ever-increasing problem with elder abuse, specifically financial exploitation.

Florida defines financial exploitation as knowingly taking or trying to take or use an elderly person’s (disabled or not) assets, funds, or property for their own benefit. The exploiter accomplishes this through coercion and/or deception, and can be anyone such as family members, financial advisors, scam artists, home repair contractors, to name a few. These people are clever – they gain an elderly person’s trust and confidence, in some cases isolating the elderly person from others. It could be the financial advisor that recommends a complex investment that is beyond the senior investor’s cognitive ability to understand or that invests their money in an unsuitable investment that depletes their assets. Why are the elderly more vulnerable? In addition to cognitive ageing, other factors that contribute to an elder’s vulnerability include physical/mental/emotional dysfunction, dementia, organic brain damage, recent loss of a loved one, isolation, and frailty. Florida law requires proof that the assets/funds, etc. are not being given knowingly, voluntarily, or with proper consent. In other words, there must be proof of an undue influence by the exploiter. In cases of undue influence, the exploiter uses his/her power over the elderly person to gain psychological control over their decision-making. Proof may be easier in those cases of exploitation where the elder person is clearly impaired. However, in cases of competent elders who may not yet have experienced some of the age-related changes previously mentioned, there are warning signs: engaging in behavior inconsistent with long-standing beliefs; sudden changes in financial management to benefit one individual; isolation; alteration of wills or other documents to benefit a caretaker or new friend; helplessness; hopelessness; non-family caretaker controlling the elderly person’s schedule.

Knowledge is power! One of the best ways to avoid being a victim of financial exploitation is to be aware of what it means and the characteristics of the exploiter. With this knowledge, you can hopefully avoid the pitfalls of exploitation. However, if you feel that you or a loved one has been exploited, you need to take action before it is too late to act by contacting legal counsel experienced in elder exploitation. Or if you feel that a crime has been committed, contact your local authorities. If you or a loved one feel that you are a victim of financial exploitation, please contact Mr. Perron at (941) 827-2228.