Apr 18, 2015 | aging, aging investor, elder investor, elderly, financial elder abuse, finra, investor, scammers, senior citizen investor, senior investor
Imagine this scenario. The person making all financial decisions was the man of the house. His somewhat timid wife, married to him for many years, never wanted the responsibility to decide how to invest. They had a multimillion dollar estate. Then Harry, her husband died and she was totally unprepared.
That’s “Rosanna’s” story. Rosanna was married for decades to Harry who passed away at age 85. She was 82 at the time. They had three adult daughters and one son, Jackson. Their son was never a steady job holder and had fantasies of how he was going to be a business owner. After his father died, he saw an opportunity. He could easily manipulate his mother, who looked to him to essentially take Harry’s place with decisions about investments. Rosanna had begun to suffer serious memory problems and couldn’t remember a conversation from morning to evening. She was clearly a person with diminished capacity.
Jackson was a co-trustee on the parents’ trust with his mother and sisters, but had sole power to make investment decisions. He conspired with the long time broker-dealer who used to work with his father. The broker also saw an opportunity. The broker told Jackson that he could help him out but Jackson needed to put a lot more of Rosanna’s money into variable annuities. What this meant was that her money would be tied up for years, unless she paid a stiff surrender charge to get to it. A full 87% of Rosanna’s money was then shifted into variable annuities. When Harry died, the amount invested in annuities was about 40%, which was plenty. This shift of most assets into annuities of course generated a huge commission for the broker. About the same time, Jackson took a six-figure loan from Rosanna’s trust without consulting his sisters and without informing them.
They were angry and upset with Jackson for manipulating their mother, for taking out a “loan” from their mother’s trust, which he didn’t pay back and for sneaking around behind their backs putting so much into variable annuities. That was going to affect their inheritance. When the sisters called me, we discussed the issue of manipulation of their mother. No one had ever checked her out for her capacity for financial decisions. When her daughters wanted her to see a doctor to find out more about her memory troubles, Jackson vetoed it. Rosanna consulted Jackson on everything. This meant that legal action was necessary. I referred them to an elder abuse attorney to take up the cause. They were very distressed and not speaking to Jackson. Meanwhile, Jackson again manipulated his mother to get money from her, with which he hired an attorney to harass and threaten the sisters. It was ugly.
No one can be sure how this nasty tale will play out, but the regulators will probably not like the fact that the broker put so much of an 85 year old’s assets into variable annuities. They will probably not like that he had to override his firm’s internal controls set up to prevent that. They will probably not like the fact that the net result is that the estate lost a significant sum compared with what it would have done in conventional investments suitable for an 85 year old. I sent the sisters the forms to file complaints with both FINRA and the SEC. They will also have an attorney to represent them in that matter.
And as for Jackson, I hope that the courts will deal with him justly. He is looking out for himself, that is clear. As a trustee, he had a legal duty to the trust, not to his own self interest in grabbing a six figure “loan” from the trust that he had no means to repay.
The takeaway here is that your aging clients, particularly the very unsophisticated ones like Rosanna are sitting ducks for abuse by unscrupulous brokers. And it is up the the advisors who are ethical to blow the whistle. It is up to everyone to seek justice for the unwary who become victims of manipulation because of greed, the ease of taking advantage of an elder, and the attitude that “it’s not my problem, she’s not my client”. Please make it your business. At AgingInvestor.com, we want to put a stop to this kind of abuse. We urge you to join us!
Click HERE if you want to help us make a difference.
Until next time,
Apr 13, 2015 | aging, Alzheimer's disease, diminished cognition, elderly, finra
Thwarting Elder Abuse: Who Should You Call When You Suspect It?
Imagine this: it happens. Abuse seems to be going on right in front of you with an aging client. A family friend is manipulating her, and you’re pretty sure about that. What would be the first thing you could do?
Perhaps you’ve taken a class or training in senior specific issues like dementia. (You’ll be especially knowledgeable if you’ve gotten training with our Aging Investor.com webinars!) You’re determined to stop it if you can.
You may think of calling Adult Protective Services, but you also know that APS is limited, and addresses situations that are criminal in nature. Sometimes when an elder seems to be going along with the abuse, APS may have its hands tied. For example when a friend close to the elder is pressuring an elder into giving him large amounts of cash and draining the elder’s bank account, the elder may not show concern. The aging person could be subject to undue influence or perhaps intimidated and afraid to say “no”. When the victim seems willing, you have to look beyond APS to try to thwart the abuser.
One thing every professional needs to have in every file is a list of contacts your client has provided to you, as you have requested, to use when something seems amiss or when your client shows signs of memory problems. You need specific written permission from your client to communicate with the people on the list. The list should include trusted family members, the client’s estate planning attorney, a long term friend, clergy or trusted other professional such as the client’s accountant.
When you have the client’s permission to contact these individuals, you can start asking questions about the suspected abuser. If the abuser is someone on the list, ask everyone else their impressions. People do change and financial desperation or greed can cause someone to misuse the trust the elder has in them.
Thinking it’s really none of your business that your client has a person who is taking advantage of her is not the answer to our massive problem of elder abuse in our country. We all must do something when we can. We have to speak up, get nosy, ask questions and take an active role. In asking the client’s list of contacts about the issue, you may learn a lot. Perhaps the “friend” has a gambling or drug problem. Perhaps your client just lost a spouse and is very vulnerable. Others on the contact list who may not see what you see can get involved in looking into the situation after becoming aware of your suspicions. Working together, a group can present a united front and create a strategy to stop the thefts and manipulation.
A very helpful resource for any professional is to search for and know competent elder abuse lawyers who have the skills, knowledge and will to step in and try whatever is possible to protect the aging person or her heirs. You can find one by searching your local county Bar Association website. Most have a directory or lawyer referral service. Lawyers are listed by specialty area. For example, in San Francisco, the Bar Association has a listing for the category of elder abuse. Under it there is a sublisting “Financial Abuse by Family or Friends”. That category will likely lead to someone who can help evaluate a case.
When the abuser has talked the elder into changing her will and disinheriting her children in favor of the so-called friend, that gives the elder abuse lawyer something to work with. Elder abuse litigators will generally listen to a possible case and give you an opinion about whether it is a matter they can handle. And aggressive proactive steps can be taken to thwart an abuser determined to clean out the assets of a supposedly willing victim.
If the abuser is a bad apple within the financial services industry, there are specialty lawyers who prosecute claims handled in FINRA arbitrations. They can be found through the Public Investors Arbitration Bar Association.
Not every senior who is being abused financially is able to see it. But those who have a role in the elder’s life can do much to at least try to stop the abuse. Loss of financial judgment is a reality that can occur as people age. If we don’t want to see more destitute seniors who were victimized, think of how you can help. Ask questions, call contacts and refer to an elder abuse attorney if you see this problem.
Until next time,
Carolyn Rosenblatt, RN, Attorney, Mediator
Dr. Mikol Davis, Psychologist, Gerontologist
Dec 19, 2014 | aging, aging investor, diminished cognition, elder investor, elderly, financial elder abuse, investor, scammers
When your aging client has contact with you, consider it an opportunity to educate them about more than the status of their portfolio you manage. Your client’s efforts to maintain financial safety can be thwarted by clever scammers who are constantly devising new ways to take advantage of them. You are in a perfect position to help keep them informed about financial abuse and the latest information on tactics scammers use. Don’t make it someone else’s problem. Make it part of your services.
Take for example the “grandma I need help” scam. My 92 year old mother in law told me about this one. Someone actually had the nerve to try it with her, but she’s smarter than they were and it didn’t work. However, one of her friends did fall into the trap. Somehow the scammers got a list of phone numbers of many of the seniors living in the nicely appointed neighborhood in her retirement community. They get a young man to call from their list of numbers and say “Grandma?” when a woman answers. If she thinks it’s her grandson, she’s bait. The thief then says he’s in trouble, with some made-up some story to get her to worry about him. He then asks her to wire money right away to get him out of this jam. The unsuspecting do it. And get taken.
A newer scam is the gift basket trick. Again, the older person’s phone number and address are known to the thieves. They call the potential victim to be sure he’s home and then tell him they’re Express Courier or any other name and they have a gift delivery. Will he be home in the next hour? If the victim says “yes, I’ll be here” an official looking truck with a courier name on it pulls up within the hour, and the delivery man hands the victim a lovely basket of wine and flowers. The trap is in the delivery man then asking the victim for payment for a “delivery fee’’ because the basket has alcohol and had to be hand delivered to an adult rather than left on the doorstep. Or so they say. The fake courier insists on a credit card payment rather than cash, even if the fee is just $3.50. He uses a small portable credit card scanner and asks for the PIN number for any debit card. What the victim does not know is that the scanner is a device used to steal the credit card information, in the way this kind of information has been stolen from ATMs and gas station credit card machines in the past. The scanner the courier uses even prints out a nice little receipt, making it all the more believable.
The victim doesn’t realize his credit card information has been used to make a dummy credit card with his name on it, which the thieves quickly use until the victim cancels the card. Thousands of dollars can be stolen from the victim’s by ATM cash withdrawals and numerous purchases before the victim knows what is going on. People are getting tricked by this. The scam is working for the scammers and you know they will keep doing it until the public gets well informed enough to decline the offer of the fake gift delivery over the phone.
If you are managing accounts for older clients, take the opportunity to help educate them about these nasty fraudsters who are easily able to get their names and phone numbers. You can make a difference. Tell them in person or make a handout about scams to email or send to them. They may see you as protective of their financial safety in more ways than one. That can uplift your image, always a good thing. We’ll keep you informed about elder abuse and how to protect your aging clients right here at
AgingInvestor.com.
Until next time,
Carolyn Rosenblatt, RN, Attorney
Nov 22, 2014 | aging, aging investor, Alzheimer's disease, diminished cognition, elder investor, elderly, financial elder abuse, investor, senior citizen investor, senior investor
We know that abuse of seniors is a growing problem. Based on information from the National Center on Elder Abuse, the majority of abusers are family members. However, only 44 out of 1000 instances of abuse are reported to authorities. Why aren’t more cases reported to the very authorities capable of stopping the abusers?
It seems to me that most family members are simply unwilling to “rat out” another family member even when they know that abuse is going on. When it comes to the seniors themselves, there is shame and embarrassment associated with being taken advantage of by someone close, especially someone they surely trusted. There is hesitation and fear. They want to talk about it but not do anything about it. The reluctance to report the abuse to Adult Protective Services is not limited to the seniors who can’t bear to call the authorities about a son, daughter or other relative.
I recently received a call from a distressed sister of a brother that she was convinced was stealing from their parents. He had total control over their parents, one of whom had dementia. His parents had appointed him as the agent on both the Durable Power of Attorney and the Advance Healthcare Directive. This gave him the legal authority to make both financial decisions without being accountable to anyone else and all healthcare decisions as well. I listened patiently to all the reasons she thought her brother was taking her parents’ money and using it for himself. I asked her if she had called Adult Protective Services.” No”, she said. When I asked why not she said “I don’t want to get my brother in trouble”. Where is the logic in that?
In another case, the elder herself had called. “I gave my grandson a big loan and he hasn’t paid it back,” she said. “But now I need the money to live on”. She described how her favorite grandson had taken title to her mobile home and gotten a loan, even after she had “loaned” him most of her savings. I explained that her chances of getting paid back were probably not very good, but the least she could do was to report what had happened to authorities. I advised her that taking a “loan” from an 80 year old and not paying it back would likely be considered elder abuse and it should be reported to APS. “Would my grandson go to jail?” she asked. I told her I didn’t know but it can happen when someone has committed this crime of elder abuse. She said, “I don’t want my grandson to go to jail”. Unfortunately, I am sure she did not follow up or do anything more about the problem.
Seniors like the 80-year-old woman are typical of why elder abuse does not get reported and therefore prosecuted more often, even when a family member is well aware of what is going on and knows that it is wrong. They would rather suffer impoverishment than be the one to report abuse. In fact, these same victims may refuse to testify against a relative who has abused them, even when these cases are prosecuted. Charges may not stick when the victim is unwilling to testify, unless there are independent records to prove the case in court.
It is as much a problem of our emotions and fears as it is of the wrongdoing itself. We somehow justify the actions, we look the other way or we fear what justice will do to our abusive relative.
I wonder, where is the anger at a crime against a person who is easily taken advantage of by the abuser? Where is the advocacy for the vulnerable person who is also our relative? Why are we remaining silent in this growing, $2.9 billion dollar a year problem?
I would be willing to guess that there is someone reading this whose client has a financial abuser in a their family or knows of a family where this has taken place. I urge you to speak up. To my knowledge, you can remain anonymous in your reporting, just as you can with any crime. Whether or not the criminal justice system can prove the crime is not your problem. It is your problem to carry the knowledge of financial abuse with you and to do nothing to protect the elder. One day it could be you who is victimized.
We are all encountering an aging population and the crime of opportunity of abusing elders is not going away. I am hopeful that we will show enough concern, enough responsibility and enough guts to do the right thing when we see a wrong that needs our attention.
