My grandfather spent a lifetime of service, from raising foster children, to sponsoring refugees, to rebuilding post-cold war Germany. A smart and compassionate man, it was in his 90s that my family discovered he was being financially exploited.
A new law signed by President Trump on May 24 is designed in part to strengthen protections for older Americans against financial exploitation and abuse. The Economic Growth, Regulatory Relief, and Consumer Protection Act includes a provision, previously proposed as the Senior Safe Act, that extends immunity from lawsuits to financial institutions and insurance companies when reporting suspected cases of elder financial exploitation.
Although older Americans with impaired memory or cognitive problems may appear healthy and retain social skills, their financial capacity—that is, their ability to manage money, pay bills and debts, and make prudent decisions regarding investments and risk—may nevertheless be significantly diminished. Not surprisingly, therefore, financial advisors are often the first people to notice when a person begins to show signs of cognitive impairment—sometimes even before the individual or family become aware. A full 75 percent of advisors in a recent survey indicated they had at least one client who exhibited diminished mental capacity.
Older adults with otherwise healthy brains sometimes develop biological changes that could put them at risk for financial exploitation, according to a study published earlier this year by researchers from Cornell and York universities. Previous studies had identified a link between brain disease (mild cognitive impairment, Alzheimer’s disease ) and increased risk of financial exploitation, but this is the first study to look for biological risk factors among otherwise healthy adults who are aging normally.
Financial exploitation is an issue that demands financial institutions’ attention. Banks lose an estimated $1 billion (and rising) annually in deposits. Thieves especially target older Americans (those over 50), with good reason — these customers own two-thirds of all bank deposits. An estimated 1 in 5 older Americans are victims of financial exploitation.
Many of us understand that saving for retirement and for the long term is one of the most important actions you can take to ensure a secure future. So is protecting that savings.
After attending a 2011 U.S. Senate Special Committee on Aging hearing where my report on the cost of exploitation was quoted, I discussed the growing problem of financial exploitation with a banker. In minutes over a burger, we identified a way a family caregiver could watch over a loved one’s bank account without giving the caregiver access to make transactions. We implemented this account feature a few months later at Bank of American Fork. Many financial institutions have developed simple and effective solutions to fight exploitation. Exploitation isn’t the only issue financial institutions encounter — financial caregiving, dementia and accessibility are also areas of concern for customers and financial institutions.
As a teenager, I was friends with an amazing woman named Kaye. She was a nurse during World War II, and after the war, she and her husband — a baron of Poland — worked with Radio Free Europe to help bring freedom to people trapped behind the Iron Curtain.
Search AARP Blogs