6/22/2011 12:38 PM ET|
Is Grandpa getting fleeced?
Older people can be vulnerable to financial scams, so family members need to know how to protect them from con artists, even those within the family.
Louis Gottschalk was a well-known psychiatrist who helped create the Gottschalk-Gleser scales, an internationally recognized diagnostic tool that charted impairments in brain function.
He was also, according to his son, the elderly dupe of Nigerian scam artists who conned him out of more than $1 million.
The son, who is also a doctor, filed a lawsuit in 2008 asking a court to remove his 89-year-old father as head of an $8 million family foundation, saying the elder Gottschalk had doled out as much as $3 million in response to Internet pleas offering the elderly man a cut of huge sums of cash that were supposedly trapped in African bank accounts.
The father, who died a few months after the suit was filed, claimed the losses were from "bad investments."
If the senior Gottschalk was the victim of a scam, he certainly wasn't alone. One out of every five people over age 65 has been victimized by a financial con, according to a survey released last year by the Investor Protection Trust.
Financial abuse of the elderly is a huge and growing problem. A recent MetLife study pegged the annual cost at nearly $3 billion, a 12% increase from 2008. Many financial experts predict the toll will continue to rise as baby boomers age and their cognitive abilities decline.
Women were twice as likely to be victimized as men, the MetLife study indicated. The most common victim was a woman, aged 80 to 89, who lived alone but required some kind of outside assistance with health care or home maintenance.
"The victims generally want their independence and value it very highly, but also show some signs of vulnerability," said Sandra Timmermann, the director of the MetLife Mature Market Institute, which co-sponsored the study. "They also are trusting and may in fact be happy to be befriended by someone who could be a scam artist."
In perusing media accounts of fraud, the study found that:
- 51% of frauds were perpetrated by strangers.
- 34% by family, friends and neighbors.
- 12% by the business sector (things like home repair scams or the sale of unsuitable reverse mortgages or annuities).
- 4% of cases were related to Medicare and Medicaid fraud, such as facilities charging for services they don't supply to vulnerable seniors.
Financial elder abuse can take many forms, from organized cons that sell "sucker lists" of prior victims to crimes of opportunity, where a family member or caregiver abuses access to an elderly person's finances. One caregiver in Orange County, Calif., was recently sentenced to 13 years in prison for stealing more than $600,000 in jewelry from her charges. Another, in Long Beach, Calif., is being sought for disappearing with more than $1 million of a stroke victim's funds, including the proceeds from the sale of a strip mall the caretaker illegally sold.
People with closer ties can exploit older people, too. Here are a few of the tales from my mailbag:
- A reader named Ernie wrote to me about his wife's brother, who moved into their father's house after the elderly man, suffering from Alzheimer's disease, entered a nursing home. The brother-in-law took out a huge loan against the once-paid-for property. "The house is so heavily mortgaged, we've learned it's now close to foreclosure," Ernie wrote.
- Reader Terry said her mother had been romanced by a man who isolated the older woman from her family and eventually ran through all her money. Terry eventually won back her mother's trust, took over as conservator and evicted the Don Juan from her mother's apartment.
- Reader Amy discovered that her once-frugal mother had more than $30,000 in credit card debt, much of it incurred to placate the endless financial demands of Amy's grown, chronically unemployed nephew. Amy's efforts to distance her mother from the man have created a family-wide rift.
VIDEO ON MSN MONEY
My elderly mother was living with one of my sisters and her husband.
My mother decided to move out on her own. She was not invalid, she could take care of herself, but I was wondering why she wanted to move.
It seems my sister had taken over $50,000 from my mother's accounts.
Her defence... "She didn't pay me for anything. I was just taking what was owed me."
The trouble with that - she never asked to be paid for anything.
If there was an agreement in place (how much for R&B, etc... which is perfectly ok), then I would say fine. But there wasn't.
And now, I only hear from my sister when she needs money.
My mother has since passed away.
(and the crocodile tears... you have no idea, but I suspect you can imagine)
Knew a guy in Cody, Wyoming, same "exact" thing happened to him, and now he's dead. The Hispanic woman who took him to the cleaners, was never caught or prosecuted!
@dam tired of this
I agree with you wholeheartedly! How come "our" Government lets these big Corporations get away with committing "CRIMINAL ACTS", and does nothing about it??! I guess there is a "DOUBLE STANDARD" in this Country, and "TWO SETS OF LAWS"! One set for the Corporations, and ONE SET FOR US!!! I'd say it is ABOUT TIME FOR A CHANGE, WOULDN'T YOU??!
Casey Anthony*s father George fell for this scam. He was so embarrassed he told his wife he gambled the money away. No one wants to admit they have been scammed.
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