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by Carole Fleck, AARP Bulletin, June 16, 2010
En español | More than 7.3 million older Americans—as many as one in five—have been taken advantage of through unreasonably high fees for financial services, an inappropriate investment or outright fraud, according to an elder investor fraud survey released Tuesday.
But many of their adult children apparently remained in the dark: In the same survey, only about one in seven said that a mother or father, age 65 and older, had been cheated.
Similarly, many children of older adults didn’t realize how common the come-ons for money can be. More than one-third of adults age 65-plus (37 percent) said they receive telephone and mail solicitations that asked for money or participation in lotteries “and other schemes.” Yet only 19 percent of adult children thought that their parents were pressured in such a fashion, according to the poll commissioned by the nonprofit Investor Protection Trust (IPT), an independent group that promotes investor education.
Still, most of the adult children polled (80 percent) said they felt confident that their parents age 65 or older would tell them “immediately” if they were swindled. Sixteen percent thought their parents would be ashamed and hide such a fact. And 35 percent said it’s not likely that they’d be able to figure out that their parents had been duped if mom or dad didn’t disclose it.
Though 31 percent of older people polled said they feel vulnerable to potential swindles, men were more likely than women (24 percent versus 17 percent) to report that they’d actually been conned, the survey found.
The results of the survey of 2,022 people were released on World Elder Abuse Awareness Day.
“We now know that a shockingly large number of older Americans are already victims of financial swindles, and millions more are in danger of being exploited in such a fashion,” Don Blandin, chief executive officer of IPT, said in a statement.
To reverse the trend, Blandin says the IPT launched a national campaign, with help from the North American Securities Administrators Association, the National Adult Protective Services Association and a number of medical associations, to educate doctors on how to identify patients who may be particularly at risk—including those with mild to moderate dementia. The physicians are encouraged to report cases of suspected abuse to state securities regulators or to adult protective services professionals.
A 2008 Duke University study found that about 35 percent of 25 million people over age 71 in the United States have mild cognitive impairment or Alzheimer’s disease, making them vulnerable to financial exploitation, including investment fraud.
“People who have early onset dementia make four times more financial errors than others,” Dr. Robert Roush, an associate professor of medicine-geriatrics at the Baylor College of Medicine, told a news conference on the survey results. “This is a growing problem. When all the boomers turn 65 in 2029, that’s 77 million people; we will have an age wave, if you will, that will ... produce more people who are vulnerable to this form of financial abuse.”
The survey, which was conducted in May, also found that about 45 percent of respondents age 65 and over got at least two out of four questions wrong about basic investment knowledge—they believed that an investment registered with the Securities and Exchange Commission or state securities regulators meant it’d been reviewed to make sure it was safe, and that a very high rate of return was only OK as long as the investment was guaranteed or bonded.
Other findings among those polled age 65 or older include:
Carole Fleck is a senior editor at the AARP Bulletin.
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