Swindling the Elderly
By Charlene Israel
CBN News
July 30, 2007
CBNNews.com - Each year, older citizens are swindled out of billions of dollars by scammers on the Internet, on the phone, and even by those closest to them.
Frank Kulak enjoys playing the harmonica for anyone who will listen.
At 89 he's also a gifted painter, a passion he acquired nearly 70 years ago.
Back then, life was much simpler and trust was unquestioned. Not so today.
After the death of Frank's wife in 2000, he had difficulty keeping up with responsibilities like paying bills and managing appointments.
Frank said, "When Lee passed away, everything changed. We had to get somebody to do the work of a power of attorney to do all the odds and ends, to take care of everything."
He turned to a family member for help -- a trusted niece.
"She was taking him to the doctors, she was paying bills," Ed Kulak, Frank's brother explained.
But that's not all she was doing. Frank's niece and her husband were both unemployed, yet they were able to buy expensive items for themselves. That made both Frank and Ed suspicious.
"They were remodeling their home, bought a new car," Ed said. "This aroused suspicion on my part."
"Every time I'd ask her something about money, she never had an answer to give me," Frank said. "She said don't worry about it, everything will be taken care of."
Not so.
Turns out more than $80,000 of Frank's life savings was gone, not to mention his freedom: his niece had him wrongfully committed to a psychiatric hospital.
"She painted a picture of him being, number one, a runaway, or he was suicidal -- which is neither one of the two," Ed said.
Frank is not alone. Financial swindles are one of the fastest-growing scams against the elderly.
Sara Aravanis is director of the National Center on Elder Abuse. She said, "We estimate there are about 1 million situations or cases of elder abuse out there each year and about 15 percent of those relate to financial exploitation."
And the scams are many.
As Pat Robertson reminds us, one of the prime principles of investing is "If it's too good to be true, it isn't true." Watch the full report by Charlene Israel, along with Robertson's advice on how to protect yourself and your money.
Here are just a few of tricks used by scammers:
Charity fraud, where predators solicit funds for fraudulent charities via the phone.
And the new lottery scam that mails unsuspecting consumers phony checks that appear to be from various state governments -- all to convince them they have actually won a cash prize.
And then there are those phony foreign money offers.
Ron Costen is director of the Institute on Protective Services at Pennsylvania's Temple University. He says that con artists come across as friendly and seemingly helpful, something lonely elders find appealing.
Costen explained, "There are the people that do the Canadian lotteries that call older people on the phone and say, 'You've won a million dollars, and we simply want to ship it down to you, but it's at the Canadian border and we need to pay excise tax on this money. Could you wire us $3,000?' Then they send them a very official-looking document showing that they've won this money, and then the older adult is hounded with calls coming every 15, 20 minutes to send the money, send the money. 'Why would you be so foolish to give up this money?' They then go to a Western Union. They wire the money. Of course, the funds are sent to them."
"The largest financial exploitation of which I know is the theft of assets by caregivers and family members, by stealing money from checking accounts, CDs, savings accounts, and home improvement loans," Costen added.
But experts say there are things seniors can do to protect themselves from fraud.
For example:
- Do not respond to anyone asking for your Social Security number, credit card, or bank account information.
- If you receive Social Security, have it directly deposited in your bank account.
- Be wary if a family member you aren't close to offers to help you with your finances.
- Don't reply to anything that doesn't provide enough specific information or requires an entry fee or deposit.
The problem of financial elder abuse is spreading so much that many financial institutions are partnering with elder protective agencies and law enforcement to combat the problem.
Aravanis says planning ahead is also key.
"We need to do a lot of educating of people about how to plan, particularly for incapacity," she said. "How to plan for the time for when you won't be able manage your own finances, manage your own property, make your own decisions. We need to have people thinking in a forward fashion about that and getting appropriate help to plan now, as they are facing issues related to aging."
In the case of Frank Kulak, his niece received five years probation and was ordered to pay restitution. But Frank has yet to see a dime of it.
Frank says he's learned a painful lesson from his experience -- one that proves that times and people have indeed changed.
"I trusted her," he said. "If you can't trust family, who can you trust?"
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