Protecting the Elderly from the People They Trust

Ashamed that a trusted family member, friend, or caregiver might be deceiving them -- or worse, that they may be deemed incompetent to manage their affairs -- they often choose to keep these problems hidden. As a result, hard data documenting this sort of fraud is lacking.

What is known is that 80,000 such cases were reported last year, and more than two-thirds of the victims were defrauded by someone close to them. "Financial exploitation is growing out of control because we have an aging population," says Ronald Costen, director of Temple University's Institute on Protective Services in the School of Social Administration.

That's why the issue has moved to a front burner in law enforcement, government, and the banking industry. Both houses of Congress are considering versions of a comprehensive bill called the Elder Justice Act, which funds public education, better data collection, and training for law enforcement and elder care professionals to combat the problem. A handful of states from Massachusetts to California have programs that work closely with social service agencies and banks to recognize fraud and report it.

Since many financial frauds center on the durable power of attorney, it's critical that document be properly drawn. By itself, this instrument requires no regulatory or legal oversight or accounting of the spending. That's why elder fraud experts call it "a license to steal," says Lori Stiegel, associate staff director for the Commission on Law & Aging at the American Bar Assn.

To prevent such abuse, hire a lawyer to customize the document, recommends Loewy. Make sure it explicitly states what bills and other financial transactions you want the agent to handle. Some states allow agents to make financial gifts to themselves without limit or restriction. Carefully review or delete these clauses.

Insist that the agent not commingle his or her own funds with those of the person granting power of attorney. It makes it easier to monitor the finances. Another safeguard is to notify the bank of any monthly bills to be paid by the agent with power of attorney. Have the bank agree to to alert another family member if there is an attempt to withdraw additional funds.

Even a well-drafted power of attorney is not foolproof. To add additional protection, assign a third-party, preferably a lawyer or other nonfamily member, to review all spending and monthly financial statements.

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Using your real estate to pay for retirement

Have you wondered how you are going to pay for your retirment? Well a new book "Retire on the House" by Gillete Edmunds and Jim Keene may open your eyes to new possibilities. If your like most homeowners, you only think of your home as a place to live and not as a powerful financial tool.

In the book the authors discuss almost every possible way to turn your home into a an income stream without selling it. The suggestions provided will give retirees who own their home many different ideas to suppliment their retirement income.

Some of the suggestions include converting your home into a boarding or rental house, refinancing your home, downsizing, moving to senior community and investing sell proceeds, or taking out a reverse mortgage. The book does an excellent job of explaining the pros and cons of each alternative, especially its discussion on the complex subjects like reverse mortgages.

Although this book tackles some complicated topics like reverse mortgages and can get a little heavy, the information provide is absolutely invaluable. Any Senior that owns their own homes should pick up a copy and study it, if only just to open their eyes to the possibities.

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Seniors a magnet for health care scams

Donna Cardarelli, 78, gets $40 whisked out of her social security check, every month, for an insurance policy she says she never ordered. She is a victim of a scheme that officials say is widespread: unscrupulous insurance salesmen, taking advantage of Medicare’s new prescription drug benefit to defraud elders.

Cardarelli said this January, a third-party salesman offered her assistance signing up for a prescription benefit called Common Care. Instead, he signed her up without her knowledge for an over-priced insurance plan. Cardarelli has paid premiums for that plan out of her Social Security check for five months.

"I have been up to 11 at night. I have been on the phone waiting for these people," said Cardarelli, 78. Ohio-based Insurer Member Health says they have unenrolled Cardarelli from their Common Care plan, Bernardi said. But Social Security continues to deduct the payments.

"She’s not the only one," said Andrea Centola, director of compliance and regulatory affairs for Member Health. Centola said there is a time lag between insurers’ records, Medicare records and Social Security records.

Bernardi said a massive enrollment occurring all at once this year has left insurance companies short-staffed. Seniors looking to subscribe were unable to get what they need directly, and third parties have stepped into the breach, he said.

Local Medicare officials said it has created fertile ground for fraud. Seniors have always been targets for similar scams, but confusion over medicare has provided con men with a new opportunity.

The rules seniors should follow are the same in this case as in any other: seniors should not give out personal data or bank information via phone, unless they initiated the call.

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