In response to financial scams targeting the elderly, victims and prosecutors are filing an increasing number of legal claims. Accordingly, family members must take steps to protect the assets of their elderly parents to prevent estate planning successes from being undone.
The North American Securities Administrators Association reports that in 2009, authorities issued more than 500 state securities enforcement actions that involved investments sold to the elderly. In 2010, that number more than doubled to over 1,200. State regulators think expect that number to continue to increase.
Scammers target the elderly via financial schemes such as investments promising extraordinary returns. According to experts, the elderly often have more savings than other demographic groups, and might suffer from mental or physical disabilities, making them more vulnerable.
Scam artists are not the only ones facing criminal complaints and cease-and-desist orders as a result of securities enforcement actions. Similar actions are being brought against companies that sell legitimate investment products to people, including the elderly, who are not ideal candidates for the products. One example is annuities with high surrender penalties if the investments are cashed out earlier than expected. Such investments are not suitable for many elderly people.
Financial scams resulted in a loss of nearly $3 billion for the elderly in 2010. One way to assist the elderly in avoiding such scams is to encourage them to sign up for the National Do Not Call Registry. Other options include setting up a guardianship, which gives a competent adult legal authority to act on behalf of their elder family member.
Source: The Wall Street Journal, "Financial Scammers Prey on Seniors," Anne Tergesen, April 7, 2012