Elder Financial Abuse Much Worse Than Reported, Study Says
Senior citizens may lose nearly 25 times more to scammers than what is reported, according to a report by Comparitech, a consumer research organization based in the U.K.
Instead of the 200,000 cases of elder financial abuse that are reported annually to U.S. authorities, the actual number may be as high as 5 million, with losses of $27.4 billion a year, not the $1.17 billion that is officially reported, said Paul Bischoff, researcher and editor of Comparitech, which focuses on consumer issues in the United States, Canada and the United Kingdom.
Comparitech used a variety of sources from government, law enforcement, and aging organizations to try to get a handle on the real cost of financial abuse of the elderly. The numbers are vastly underreported for several reasons, said Bischoff. The study highlights the lack of accurate data, and shows the need for further research, he added.
“A lot of the financial abuse is perpetrated by family members or people the elderly trust, so they are reluctant to report it; they may be ashamed they got scammed, or they may not realize it,” Bischoff said.
Julie Schoen, deputy director of the National Center on Elder Abuse, said, “Elder financial abuse is such a hidden crime. Within families, victims don’t want to prosecute. There’s a huge gap in our system when it comes to recording these crimes. We need better research.”
AARP said the number of financial abuse cases is a growing problem. “Bad actors isolate elderly victims so the scammers don’t get caught and [then] they take advantage of the victims,” said Amy Mix, an attorney with the AARP Legal Counsel for the Elderly.
Statistics on the real numbers surrounding elder financial abuse vary by organization, but experts agree it is a serious problem that is debilitating to seniors. An earlier report from the New York City Department for the Aging and Cornell University done in 2011 estimated that only one in 23 cases is reported.
Comparitech estimated one in 10 people in the United States over the age of 65 falls victim to elder fraud in the last year. The average loss per case based on numbers reported to state Adult Protective Services organizations is $2,415.
“Most of the fraud right now is done by people who are trusted by the elderly, but we think telephone scams are going to skyrocket,” Bischoff said. “This was an exploratory study. A lot more work needs to be done. It is important to raise awareness about the problem and to know just how bad it is.”
Organizations keep records differently or divide data in various ways. Some do not distinguish fraud cases by age and others do not separate elder financial abuse from other types of elder abuse, making it difficult to determine the extent of the problem. Comparitech used averages whenever necessary to estimate totals.