The Illinois Nursing Home Care Act provides that residents of nursing homes have the right to manage their own financial affairs. Unfortunately, the elderly are frequently the target of financial exploitation and abuse, which can be perpetrated by employees and staff at nursing homes such as caretakers and nurses. The National Adult Protective Services Association reports that 1 in 20 older adults suffer from financial abuse or mistreatment every year, and the National Council on Aging estimates that elder financial abuse and fraud costs older Americans between $2.9 billion and $36.5 billion annually.
Residents of nursing homes may be particularly susceptible to financial exploitation if they do not understand modern internet banking, or if they are physically or mentally compromised. Because of this, family members of nursing home residents depend on the homes to be alert for signs that that a resident is being financially abused or exploited.
I. Common Types of Financial Abuse and Exploitation of the Elderly
The National Council on Aging reports that the top ten scams targeting seniors are:
1. Medicare and Health Insurance Scams. Perpetrators may pose as a Medicare representative to trick residents into giving them their personal information.
2. Counterfeit and Prescription Drug Scams. Counterfeit drug scams often operate on the Internet, where residents may go to find better prices on specialized medications. An elderly person may purchase drugs that will not help them or are unsafe.
3. Funeral and Cemetery Scams. Perpetrators attend the funeral service of a stranger, and then find a grieving widow or widower and claim the deceased had an outstanding debt. The perpetrator will then try to extort money to settle the fake debt.
4. Fraudulent Anti-Aging Products. Scammers may target older Americans on the internet with fake beauty products such as counterfeit Botox or bogus homeopathic medicines.
5. Telemarketing and Phone Scams. Scammers use fake telemarketing calls to prey on older people, who as a group make twice as many purchases over the phone than the national average. Common examples of telemarketing fraud include: (1) telling an elderly person that he has found a large sum of money and is willing to split it if the person makes an up front payment from his bank account; (2) convincing an elderly person to send money based on the false pretext that their grandchild or another relative is in trouble, such as being in jail or in the hospital, and (3) soliciting donations to fake charities, especially after natural disasters.
6. Internet Fraud. Internet fraud often includes tricking elderly people into downloading viruses that will steal the user’s personal information. Email phishing scams often come from a perpetrator imitating a legitimate company or institution, such as the IRS, and asking the user for their personal information.
7. Investment Schemes. Pyramid and Ponzi schemes often target the elderly, especially those planning their retirement or trying to manage their savings.
8. Homeowner and Reverse Mortgage Scams. Perpetrators target elderly individuals that own their own homes and convince them to take out reverse mortgages that steeply undervalue the property. Reverse mortgage scammers may also simply pocket money gained from a reverse mortgage that is meant for the homeowner.
9. Sweepstakes and Lottery Scams. Scammers tell an older adult that they have won a lottery or sweepstakes of some kind and need to make some sort of payment to unlock the supposed prize.
10. The Grandparent Scam. A scammer will call an older adult and imitate a grandchild. Then, the scammer will ask for money to solve an unexpected financial problem such as overdue rent or car repairs.
Other common scams include the theft of cash or personal property, fraud by someone managing a resident’s property, and the unauthorized sale or transfer of real estate owned by nursing home resident. Finally, scammers may also pose as legitimate companies offering to recover money that a resident has lost to another scammer, and then charge an advance fee to recover money that the scammer has no intention of trying to collect.
II. Signs of Financial Elder Abuse
The Consumer Financial Protection Bureau identifies several warning signs that a long-term care resident is being financially exploited or abused, including:
- Possessions disappearing from a resident’s room or apartment.
- A resident being pressured into making an important decision or signing a document.
- A previously uninvolved person claiming authority to manage a resident’s care or finances.
- Unpaid facility bills.
- A resident’s checkbook showing checks made out to “cash” frequently or check numbers out of sequence.
- A resident making frequent or costly gifts to facility staff or volunteers.
Other warning signs can include: requests to change legal documents such as a will or power of attorney; past due or shut off notices from utility companies; foreclosure notices of liens on real property; a suspicious signature on legal documents; and a resident complaining about missing money or property.
III. Reporting Financial Exploitation of an Elderly Person
If you suspect that you or someone you know has been a victim of financial exploitation, you have several options to report the misconduct. First, a person can call the Illinois Adult Protective Services Hotline at (866) 800-1409. Second, residents who live in nursing facilities can call the Illinois Department of Public Health’s Nursing Home Complaint Hotline at (800) 252-4343. Finally, residents in a supportive living facility (SLF) can call the Illinois Department of Healthcare and Family Services SLF Complaint Hotline at (800) 266-0768.
The Consumer Financial Protection Bureau also advises financial institutions to report suspected financial exploitation of an older adult to local, state, and federal authorities.
Adult Protective Services investigates allegations of abuse affecting adults 60 and over. Once abuse is reported, a case worker may contact the victim to investigate the report.
RESOURCES
National Adult Protective Services Association
Consumer Financial Protection Bureau
National Center on Elder Abuse