By Amy Meiburg, Elder Law Clinic Student, Fall 2015
Working for the SEC this past summer, I became more aware of the challenges that are increasingly facing senior Americans – fraud. Americans over the age of sixty-five (65) now hold a vast majority of wealth in our economy. Further, these individuals are frequently targeted by unscrupulous individuals for a variety of schemes. Seniors are susceptible for many reasons: lack of understanding of new technologies, inability to recognize untrustworthy facial cues (NPR), financial investing history (id.), landline phones which can be contacted by telemarketers, and various other reasons.
Knowing that seniors are less likely to be discerning when it comes to investing or diligence in determining the worthiness of junk mail, perpetrators of fraud target seniors for various schemes. One such scheme is the door-to-door magazine salesmen. For this scheme, the schemer approaches the target with a story about selling magazines for some charity, finagles payment for a magazine order, then absconds with the cash.
This is a minor theft compared to the amounts that fraudsters can inveigle. This summer I attended an SEC hearing in the Colorado District Court where an interested party was allowed to speak regarding the alleged fraud. This senior invested more than $10,000 in “the Matrix,” buying squares which were guaranteed to return 600%. Further, she reported and paid taxes on the income when the schemers sent her a 1099 without ever having paid her any of the funds. This is just one example of what can and does happen to seniors across the country.
In addition to being the target of fraud, which can potentially decimate a life savings, seniors can also become involved in fraudulent schemes where they are complicit in the scheme itself without even knowing it. For example, I worked with a senior this summer who sold fraudulent securities and settled with the Commission for over $100,000 dollars. At 87, this individual had already declared bankruptcy, lost his home, and spent thousands on medical expenses for his terminal cancer. All of this factored into his becoming embroiled in a scheme to defraud investors. He claimed that he was tricked into selling fraudulent securities. Whether or not his claims were true, he is an example of what can happen to seniors who are less likely to question schemes that seem too good to be true.
The only way to help seniors avoid being the target of fraud is to call attention to the problem and continue to educate both those seniors and their families. There are many ways this are done. Many news organizations are calling attention to this problem, and seniors’ assistance organizations across the country have educational programs for seniors to help them recognize potential fraud. Although these are both excellent ways to start the process of protecting seniors, much more needs to be done. These despicable actors prey on those who need the most protection, and we as a society need to further our involvement in their protection.
NPR, Why It’s Easier to Scam the Elderly, http://www.npr.org/sections/health-shots/2012/12/06/166609270/why-its-easier-to-scam-the-elderly