Shaking Down Grandma

Yesterday I came home from work and started deleting messages. Most of them are scams, but I paused over one message. I knew it was spam, and yet somehow its tone gave me a shudder. The caller threatened that $599 would be automatically deducted from my bank account unless I called her right away. Her voice was calmly angry, imperious. I almost felt as if I'd really messed up and she was right to go after my money. But I deleted the message and moved on. I am not her target, not yet. But her business plan is a good one: It's inexpensive to leave messages like this, and as our population ages, more and more elders with cognitive impairment will be susceptible to manipulation. For the bad guys, the rewards are vast: While Americans older than 65 now make up about 15 percent of the population, they control more than a third of financial assets.¹ Combine a mountain of money with age-related cognitive changes, and you have an attractive opportunity for theft.

Source: anonymoususer/Wikimedia Commons

To learn more about financial abuse, I checked in with Catherine Christian of the Manhattan District Attorney’s office. In her nearly three decades as a prosecutor, she has seen a shocking variety of ways to steal money from older people. Most elder abuse is financial; even when there is physical abuse there is often a financial component. And though the problem has always been there, it’s increasing. Sadly, a lot of financial abuse comes from family members and other trusted people, like neighbors, financial advisers, and new friends who seem devoted but end up emptying bank accounts.

One of the toughest parts for Christian is deciding whether an older person had decision-making capacity when their money disappeared, because that can be pivotal in determining whether a crime was committed. If your grandmother lacks this capacity—for instance, because she has dementia—and a new friend or wily relative knows that, and gets her to write a check for $50,000, that’s grand larceny. But people with decision-making capacity have a right to do stupid things with their money. If your grandma has this capacity, she has the right to give her money away, even to someone who doesn’t care about her the way they say they do. If the DA’s office gets involved, they gather evidence to determine if the older person had the capacity or not. If no one finds out the money is missing for two years, it can be even more challenging to determine what the person’s mental capacity was back then.

Scammers are determined and creative. Christian reports a scam that involves calling older women and claiming to represent Microsoft or Apple. The scammer says they can make sure your computer runs better, or that there’s a virus they can help remove. They add that it’s a nuisance to pay by credit card. They can take money directly from your checking account—so much easier—and all you need do is give them the account number. Similar scams involve a pleasant caller who claims you are owed a refund on a bill you paid a few months ago. Again, all they need is your bank account number. Lottery scams are especially prevalent, in which a person is told she has just won a contest or lottery and they need your account number to make a great big deposit. The scammers tell the truth about one thing: It is easy for them to access your bank account when you give them its number. And in an instant, they can wipe out a lifetime of prudent saving.

Why does any of this work? One factor is age-related cognitive changes. People who would not have fallen for a scam last year may now have impaired judgment. The change may be subtle, not enough for the family to see, but enough so they don’t ask why their beloved grandchild needs bail sent to them in a distant state. Unfortunately, mathematical skills can fail early on the path to dementia. A person may be herself in normal conversation, but no longer appreciate the difference between $50 and $50,000. Then, too, Catherine Christian finds that loneliness is a factor. Many older people live alone. The scammer may be the first person they’ve spoken to all day. If the friendly scammer offers to fix an annoying problem on the computer, that builds trust and increases vulnerability.

There are no perfect solutions to this problem. The Manhattan DA, AARP, and many other groups provide educational material and protective tips. They warn seniors never to give personal information to anyone on the phone, especially including a bank account number, date of birth or social security number. They note the IRS will NEVER call and ask for money. Banks have developed tools to identify atypical banking behavior. If someone never uses online banking and then suddenly is emptying an account online, that’s a red flag. If they never sent a money order and now are regularly sending large ones to foreign accounts, another red flag. Some adult children obtain a power of attorney so the older person no longer controls their money. Unfortunately, those tools can be misused—recall that a good deal of elder financial abuse comes from relatives. A more modest intervention is to gain read-only access, so that a relative can monitor an account and alert the bank if something looks fishy.

The best plan is to have relatives who will protect you and resist temptation. That’s not a solution that works for everyone. It’s hard to give up control of one’s money—a key indicator for feeling like an adult. Figuring out how to preserve control and dignity while financially protecting elders with cognitive impairment is a real challenge. And it’s one we need to work harder on right now.