Lottery Scams are on the Rise

At first, you might think your prayers have been answered.

A recent woodtv.com article, “88-year-old nearly scammed by fake lottery, warns others,” tells the story of an elderly couple who love their home. Unfortunately, they are running out of money and may need to move. That’s why it was such a godsend when a letter came in the mail telling Betty that she’d won $4.5 million in a Madrid-based lottery.

Money-256319_640“It was stamped by the government, approved by the government,” Betty said. “I just figured, all these stamps, it’s got to be real.”

The letter from Portugal arrived weeks after she’d mailed a different ball-related game of chance, a Pick Quick card that had come in a Publishers Clearing House mailing. She thought the letter was notification that her Pick Quick card was a winner.

But this was different. The letter from “The Mega Lottery Picker 2017” explained that she’d have to give 5% of her winnings to a “promotions company” and they offered to wire the money to her bank account. How convenient, Betty thought.

Fortunately, before calling the lottery company with her banking information, she first called an attorney who she was already scheduled to meet the next day to talk about the couple’s finances. Betty thought there was no need to meet because she was now rich. But the paralegal she spoke with at the law firm was suspicious and asked Betty not to call the “lottery.”

After investigating, the law firm saw that it was a scam, much to Betty’s disbelief.

This scam isn’t uncommon. For example, the federal government is now prosecuting several Jamaicans in a telemarketing lottery scheme that allegedly bilked around 100 Americans out of more than $5.7 million. Many of the victims were elderly. There’s no evidence the letter Betty received is linked to the Jamaican scam.

The Federal Trade Commission offers the following tips to recognize a scam and to avoid being scammed.

  • There’s a fee to pay;
  • You must wire the company money;
  • You’re required to deposit a check sent to you;
  • They say they’re from the government;
  • It’s a bulk mail notice;
  • They call you, even though your number is on the Do Not Call Registry;
  • You get a text message about a prize; and
  • A review online shows complaints.

If you have any questions about estate planning and/or elder law for ourself or your family, we can help.  Just click here and give us a little information and we'll get back to you!

Reference: woodtv.com (June 30, 2017) “88-year-old nearly scammed by fake lottery, warns others”


Elder Abuse Grows with Senior Population

Old ladyThe Administration for Community Living says that hundreds of thousands of older persons are abused, neglected and exploited every year, reported The Hillsdale (MI) Daily News in “Understanding Elder Abuse.” They found that one out of every 10 people age 60 and older who live at home experiences elder abuse, including neglect and exploitation. Unfortunately, this statistic is probably underestimated as many victims are unable or afraid to report the abuse.
When it comes to scams, IRS phone scam are popular. A scammer calls a senior and threatens prison time because the senior owes the IRS money. In reality, the IRS doesn’t call people.
Unfortunately, many senior citizens are the target of scammers through phone calls, email and postal mail. Scammers can use charm, intimidation or scare tactics to convince their victims to hand over cash or credit card information.
Also, many seniors don’t look at their Medicare Summary Notices (MSNs), which are received quarterly. This provides details for all of the services received and what Medicare will pay. It’s not a bill. It’s a summary of services and Medicare payments. Keep a log of when you go to the doctor or have a test or treatment so you can compare what you actually received to what Medicare paid.
There also can be problems with seniors who become attached to a caregiver, whether paid or not. This can lead to poor choices, especially when a caregiver has financial or family issues and shares these problems with a sympathetic senior. Frequently the senior can’t afford to help financially but will still do so because of his or her attachment to the caregiver.
The stealing of prescription medications from seniors is also a big problem. Sadly, statistics show that family members or friends of family members are the most likely perpetrators.
Reference: Hillsdale (MI) Daily News (July 13, 2016) “Understanding Elder Abuse”


Financial Elder Abuse on the Rise Across the US

Bigstock-Elder-Couple-With-Bills-3557267"Grappling with growing financial exploitation of the elderly, state officials are pressing for laws that require financial advisers to report suspected ‘elder fraud' to authorities."

New laws face resistance from the financial industry, which claims they could result in a massive number of false reports. People 60 years and older were involved in 171,230 fraud complaints tracked by the Federal Trade Commission in 2014. That's more than double the number in 2010, although some of that jump could come from better reporting.

The Wall Street Journal says that American retirees are exercising greater control over their finances with the decline in traditional pension plans. The article, "Officials Seek Clampdown on Elder Fraud," explains that the complexity of managing and investing savings poses a challenge, particularly as the U.S. population ages. Especially with more people projected to get dementia, this may open up the door to more exploitation.

Fraud can be anything from sweepstakes scams and bogus investment schemes to dishonest caregivers or family members stealing the senior's savings. In some instances, investment advisers or stockbrokers have been found guilty of churning accounts through unnecessary trades, resulting in high fees or losses.

Statistics show that seniors lost at least $2.9 billion to financial abuse in 2010. That was an increase of 12% in two years, according to Met Life. To help prevent this, a coalition of state securities regulators is proposing a model state law that would require financial advisers — including brokers at large investment houses and independent advisers and their supervisors — to report suspected elder financial fraud to both a state securities regulator and an adult protective-services agency.

The bill would require immediate reporting by a financial adviser who "reasonably believes that financial exploitation" of an older person "may have occurred, may have been attempted, or is being attempted." The proposed legislation affords brokers and advisers civil immunity from privacy violations for reporting suspected fraud and gives them the authority to place a hold temporarily on suspicious account disbursements.

Supporters say advisers and brokers are in a prime position to flag early warnings about exploitation. However, financial-industry trade groups are pushing back, arguing that the reporting requirement would overburden state agencies. And some financial advisers worry they could be hit with a lawsuit if they miss an abuse case since about 40% to 50% of all "red flags" of suspicious activity turn out to be false. This is according to the Securities Industry and Financial Markets Association, the main Wall Street trade group. But a "voluntary" reporting system would let securities firms look into these claims in-house before going to authorities.

Roughly half of the states require elder fraud reporting by certain financial professionals, but these laws don't always extend specifically to financial advisers. And all states have an adult protective-services agency to investigate reports of abuse, neglect, and exploitation of the elderly; however, dementia, embarrassment, or reluctance to report family members all contribute to low disclosure rates. In fact, a 2014 survey found that 44% of agency officials said financial institutions were frequently unwilling to provide a client's records, and 40% reported long delays obtaining these records.

FINRA, the Financial Industry Regulatory Authority, Wall Street's self-regulator, recently drafted its own rule to permit firms to put temporary holds on suspicious account disbursements — although it doesn't have a provision for mandatory reporting. Right now when financial advisers suspect an aging client is being taken advantage of, many say they are hampered by strict rules governing the execution of trades and processing of withdrawals. They also are concerned with violating privacy laws if they report these concerns.

Reference: Wall Street Journal (December 29, 2015) "Officials Seek Clampdown on Elder Fraud"


Guardianship Abuse Is Rampant

Bigstock-Female-hands-with-word-guardia-89442698Guardians are supposed to look after and protect the interests of their wards. Unfortunately, it has become all too common for guardians to take advantage of their wealthy elder wards.

The purpose of court appointed guardians is a simple and noble one. When a person is not competent to handle his or her own affairs, then a court can appoint a guardian to act on the person's behalf. The guardian is supposed to act selflessly and in the best interests of the ward.

However, as the Wall Street Journal reports, in "Abuses Plague Guardianship Systems Across the Country," the financial abuse of elderly people by guardians is rampant throughout the United States.

Court appointed guardians with no family relationship to the elderly wards too often act in their own interests and deplete the wealth of the wards.

This problem is mostly avoidable through estate planning. Part of a good estate plan is planning for end of life issues and getting a general durable power of attorney and a health care power of attorney. With those two documents, you can appoint someone you know and trust to look after your financial and medical affairs in case you are ever not competent to do so. Doing that can often make the appointment of a guardian unnecessary.

Even if a guardian is necessary, a court will likely appoint the person you have already designated as trustworthy whenever possible.

Do not fall victim to an abusive guardian.

Schedule an appointment with an estate planning attorney and get the documentation that you need to make your own decisions about who should look after your affairs if you are not able to do so.

For more information about estate planning, please visit my estate planning website.

Reference: Wall Street Journal (October 30, 2015) "Abuses Plague Guardianship Systems Across the Country"


New Protections for Elderly Investors

DownloadTwo years after New York socialite Brooke Astor died in 2007, her son, Anthony Marshall was convicted of bilking her of millions of dollars. The heiress suffered from dementia, and did not know that her son, charged with her care, was paying himself from her assets. The Astor story is surprisingly common: a growing number of Americans suffer from Alzheimer's or another form of dementia and a sizeable percentage of those patients will fall victim to scams.


A recent Reuters article, titled “Protecting dementia sufferers from scammers gains ground in U.S,” says that states are now trying to provide greater protection for elderly investors. Three states have enacted laws that permit retail brokers to help deter scams against people with dementia.


The laws, which are being examined by other state legislatures, allow brokerages to halt an older client’s request to transfer money to others (at least temporarily) if a wealth manager suspects that his or her customer may have dementia and may be unknowingly be the victim of a scheme.


More than 5 million Americans over the age of 65 have Alzheimer's disease, which is the most common form of dementia, the article says. Citing the Alzheimer's Association, that figure accounts for roughly 1.5% of the U.S. population. Experts say this could grow to 7.1 million by 2025. 


The elderly are often easy targets for con artists and unscrupulous family members. In fact, U.S. seniors lose approximately $2.6 billion annually to financial exploitation. And more than half of this financial exploitation is committed by friends, family members, or caregivers.


Elder financial abuse is frequently hard to detect, but the article explains that requests for large, "questionable" sums of money can often be a clear sign.


Philip Marshall (Anthony's son and Astor's grandson) commented that these new laws might have helped protect his grandmother. The younger Marshall is a professor of historic preservation in Rhode Island who recently went on sabbatical to devote more time to elder protection issues.


Brooke Astor was an heir to the Astor family fortune that started back in the 18th century. She passed away in 2007 at age 105, and had a $200 million estate. Most of this was earmarked for charities. Unfortunately, her son exploited part of her estate that was to be used for her personal expenses. He paid himself roughly $1 million for managing her affairs in 2006, as was revealed in a court proceeding.


Some have concerns about these laws and think that perhaps the government could empower wealth managers to interfere with legitimate transactions and keep elderly people from their investments, the article reports. FINRA, an industry watchdog, is also developing guidance on the issue, with input from the SEC, as brokerages have asked for clarity on this because of rules that require them to execute a customer’s transaction.


Roughly half of the states have laws that require employees of financial institutions to contact state agencies if they suspect an elder customer is being financially exploited. However, many of these laws do not include retail brokerage employees or allow those institutions to delay withdrawals.


Brokerages are often put in a tough position when this situation arises. Contacting concerned family members to question an elderly client's instructions could run afoul of laws about protecting privacy, as well as rules that require processing transactions on time. That said, following the client's instructions can help the customer who otherwise may fall victim to a con or abusive caretaker. As it stands in most states, brokers could be liable for taking action or honoring such a transaction.


Contact an experienced estate planning attorney for guidance on how trusts may be used to help curb this abuse.


For more information about estate planning, please visit my estate planning website.


ReferenceReuters (July 1, 2015) “Protecting dementia sufferers from scammers gains ground in U.S.”

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