Financial Abuse Of Older Pennsylvanians Costs Millions
January 25, 2021 • By Jack Dooley
Older Pennsylvania residents lost about $56 million to financial exploitation during the 2017-2018 fiscal year, according to a recent state study. The losses are just one sign of the growing problem of financial abuse of seniors.
The situation worsens when the perpetrators of the financial abuse are identified. The study found that adult family members were responsible for 65 percent of the cases. Of that number, 42 percent were adult children.
More than half of the cases studied involved unauthorized bank withdrawals. Scams were the second biggest form of exploitation.
“The results of this study are eye-opening and alarming,” said Pennsylvania Secretary of Aging Robert Torres. “Financial exploitation is an underreported crime that not only harms its victims, but also has a corrosive effect on Pennsylvania’s fiscal health, as older adults whose income and assets have been drained by this crime are more likely to need assistance from publicly funded programs.”
Cases of financial abuse are on the rise in Pennsylvania. In fiscal year 2018-2019, 36,101 cases were reported, an increase of nearly 50 percent from the 24,413 cases reported in 2015-2016. Many financial exploitation cases go unreported with the study estimating that as few as 1 in 44 are shared with law enforcement.
Older adults are at an increased risk for financial exploitation due to health changes which occur during the natural aging process, as well as their steady income, accumulated wealth, and retirement savings.
The average victim of financial abuse is a 79-year-old female who lives in an urban area and has an income above federal poverty guidelines. The average amount lost in the cases analyzed was nearly $40,000.
Unauthorized bank withdrawals constituted the largest percentage of total loss to older adults. On average, the withdrawals resulted in a loss of more than $35,000. Insurance proceeds due to insurance fraud averaged a loss of $107,442 per victim. Victims of scams lost an average of $63,408. The largest scam nationwide is impersonation of the Internal Revenue Service. More than $72.8 million was lost nationwide in IRS scams.
Family members were the most likely perpetrator of financial abuse. The study found that 42 percent of those committing the abuse were adult children followed by adult grandchildren at 10 percent, other family members at 9 percent and spouses at 4 percent. Care providers were responsible for 15 percent of the cases.
As an older adult’s income and assets decrease due to financial exploitation, they are more likely to need state and federally funded programs to meet their basic needs such as Medical Assistance and Medicare.
The study’s recommendations to combat financial abuse include updating the state’s Older Adults Protective Services Act to expand mandatory reporters, require background checks for long-term services and support staff and establish a process to report suspected exploitation of financial institutions. The recommendations also include an increase in prevention education and the creation of an intra-agency team to identify barriers related to early detection and prevention.