Federal agency ramps up effort to combat financial scams against elderly

Andrew Harrer/BLOOMBERG - “The amount of money stolen from seniors has risen sharply in recent years,” Consumer Financial Protection Bureau Director Richard Cordray said.

The Consumer Financial Protection Bureau is seeking public input for a new effort to prevent scams targeted at the elderly.

The CFPB is asking the public about the best way to identify legitimate financial advisers and how effective and easy-to-understand financial counseling is for seniors, among other issues. The bureau is also trying to gather information about scams against veterans.

“The amount of money stolen from seniors has risen sharply in recent years,” CFPB director Richard Cordray said in a prepared statement.

Cordray cited a 2009 study by MetLife, which found that Americans aged 60 and up were cheated out of at least $2.9 billion in 2010. This reflected a 12 percent increase from 2008, the study said.

Another survey by the nonprofit Investor Protection Trust said that one out of every five Americans over the age of 65 had been financially swindled in 2010. The organization called elder financial abuse “a national epidemic.”

Past research on the finances of the elderly found that family members and caregivers were most often the perpetrators of financial abuse. Elderly women were also more likely to be targeted than men.

“It is indeed a jungle out there,” said Clare Smith, interim executive director at the Elder Financial Protection Network, a 12-year-old nonprofit organization in San Francisco.

The network conducts training sessions with local communities, law-enforcement agencies and financial institutions to educate them about scams and prevention.

Smith said it wasn’t hard to believe that fraud was on the rise. She cited an instance from last week, when an 82-year-old California man almost parted with his savings on the belief that he had won a sweepstakes. When he came into the bank to withdraw his money, the bank official spotted a red flag because of her training and reported the case.

At a White House event to mark Friday’s World Elder Abuse Awareness Day, Skip Humphrey, head of the CFPB’s Office for Older Americans, said the department has a number of projects lined up to address the issue. They include creating a layman’s guide to explain financial responsibilities to family members and caregivers of seniors.

“This is a good development,” said Bob Blancato, former president of the National Committee for the Prevention of Elder Abuse. “It shows that the government is cognizant of the growing nature of the problem.”

The public can submit comments or report instances of financial abuse to the CFPB by visiting www.regulations.gov or mailing them to Monica Jackson, Office of the Executive Secretary, Consumer Financial Protection Bureau, 1700 G St. NW, Washington, D.C., 20552. Mention Docket No. CFPB-2012-0018.

The last date for comments is Aug. 13.

 
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