Cognitive decline and dementia make it difficult for older Americans to manage their own finances. This is particularly true because of the plethora of new banking technologies that make remembering passwords, complicated security codes, and pins more essential than ever before.
Alzheimer’s disease, which affects one in eight Americans over the age of 65, is the most common cause of dementia, a decline in memory and cognitive abilities that interferes with daily life. This decline also makes Alzheimer’s patients more susceptible to financial abuse and investment fraud.
Millions of Americans, many with dementia, fall victim to financial fraud and abuse each year. People with dementia are at increased risk for financial abuse because of:
• Difficulties judging risk;
• Difficulties understanding complex strategies;
• Solitary living environments;
• Reliance on professionals, friends, and family for many of life’s necessities;
• Reduced ability to spot deceit;
• Declining ability to remember financial information; and
• Declining ability to process visual information.
Additionally, an increasing fear of poverty, especially in today’s market, often causes people with dementia to fall prey to get-rich-quick schemes.
“The fact that dementia is a progressive condition has particular implications when it comes to managing money. There is often a slow deterioration in the person’s ability to carry out tasks such as paying bills, dealing with paperwork, or making decisions about property and investment,” stated a Dec. 2011 Alzheimer’s Society report, titled “Short Changed: Protecting people with dementia from financial abuse.”
What You Can Do:
Talk to your loved one about financial abuse. Protecting your loved one from financial abuse starts with talking to them about their current financial status, their current mental status, and the reality of financial abuse. “The difficulty of discussing financial issues was one of the most common problems raised by professionals undertaking safeguarding work with people with dementia,” stated the Alzheimer’s Society report. “Finances are often seen as a personal or private matter for most of people, and many are reluctant to admit they are having difficulties, or have been scammed or similar. Without these discussions, however, practitioners found it hard to talk with families. Being able to ask relatives the right questions can help to detect signs that someone is at risk.”
Prevent cold-calling. Nearly two-thirds of those surveyed for the Alzheimer’s Society report said the person they cared for had been approached or cold-called with unsolicited financial offers. This increases the risk that they will fall prey to a scam. Consider adding your loved one’s phone number to the National Do-Not-Call List. For information on what calls are covered and how to get on the list, visit the
Federal Trade Commission’s website.
Monitor accounts. More than three-fourths of people with dementia experience difficulties managing their money, but most want to stay involved in their finances for as long as possible. Even if you’re not taking over all of your loved one’s financial transactions yet, find out if they’d be okay with you checking for suspicious activity. Then, monitor statements and online accounts on at least a monthly basis, and make sure to look for unauthorized transactions, large withdrawals, and suspicious activity.
Report any problems. According to the National Center on Elder Abuse, about five cases of elder abuse go unreported for every one reported case. While there isn’t a federal agency that handles abuse cases, you can – and should – report elder financial abuse to your state agency.
Visit the National Center on Elder Abuse website for links and contact information.