Dealing with a rise in financial exploitation of the elderly, state officials are pressing for laws that require financial advisers to report suspected “elder fraud” to authorities, reports the Wall Street Journal. The mandate faces pushback from the financial industry, which says it could result in a massive number of reports that turn out to be false. People over 60 were involved in 171,230 fraud complaints tracked by the Federal Trade Commission in 2014, more than double the number in 2010. Retirees are exercising greater control over their finances, given the decline in traditional pension plans. The complexity of managing and investing savings poses a challenge. The aging of the population, and a greater number of people with dementia, has opened up avenues for exploitation.
The fraud ranges from sweepstakes scams and bogus investment schemes to dishonest caregivers or family members skimming funds. Some investment advisers or stockbrokers churn accounts through unnecessary trades, resulting in high fees or losses. Elder financial abuse is expected to “grow dramatically,” says Rick Fleming of the U.S. Securities and Exchange Commission. Older Americans lost at least $2.9 billion to financial abuse in 2010, up 12 percent in two years, says Metropolitan Life Insurance Co. A coalition of state securities regulators has proposed a model state law that would require financial advisers to report suspected elder financial fraud to both a state securities regulator and an adult protective-services agency.