Advisors ( insurance advisors, financial planners, eldercare planners, accountants, wealth managers, investment managers) are very important to their older clients who are increasingly victims of elder fraud. These clients are lonely, often isolated, starved for companionship and vulnerable to the slick hustle of fraudsters.
These older clients should be reaching out to their trusted advisors when they are approached by strangers eager to be friends and to get too close too soon. That is what happened to a recent victim of elder fraud.
Case Study:
Ellen was 68 years of age. She lived in a small community in her own home. It had been fully paid for years ago. Her husband had died 3 years ago. She was lonely and somewhat isolated. Her daughter lived about 90 minutes away.
A couple befriended Ellen. They were charming and very warm and accepting. They were entertaining. They told stories about their exciting life experiences. Ellen was enthralled. She and the couple became very close. They told her about some excellent investments. They invited her to invest. She trusted them. She signed some blank cheques for them and some other documents. She did not ask her advisor for help. She did not ask her daughter for advice.
The outcome was catastrophic. The couple were slick fraudsters. They had Ellen sign applications for mortgages. They had her sign some blank cheques. She did not know their real identities.
Unfortunately, Ellen has severe dyslexia. She can not read or write. She is able to converse. She had always worked but this learning disability has been life long.
The first thing that the crooks did was to wire $100,000 into her bank account and then withdraw it with the blank cheques. They did this a few times to groom her bank account for what followed. They were also laundering money. Illicit money.
Then Ellen got notices from the 3 mortgage companies demanding payments. The first mortgage was for $280,000. The fraudsters applied for the mortgage secured by her home which was worth about $850,000. The mortgage money floated into her account and then was withdrawn by the fraudsters. The bank had seen large transactions that had cleared so nothing was suspected. The total fraud was over $500,000. Ellen will likely have to sell her house to pay down the mortgages.
This was a perfect opportunity for Ellen to call her advisor. To read the documents. To uncover the fraud. And to save her estate.
Unfortunately, Ellen did not have an advisor and thus became a victim of elder fraud. This is a very important role for advisors to take in preventing elder fraud.