About 35 percent of the 25 million people in the United States aged 71 or older have mild cognitive impairment or dementia, according to a 2008 Duke University study. Most older adults with mild cognitive impairment can perform typical daily functions, but financial management can get tricky and confusing, making it more likely that this group — particularly widowed women — will make poor financial decisions and be more susceptible to fraud.
A MetLife study found last year that financial abuse costs older Americans more than $2.6 billion a year. In addition, a May survey of 2,022 adults by the Investor Protection Trust found that 7.3 million older Americans — one out of every five citizens over the age of 65 — have been financially victimized. Meanwhile, more than a third of children say it is not very likely at all that they would be able to figure out that their parent had been swindled.
It was for reasons just like these that Dr. Robert Roush, an associate professor of geriatric medicine at Baylor College in Houston, Tex. instigated a 2008 pilot project to train doctors to detect victims of fraud or individuals who might be susceptible to fraud among their older patients. Doctors were also asked to report signs of financial exploitation to the Texas State Securities Board.
Six months later, more than half the 67 doctors who participated had found at least one patient who appeared to have been victimized or was highly vulnerable to financial abuse.
Roush says he got the idea for the program after reading an article by Christopher Cox, then chairman of the U.S. Securities and Exchange Commission, whose own parents were pestered with unsuitable annuity and mortgage pitches.
“If the parents of the chairman of the Securities and Exchange Commission can be duped, it could happen to anybody,” Roush says.
The physiological problem, according to Roush and other geriatric experts, comes from the erosion of the brain’s orbitofrontal cortex. That part of the brain controls a person’s capacity for executive function, and if it is damaged the likelihood of a person making competent decisions decreases, and it also becomes more likely that he or she will be less risk averse. The financial ramifications of such behavior can be detrimental, so it’s crucial that doctors identify mild cognitive impairment early and provide patients and care providers with information and resources.
“I talked to my mama about [her money], and I thought I should start asking all my patients about it. We asked patients if they would be offended if their doctor approached the topic gingerly, and they said ‘no,’” Roush says. “We’ve been raised in a society where we don’t talk about money, but you don’t have to ask them how much money they have, you just have to ask them if they’re confident. If you have suspicion that there is mild cognitive impairment, then you should refer them for further neuro-psych tests or to a professional source such as a professional geriatric care manager.”
It doesn’t take a doctor to ask the right questions, however. Children and caregivers of the elderly can detect financial vulnerability by asking about how comfortable their loved one is managing money and about any recent decisions he or she might have made.
“A red flag is giving anybody power of attorney, changing a will or having trouble managing money,” Roush says. “We want older people to be thinking about advanced directives and giving power of attorney, but then there is great financial risk in giving it to the wrong person. You’ve got to know who is managing your money and how that is going.”
After learning of the results of the Baylor pilot project the Investor Protection Trust, a Washington D.C.-based nonprofit funded by securities-industry settlements, offered to support expanding the project nationwide.
So far, 30 state securities regulators, a host of national medical associations and national groups of doctors and elder-abuse investigators have gathered to create the Elder Investment Fraud and Financial Exploitation project. Participants include the North American Securities Administrators Association, National Adult Protective Services Association, the American Academy of Family Physicians and more, all of which are committed to helping medical professionals and adult protective services workers spot financial abuse and report it to authorities.
“If health care professionals are to be used as a front line in identifying individuals who could easily be victims of fraud or abuse, clearly a behavior change needs to take place,” says the IPT survey report.
But the issue arises that there are already many regulators in California that are supposed to be stopping financial fraud, but they are just trying to keep their heads above water as of late due to budget shortfalls and resource cuts.
“With program cuts in the community, we are seeing fewer mandated reporters — fewer eyes and ears — in the community. For example, Meals on Wheels was cut, and they were great reporters for us,” says Heidi Richardson, a licensed clinical social worker with Sacramento County Adult Protective Services. “So if doctors are trained, that would be helpful because there simply aren’t as many people watching out for the elderly.”
Sacramento County is just one of myriad jurisdictions experiencing cuts to its protective services budget. In addition, Sacramento County’s office hasn’t seen a budget increase since 2001.
“We’re just maintaining. We’re not able to process referrals as timely [as we would like] because of the amount of referrals coming in,” says Program Manager Elizabeth Foster-Ward.
Because social services are struggling on so many levels, family members of the elderly need to take it upon themselves to be proactive in assessing and managing their loved one’s mental health and financial stability, these experts say.
“Adult children might not live in the same town or the same state as the parents, and they might not know that the bills are piling up,” Foster-Ward says. “Elders who are alone are the ones who are really in trouble.”
Until about a year ago, 86-year-old Clair was living in her own home on the East Coast with her husband of 60 years. When her husband died suddenly, her daughter quickly moved Clair into a senior living complex in Sacramento to be near family.