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Nov 28, 2018

Elder Financial Abuse Prevention Requires a Watchful Eye

Rosemary Lamaestra, CPA, CFEBy Rosemary Lamaestra, CPA, CFE


MoneyLife100When someone we know – either a family member or a friend – becomes ensnared in elder fraud, often we think, “How could they fall for such a scam?” Sadly, the wrongdoer knows exactly what to do and how to do it: the victim trusts this person and does not realize they have been scammed until sometime later. Elder fraud is growing in Pennsylvania and in the country. And we all can play a part in greatly reducing these scams.

Elder couple victims of fraudSome typical types of abuse include the following:

  • Medicare/health insurance scams
  • Telemarketing scams
  • Investment scams
  • Reverse mortgage scams
  • The grandparent scams

In a Medicare scam, fraudsters impersonate a Medicare agent asking to update information or claiming that the victim is owed a refund from the insurance company. The caller asks for a bank account number and Social Security number. The scammer then uses your insurance to see a doctor, obtain prescriptions, buy medical equipment, or file a false claim.

Likewise, telemarketer frauds trick seniors into thinking they have won something or cannot live without what they are selling. They then obtain personal information and steal from their accounts. Investment and reverse mortgage scammers can talk elders into giving up their retirement income and homes. They are ruthless.

One of the worst has to be the grandparent scam. This not only robs the person of money, it strips them of their dignity and leaves them utterly embarrassed. A typical scenario would be where a thief calls an elderly person and pretends to be a grandchild, saying they have been arrested and are in jail. They ask for money to be wired to get them out of jail. They ask that the grandparent not tell their parents because they don’t want to get into trouble. The worried grandparent frequently rushes out to purchase a money card, thinking they are helping a family member. If you know of anyone that this happened to, you know how embarrassing and humiliating it can be.

In this video clip, the Pennsylvania Department of Banking and PICPA members discuss different types of elder fraud and what can be done to protect someone from getting caught in these traps.

As mentioned in the video, some red flags indicating fraud may be occurring include unpaid bills, forged signatures, debts piling up, complaints about missing money, and a change in lifestyle for the worse. Start the conversation now. Talk with your elders and stress the importance of reviewing bank and investment statements. They may be reluctant at first, but if you share with them some of the horror stories – and there are plenty – it should make an impression. They might even welcome your help. Let them know that if they receive a call asking for personal information to tell the person calling or knocking at the door that they prefer to have a son or daughter present when discussing money matters.

Should a loved one become a victim, call the bank or credit card company involved. Cancel debit and credit cards linked to the stolen account, and reset PINs and passwords on other accounts. Depending on the severity of the theft, you may need to contact one of the credit reporting bureaus, the police, the FBI, or the state attorney general.

CPAs can help, too. CPAs can educate their clients about the looming threats and, if they suspect fraud, they should report it immediately. Consumers, both young and old, should speak with their accountant to find out how susceptible they or their loved ones may be. The PICPA has additional resources that can assist with identifying and avoiding fraud.


Rosemary Lamaestra, CPA, CFE, is a manager at RLB Accountants in Allentown, Pa. A PICPA member, she serves on its CPA Image Enhancement, Bylaws, and Forensic committees, and is chair of the PICPA Lehigh Valley Chapter’s Member Services Committee. She is a past president of the Lehigh Valley Chapter.




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