Elderly Financial Abuse is on the Rise, We Have an Ambitious Plan to Tackle It

Guest author: Helene Alunni, CEO and Founder at The Silverlining.ai
November 9, 2023

In this article, Helene Alunni emphasizes the significance of World Elder Abuse Awareness Day, particularly regarding financial abuse against older adults, which costs US seniors around $36.5 billion annually and is often underreported due to shame and lack of support. To combat this issue, The Moonshot Initiative, led by professionals globally, has launched an open-source manifesto with recommendations in 11 key areas to address elder financial abuse and invites participation to create a change.

Since 2006, 15 June has been designated as “the World Elder Abuse Awareness Day,” by the International Network for the Prevention of Elder Abuse (INPEA), and was recognised as a United Nations Day in 2011. While that day is meant to remind us all of the importance of preventing elderly abuse overall, financial abuse stands as a category of its own under that umbrella due to its magnitude, wide-reaching effect, and complexity to detect or prevent.

A global and fast-growing phenomenon, elderly financial abuse is estimated to cost US seniors as much as $36.5bn each year. This number is very likely a low estimate as frauds are not systematically reported, due to the victim's shame, lack of support, and, ultimately,  absence of incentive to do so. Indeed, reporting the fraud not only makes them re-live the trauma but has no effect on recovering lost funds.

The tragedy of financial abuse on elderly people is far-reaching. It obviously has lasting devastating effects on the main victim, and it equally affects their family members and support system. Those often have to deal with the aftermath of the situation and are left to struggle to (re)cover for the loss. 

The scars of financial abuse go way beyond monetary. They are also psychological. The scams frequently run over a period of time (sometimes years) during which the victims are progressively groomed and isolated by the perpetrators in order to better prey on them. By the time the fraud is uncovered, victims have been cheated of large amounts of money, are left very vulnerable, and are humiliated by the situations they have gotten into.   Moreover, they are often unaware of where to turn for help. The fraudsters operate using sophisticated mechanisms and leveraging the latest technologies available, making it hard to anticipate their scams and pre-emptively protect elderly customers. They also take advantage of legal loopholes to commit their crimes, enlisting the unwitting participation of the victims. As a result, illegitimate financial transactions (e.g. wires made to dubious countries, payments sent to unknown beneficiaries, or withdrawal amounts totally out of pattern) cannot be systematically stopped by financial institutions since they have been legally authorised by the victims

Unfortunately, the regulatory frameworks in the US and in Europe provide only limited guardrails to prevent financial abuse or pursue perpetrators. 

Convinced that elderly financial abuse demands greater focus and a multi-pronged strategy to address the many issues it raises, a group of pluri-disciplinary professionals from across the globe has launched an open-source manifesto (The Moonshot Initiative – under the leadership of Ron Long). 

Our recommendation is based on 11 key areas that all require dedicated and coordinated efforts:

  1. Awareness - Increase the visibility of elder financial abuse
  2. Prevention - Stopping it before it happens
  3. Red Flags - Identifying early signs
  4. Proactive Systems and Processes - How to automate alerts
  5. What to Do When Detected Early - Key steps to take
  6. Communication - Necessity of sharing information
  7. Accountability - Consequences for action or inaction
  8. Enforcement - Using the law to its full extent
  9. Research - Gathering and sharing quantitative and qualitative data
  10. Legislation – Sizing and evolving the laws
  11. Technology - Using 21st-century innovations

We invite you to join our effort by sending your comments, thoughts, and suggestions by September 15, 2023, at moonshotinitiative@gmail.com.

Help us make elderly financial abuse a problem of the past!

You may also want to check the course 'Introduction to Age-friendly Banking' that is closely aligned with the subject matter of this article.

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