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Fighting financial scams aimed at seniors

Sally Hurme figured that if anyone knew about financial scams targeted at older Americans, it would be her family and friends. After all, Hurme, an attorney and AARP project adviser, had spent two decades educating seniors across the country about fraud and how to avoid it.

That’s why she was so shocked when her own husband, Art, 71, became the victim of a fraud in January. The retired Army Corps of Engineers marine biologist wound up losing $3,000 in an “imposter scam” after receiving a call at his Alexandria, Va., home from a sobbing woman claiming to be his daughter. She told him she had been in a car accident and was under arrest for drunken driving in California and needed money to get out of jail.

“Art knew about all kinds of scams, but not this one,” Hurme said. “And if it could happen to him, it could happen to anyone.”

State legislators have become increasingly concerned about financial crimes against seniors and vulnerable adults.

“The real innovations are happening at the state level,” said Mary Twomey, co-director of the National Center on Elder Abuse at the University of California, Irvine. “The states are definitely stepping up.”

This year, lawmakers in at least 28 states and the District of Columbia introduced legislation addressing the issue. Some measures focus on enhancing criminal penalties. Others target caregivers who exploit elderly charges. Some require financial institutions to report suspected exploitation.

No one keeps statistics on exactly how many seniors have become victims of financial fraud or exploitation. Often, they don’t report it to authorities out of shame or embarrassment. But there is growing evidence that the problem is substantial. The Federal Trade Commission’s Consumer Sentinel Network database, which collects consumer complaints and makes them available to law enforcement, contained 123,757 fraud complaints in 2013 from victims who had identified themselves as age 60 and over.

A 2011 study by MetLife estimated that the annual loss to elderly victims of financial fraud (perpetrated by strangers) and abuse (perpetrated by family, friends or neighbors) was at least $2.9 billion, a 12 percent hike over its 2008 estimate.

And a study released this month in the Journal of General Internal Medicine found that one in 20 older adults in New York State reported that they had been financially exploited, usually by a family member, but sometimes by a friend or home care aide.

“When you’re an elder and you cannot recoup the money, these financial crimes are devastating to your peace of mind and to your actual health and welfare,” Twomey said. “People often never see that money again. A lot of times the scam artist is in another country. And if it’s a family member who’s committed the financial abuse, the money often has gone up somebody’s nose or to their gambling problem.”

Authorities say financial crimes against seniors can be perpetrated by someone they know or by a stranger. Victims run the gamut from savvy investors who play the stock market to people with dementia who need in-home care.

Relatives and caregivers can misuse a victim’s credit cards or ATM without permission or deceive them into signing away a deed or opening a joint bank account or giving them power of attorney.

Professional con artists prey on victims using high pressure tactics to sell a product or service that’s unnecessary or overpriced. Scams range from notifying victims that they’ve won a bogus sweepstakes to soliciting donations to a fake charity or pitching a phony investment opportunity.

Odette Williamson, a staff attorney at the National Consumer Law Center, said scams against the elderly are becoming increasingly sophisticated.

“Our population is aging rapidly,” Williamson said. “A lot of the older adults have a substantial amount of assets, so they’re sitting targets.

Art Hurme, the Virginia fraud victim whose wife works at AARP, said he sympathizes with other seniors who’ve been scammed.

Hurme, who wears hearing aids, said he got a noontime call in January from a woman claiming to be his daughter, a Virginia high school teacher. Her voice was muffled and the connection was bad. She said that she had taken a last-minute trip to a funeral in California with a friend and had been in a car accident and was being charged with drunken driving.

Hurme said he thought it all sounded strange, but she was convincing, as was her “court-appointed attorney,” who told him the charges would be dropped if he would send $3,000 to pay the medical expenses of a woman injured by his daughter in the accident.

“These people were slick, and it was totally scripted,” Hurme said. “She told me she hit her mouth on the windshield, which was why she could hardly talk. And my daughter rarely drinks, but they explained that by saying she had gone to a bar to have a glass of wine with her friend and that she got in an accident trying to change lanes.”

As instructed, Hurme rushed to his bank, and then to Walmart, where he bought six $500 MoneyPak reloadable debit cards. The cards give instant access to cash and are untraceable. He returned home and read the card numbers to the “attorney” over the phone. He waited for a call back to assure him that his daughter had been released from jail, but that call never came. His money was gone.

Hurme’s wife, Sally, calls it a classic “imposter scam,” in which a senior gets a call out of the blue from someone claiming to be a grandchild or other relative saying he or she is in trouble or has been arrested and needs to have money wired to them.

Fraudsters typically warn the victim not to contact anyone else. Hurme said his “daughter” swore him to secrecy, saying she was embarrassed about the DUI arrest. But as soon as his wife came home and started asking questions, she knew immediately that it was a scam.

“I felt pretty bad. Really stupid,” Art Hurme said. “I’ve got a master’s degree and worked at the Army Corps for 38 years. This scam worked because of the urgency and their insistence that I not call anyone. If I had, their whole house of cards would have collapsed.”

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