The Shocking Cost of Financial Exploitation
Does the amount $3 billion shock you:? What about $36 billion? According to an article in Consumer Reports, Financial Elder Abuse Costs $3 Billion a Year. Or Is It $36 Billion?, the exact amount is unclear. Here’s how the $3 billion figure came about, according to the story:
When Consumer Reports recently reported on elder financial fraud, Lies, Secrets, and Scams: How to Prevent Elder Abuse, we used the number $3 billion. It comes from a study published in 2011 by the MetLife Mature Market Institute, in collaboration with the National Committee for the Prevention of Elder Abuse and the Center for Geronotology at Virginia Polytechnic Institute and State University. We rounded up from that study’s estimate of $2.9 billion annually….
…
We chose that figure because a number of experts we interviewed thought it was a credible figure. But they—and an author of the study—admitted to us when we first reported it a couple of years ago that the figure probably represents the tip of the iceberg. The figure is probably far larger than that.
We have all heard the tip of the iceberg analogy with the number of cases of elder abuse, since we know that elder abuse cases are under-reported. The article goes on to explain the $36 billion figure which came from TrueLink which “projected that financial elder abuse costs families more than $36 billion a year,” Their study used a more expansive view of financial exploitation, including fraud and scams as well as financial exploitation. The article notes that Investor Protection Trust estimates that 20% of elders have been victims.
The author of the article explains the title.
Though the article focuses on financial exploitation at the hands of strangers, the headline encompasses abuse by all types of con artists, including family members and people the senior knows. When discussing stranger-initiated abuse, we couldn’t arrive at a figure that made sense to us. Experts I consulted through a listserve used by professionals in the elder-abuse prevention and treatment community couldn’t agree on a figure themselves. However, several professionals I interviewed said they were comfortable with saying it was in the “billions.”
The point of this difficult exercise is that no really one knows how big the problem is. But clearly, it’s huge. And until seniors feel comfortable reporting their victimization—and there’s a standard way to define it and a central place to report it—we’ll never know the total impact. Here’s hoping that day comes, so the individuals working to help victims and prevent the crime can get the attention and resources they deserve.
Assign this article to your students. It illuminates a number of the issues in these cases. Regardless of whether the total is $3 billion or $36 billion, the numbers are shocking.