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If this year is anything like last, baby boomers and older Americans should be on guard this holiday season. Instances of financial abuse and fraud against the elderly increased from November 2010 to January 2011, according to a recent report from MetLife, which found overall investment fraud targeted towards older Americans is on the rise.
Americans over the age of 65 lost nearly $3 billion to financial abuse from April to June 2010, up 12% from the same period in 2008, according to the report. During that time, 51% of the fraud cases reported were perpetrated by strangers, 34% by family, friends and neighbors and 12% by businesses.
But in a separate look at the holidays, MetLife reports fraud by family and friends increased to 45%.
With the baby boomer generation reaching retirement age and comprising 25% of the U.S. population, financial investment fraud is becoming a bigger and more problematic issue facing the country.
The North American Securities Administrators Association found the number of criminal complaints and enforcement actions at the state level against investors 50 years or older more than doubled in 2010 from 2009, reports The Wall Street Journal. And state security officials expected the number of enforcements actions for fraud against that same age group to hit a record this year.
Not only are the boomers older and more vulnerable, but "they tend to have more assets that they tend to rely on to live out through retirement years," says Raj Date, Special Advisor to the Secretary of the Treasury and acting head of the Consumer Financial Protection Bureau. This combo makes them a more "attractive pray for would be scammers."
Coupled with the fact that the Dow Jones Index is down nearly 15% since its high back in Oct. 2007, that's a recipe for disaster. As older investors who have lost much of their retirement look for quick fixes to recoup losses, they become even easier targets of fraud.
"It is a real problem today and at the CFPB we want to make sure that we get out ahead of problems before they become more serious," says Date.
In an effort to do so, the consumer watchdog has launched the office of Financial Protection for older Americans to help educate seniors on all types of investment matters, including fraud. For more information consumer and investors can visit the Consumer Financial Protection Bureau's website.
In the meantime, Date does have one piece of advice to guard against fraud against older Americans.
"If it sounds too good to be true you should probably look again, because most things that seem too good to be true, in fact are not true," he says.
That may be a truism, but it's one everyone can benefit from in every area of our lives.
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