Crime and Abuse Against Seniors:
A Review of the Research Literature With Special Reference to the Canadian Situation
5. CRIMES AND FORMS OF ABUSE POSING THE GREATEST THREAT TO SENIORS
5.1 Financial Crimes by Strangers
According to the United States Department of Justice, financial crimes are aimed at seniors with alarming frequency. Between 20 to 40 percent of elder abuse cases involve financial exploitation (National Center on Elder Abuse, 1998; Tueth, 2000; Shiferaw et al., 1994). Telemarketing fraud alone costs American consumers $40 billion per year (U.S. Senate, 2000). It has been estimated that just one in every ten thousand fraud cases are reported to the authorities (O'Hanlon, 1997). Underreporting may be prompted by shame, the desire to protect a family member, or the fear that victimization may be viewed by others as a sign that the senior can no longer care for him/herself (Federal Bureau of Investigation, n.d.). The failure to report offences is problematic because law enforcement resources are not mobilized in many cases, little is learned about these crimes and their perpetrators, and perpetrators are likely to continue offending due to a lack of consequences for their actions.
The majority of financial crimes against the elderly fall in two general categories:
- fraud by strangers and
- financial exploitation by relatives and caregivers
(Johnson, 2002). This section deals with the first category.
5.1.1 Types of Financial Crimes
Fraud in general refers to the deception of victims by offering them goods, services, or other benefits that are non-existent, unnecessary, or misrepresented in some way. While there are hundreds of different fraudulent schemes, there are a number of common variations (Johnson, 2002; Los Angeles County DA's Office, 2009), including:
- The false promise of a valuable prize that may be retrieved by the victim for an advance fee. Once the fee is paid, the prize is not delivered or is worth far less than the fee.
- Victims are convinced to invest in gems, real estate or stocks that turn out to have little value. In some cases, the investment is never actually made and false certificates are issued for the invested funds. In Ponzi schemes, the offenders may use the investor's own money to demonstrate the profitability of the investment scheme. This often leads to further investment by the victim and by others he/she knows. At some point, the offender and/or the money disappears.
- Victims are persuaded to undertake unnecessary repairs on their homes or cars or the work that is done is sub-standard.
- Seniors are sold health remedies that are ineffective and that may delay more appropriate treatment.
- They may be sold insurance policies (life, health) for inflated prices or that duplicate coverage with policies they already have.
- Telemarketers use high pressure tactics over the phone to try to sell a variety of products.
- Fraud artists may commit distraction crimes in which they engage seniors about some issue in their homes, while an accomplice burglarizes the residence.
In many of the schemes, perpetrators gain the trust of the victim or use a company name similar to a well-established organization to gain the victim's confidence. They create the impression that the senior is one of a few chosen to be approached and encourage the victim to make an instantaneous decision in order to limit consultation with others.
5.1.2 Risk Factors
The stereotype of the elderly fraud victim is that of an individual who is isolated, frail, cognitively impaired, and too polite to challenge those victimizing them. In reality, victims are often affluent, well educated, and tend to have a network of relatives and friends (AARP, 1996). Rather than age per se, researchers have noted that the following factors may increase the vulnerability of an elderly person to fraud (Johnson, 2002:12):
- Home ownership;
- The tendency not to solicit advice before making a purchase;
- Financial risk-taking behaviour;
- Lack of knowledge of consumer rights;
- Lack of knowledge of fraudulent schemes;
- Openness to marketing appeals;
- Reluctance to hang up the phone on telemarketers.
The role of social isolation as a risk factor in fraud is unclear. While isolation may make it less likely that the senior will seek the advice of others and may predispose that person to stay on the phone due to unmet social needs, active seniors may be exposed to more situations in which fraud may occur due to their more extensive social networks (Lee and Geistfeld, 1999).
Much research remains to be done on risk factors in cases of financial exploitation. It is thought that the resources of many seniors, such as homeownership, savings, and pensions, make them vulnerable to fraud. The fact that they are more likely than other age groups to be home during the day may elevate their exposure to marketers. Many seniors also have anxieties about outliving their savings and requiring more health-related services, increasing their vulnerability to various forms of financial exploitation (Johnson, 2002). In general, certain personality traits are thought to make an individual more susceptible to fraud and to repeated victimization, including a trusting nature, compassion, carelessness, politeness, passivity, and susceptibility to flattery (Titus and Gover, 2001; Federal Bureau of Investigation, n.d.).
5.1.3 Perpetrator Characteristics
Perpetrators may use a variety of tactics to gain the compliance of the victim. They may try to isolate the victim, exert pressure to induce the victim to act quickly, use fear, and discourage them from seeking the counsel of others. Consumer fraud offenders are usually strangers. Perpetrators of fraud against the elderly tend to be male, although they vary in age, race, social status, and in education (Johnson, 2002). They are motivated both by profit and the sense of power achieved from defrauding a victim of means or one who is well-educated. They are not bound by conventional norms, often have some form of psychological dysfunction and are able to rationalize their behaviour (Blum, 1972).
Fraudulent telemarketers often operate from "boiler rooms", which are highly mobile operations that can be quickly abandoned and reassembled elsewhere. Telemarketers solicit customers randomly or through lists of people who have been victimized previously. Such lists may be sold to other telemarketers and therefore, victims may be repeatedly victimized (Los Angeles County DA's Office, 2009). They use a basic script and attempt to try to make the sale through a litany of false promises. They then try to secure payment quickly to avoid buyer's remorse. They generally ship some merchandise to avoid law enforcement action but the items shipped are usually a fraction of the value of what the customer has paid. When customers complain, they use a variety of delay tactics or intimidation to frustrate the customer or to get them to drop the case (Slotter, 1998).
5.1.4 Warning Signs of Consumer Fraud
The following may be warning signs of consumer fraud (Johnson, 2002):
- Large volumes of unsolicited mail in a senior's home congratulating the recipient for winning a prize or a large number of packages containing inexpensive items (e.g., costume jewellery);
- Numerous unsolicited phone calls offering prizes and investment opportunities;
- Financial difficulties experienced by the senior in covering basic expenses when the income ought to be sufficient;
- A stranger accompanying an elderly person to the bank and encouraging them to make a major withdrawal;
- Bank withdrawals the senior cannot explain.
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