Older Americans lose as much as $37 billion each year to financial fraud, but new legislation in the congressional pipeline would impose tougher penalties for these crimes in an effort to combat the rising rate of exploitation.
Senators Chuck Grassley (R-Iowa) and Richard Blumenthal (D-Conn.) announced in a hearing Wednesday that they are developing federal legislation that will introduce tougher penalties for scammers who target older consumers. The bill will also promote interagency coordination around elder abuse cases—including the improvement of investigation and prosecution—and enhancement of survivor assistance and data collection.
“We need to make sure that government at all levels is working to spread the word on financial exploitation, that individuals on the front lines receive proper training, and that those in the position to combat these crimes have the necessary tools and authority to do so,” Grassley said Wednesday. He added that he hopes to unveil the bill “soon.”
Fraud schemes targeting older Americans are estimated to rise, especially because the number of people over 65 is expected to more than double from 46 million now to 98 million by 2060, according to the 2016 Population Reference Bureau report. And while the total damage incurred through these schemes is in dispute, the emotional and financial turmoil of victims is very real. A 2015 report from True Link estimated seniors lose $36.5 billion each year to fraud and financial abuse. A similar 2015 report by the AARP found financial exploitation robs older Americans of $3 billion annually.
Older Americans may not be defrauded at higher rates than younger consumers, but certain types of scams are more likely to impact them, says Lois Greisman, who heads the Division of Marketing Practices for the Federal Trade Commission's Bureau of Consumer Protection. The most common of these scams are around lotteries and prize promotions, as well as fraudsters posing as technical support to “fix” non-existent computer problems.
Early detection is the key to combat these schemes, Connecticut State Ombudsman Nancy Shaffer said in Wednesday's hearing. “Giving law enforcement more tools, more preliminary kinds of assistance in how to identify it as it’s happening, is an important piece,” Shaffer said.
This is not the first time lawmakers have attempted to pass legislation that would address elder fraud. Senator Amy Klobuchar (D-Minn.) introduced the Seniors Fraud Prevention Act last June. It aims to set up an advisory office within the Bureau of Consumer Protection of the Federal Trade Commission specifically to combat elder fraud. Another measure, the Senior$afe Act of 2015 introduced by Sen. Susan Collins (R-Maine) last October, would help financial professionals, including financial advisers, report elder financial fraud. But legislation tracking site Govtrack.com estimates Klobuchar’s bill has a 44% chance of being enacted, while Collins’ bill rated only a 7% chance.
“All too often the quiet, invisible, heartbreak of financial elder abuse fails to make the headlines, but it happens every day and it’s a scourge that needs to fought and conquered,” Blumenthal said Wednesday.