Matthew Andres is a University of Illinois law professor and director of the Elder Financial Justice Clinic, which provides free legal representation to seniors who have been the victims of financial crimes. Andres spoke with News Bureau Business and Law Editor Phil Ciciora about the prevalence of elder financial exploitation in the U.S.
With the baby-boom generation retiring in droves, how common is elder financial exploitation? Is it likely to increase?
Financial exploitation is the most common form of elder abuse in the United States. It is estimated that older adults lose $2.9 billion of personal wealth each year to financial exploitation by unscrupulous businesses and individuals.
Incidents of financial exploitation are sure to increase, given U.S. census data and projections. In 2010, there were 40.2 million people age 65 and older. By 2030, it is projected that there will be 72 million people over 65, and by 2050 that number is expected to reach 88.5 million people. Baby boomers will be entering their golden years with nearly $30 trillion in investable assets, twice the number of investable assets held by the previous generation, making them highly desirable targets for all kinds of financial exploitation.
In Illinois, you helped to spearhead Public Act 99-0272, a law aimed at protecting Illinois seniors and the disabled from financial exploitation. Could you explain the law’s protections?
Public Act 99-0272 gives any victim of financial exploitation in Illinois a civil cause of action against their abuser if that abuser is a family member, caregiver or other person in a position of trust with the victim. That means the victim can sue their abuser for financial exploitation. Under the law, not only are victims who prevail in court entitled to recover the money taken from them, the court must also order the abuser to pay three times the amount stolen and the victim’s attorney’s fees.
Hopefully, this law will lead more victims to seek recovery of money fraudulently taken from them and encourage more attorneys to take on cases of financial exploitation.
Given how much money seniors lose every year to financial fraud, are there even more legislative reforms that could help prevent and remediate financial exploitation?
Despite being a huge problem, financial exploitation has gotten very little attention from legislators in Illinois and across the nation until recently. This fall, the Elder Financial Justice Clinic established a new initiative to propose and promote legislation at the state and national levels to address financial exploitation. Some of the measures we are researching include additional protections for people subject to guardianships, statutes that would make it more difficult for financial abusers to avoid paying judgments against them through bankruptcy, and changes to court rules that would make court cases less burdensome for elder abuse victims.
You are the director of the Elder Financial Justice Clinic at the College of Law. Can you explain what the clinic does?
The Elder Financial Justice Clinic is the first law school clinic in the country focused on combating elder financial exploitation. Second- and third-year law students under my supervision provide direct legal representation to people 60 and over and other vulnerable adults throughout Illinois who have been victims of any type of financial fraud or abuse. I started the clinic in 2013, and in our first two years of operation we have represented 34 clients living in 14 Illinois counties. To date, we have obtained $266,347 in restitution for our financially exploited clients.
What can adult children do to prevent their elderly parents or other vulnerable senior citizens from becoming a victim? Are there any warning signs people should look for?
Unfortunately, too many seniors find themselves alone and without adequate support systems. Not surprisingly, these are the seniors who are most vulnerable to financial abuse.
The most important thing adult children can do is to be involved in their parents’ lives. If concerned and conscientious children can monitor their parents’ finances, they can catch many of the warning signs of financial exploitation – sudden changes in spending habits, large unexplained withdrawals from accounts – before it is too late. And if parents know that their adult children are available to talk about financial issues, and the parents know to talk to their children when someone calls or rings the doorbell and asks for money, adult children can catch a great deal of potential fraud.
In the Elder Financial Justice Clinic, we also give our clients the following advice to help them avoid being victims of financial fraud:
- Do not wire money or purchase a prepaid card for purposes of transferring money. Con artists, often pretending to be a friend or family member, request that money be sent to them via wire transfer or prepaid cards, and once money is sent through these means it cannot be recovered.
- Do not give money to or contract with anyone who has called you unsolicited or has shown up at your house without an appointment.
- Do not pay upfront for home repair services. Reputable contractors do not expect to be paid in full until the work is completed to the customer’s satisfaction.
- Before signing a contract for services, check out potential contractors and service providers on online review services, through consumer advocacy services like the Better Business Bureau, and through government agencies like the Illinois Attorney General’s Office and the Consumer Financial Protection Bureau to make sure they are reputable.
- Find out whether contractors and service providers are properly licensed before hiring them. For example, anyone doing roofing work in Illinois is required by law to have an Illinois roofing license.
- Research thoroughly whether a reverse mortgage or an annuity is right for you before purchasing one.
- Do not sign any ownership interest in your house over to anyone, even a family member, with an expectation that you can continue to live there. There are better ways to transfer property at death, including transfer on death deeds, and once someone else holds title to your house it is much easier for them to evict you and much more difficult for you to evict them.
- Do not sign anything that someone is pressuring you to sign.