Scammers take aim at aging population
by Kay Lazar / Boston Globe (US)
Roughly 21,000 times last year, physicians, social workers, family members, and other concerned residents contacted Massachusetts Protective Services authorities to report suspicions that an elderly person was being abused.
In about one third of those cases, the concern involved financial exploitation, according to state officials, a problem that is expected to grow significantly as the population ages and the number of older adults left vulnerable by Alzheimer’s disease nationwide is projected to double, and perhaps triple, by 2050.
With a potential tsunami of elder financial abuse on the horizon, researchers, health care leaders, lawyers, and lawmakers have launched a number of initiatives to better understand the size and scope of the issue and craft strategies to minimize harm.
“My expectation is that exploitation will be a growth industry,” said State Representative Paul Brodeur, a Melrose Democrat and former general counsel to the Massachusetts Executive Office of Elder Affairs. Brodeur successfully lobbied for the creation of a special state commission to investigate and make recommendations to Governor Deval Patrick’s administration for beefing up elder protective services.
Brodeur said the panel’s report, expected in January, will likely include a proposal to establish volunteer teams of financial experts, such as financial planners and bankers, who can be tapped to help overwhelmed protective services staffers untangle financial scams against the elderly.
Brodeur, who also spent eight years investigating securities fraud in the Secretary of State’s office, said those who prey on elders are increasingly using sophisticated financial scams that protective services staffers, who have social services backgrounds, do not have the expertise to fathom.
“What they are not good at is cases when someone shows up and finds out that mom or grandma is living with her drug-addicted nephew, and all of a sudden, she doesn’t own the house anymore and she thought she did,” Brodeur said.
The annual financial losses by victims of elder financial abuse nationwide is estimated to be at least $2.9 billion, according to a 2011 study by the National Committee for the Prevention of Elder Abuse, and the MetLife Mature Market Institute.
The study found that older women were nearly twice as likely to be victims of financial exploitation as men, and that roughly one-third of the reports of elder financial abuse analyzed by researchers were perpetrated by family, friends, and neighbors of the victim.
It also noted that financial abuse by family, friends, and neighbors was likely to be under-reported because of shame and fear of retaliation or further harm.
The researchers estimated that the annual financial losses by these victims had grown by 12 percent since the last time they analyzed cases in 2008.
Amid this rising tide, a group of brain specialists and legal experts have collaborated at Massachusetts General Hospital to form the Center for Law, Brain, and Behavior. Among the goals of collaborators is to research and better understand the changes that are believed to occur in the brains of those with early, often subtle signs of dementia, which can expose elders to undue influence in financial decision making. For instance, patients in the early stages of Alzheimer’s disease often are depressed, apathetic, and anxious, symptoms that could make them vulnerable to exploitation.
The center’s team also aims to devise standardized methods to help lawyers and judges assess the capacity of impaired elders to make financial decisions, such as in executing wills and signing over the deed to a home.
While there have been many advances in brain science in recent years, including high-tech brain scans, and a number of verbal and written tests designed to assess competence, there has been little consensus between researchers and legal experts about how these tools should be reliably used in courtrooms to measure an elder’s ability to understand complex legal matters.
Dr. Rebecca Brendel, an assistant psychiatry professor at Harvard Medical School who directs law and ethics at the MGH center, said the most commonly used test by physicians to do a quick assessment of cognitive ability, such as memory and perception, was not designed to measure a patient’s ability to make financial decisions, yet it is often used in legal cases.
Known as the Mini-mental state exam, the test requires patients to perform a number of tasks, such as repeating certain words that were just recited to them, and to count backward by units of 7, starting at the number 100.
Brendel said a patient might score in the range considered normal but still have significant cognitive problems.
“Many people with intelligence and social skills seem fine, but when you ask them to write a check, they can’t do it,” she said.
Brendel often uses what she calls the “blank check test,” asking a patient to write out a dummy check to pay a bill, drilling down beyond the test results to help determine whether a patient truly understands the consequences of his actions.
Even more challenging, Brendel said, is playing detective after the fact. She has been called in to many cases, such as family disputes over a will, and asked to determine whether a deceased person understood what he or she was doing years earlier when the will was written. Brendel then has to pore through thousands of pages of medical records to try and answer that complex question.
Essentially Brendel is asked whether the person had a so-called lucid interval. The concept is a more than century-old legal rule that needs to be updated, experts say, because more recent science has raised questions about whether lucid intervals are, in fact, possible in certain health conditions, said Susan Stenger, a partner at Burns & Levinson who specializes in probate and trust litigation.
The rule says that a person with dementia, head injury, or other cognitive problem may have had a temporary period of rational thought when executing a will or other financial matter, suggesting that the person understood what he or she was doing.
“Are there health conditions where you would never have lucid moments, such as full-blown dementia?” Stenger said. “Making these standards clearer would help.”
Stenger and others say that families can better avoid these thorny questions by completing estate planning before questions arise about mental capacity, and then documenting that the person understood his or her actions.
“The challenge is to come up with an accepted way to make these evaluations at the time of the will, so we don’t have to go back like this,” Brendel said. “But you don’t want to make it too cumbersome for a person to do a will.”
Even when there isn’t a question of dementia, a growing body of research suggests that older adults may not make the best financial choices when pressed to make decisions in an unfamiliar setting.
In a study of adults ages 19 to 85, Gregory Samanez-Larkin, a Yale University assistant psychology professor, found that older adults are more likely than their younger counterparts to make mistakes when forced to choose investments during a simulated lab trial. But the researchers also found that older adults generally do better when not pressed and they can take advantage of years of experience.
“The decisions that seem to be worst require rapid learning in a new environment,” he said. “That’s where the young people do a decent job because they can learn really fast.”
Samanez-Larkin is still analyzing data from another study he recently concluded, comparing adults, age 40 and over, who had been the victims of financial fraud with those who had not been exploited. Using brain scans and simulated investment games, the researchers are trying to determine whether they can pinpoint certain markers in people’s brains that may make them more vulnerable to scams as they age.
One of Samanez-Larkin’s goals is to develop a test that consumers might be able use to evaluate their own, or a family member’s, abilities to make financial decisions.
“There needs to be a lot more development on this,” he said. “It’s not an easy task.”
Kay Lazar can be reached at Kay.Lazar@globe.com Follow her on Twitter @GlobeKayLazar.