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Virginia Seniors May Be Losing Over $3 Billion A Year to Elder Fraud

Author:

Stuart
|

Date:

August 26, 2020

Last year, the Comparitech Research Group set out to uncover the true cost of elder fraud in the US by analyzing and extrapolating data from government reports and registries. With the vast majority of elder fraud cases in the US going unreported, the group estimated that around 5 million seniors in the US were subject to elder fraud each year. This resulted in potential losses of over $27 billion.

This year, with new figures, findings indicate that elder financial abuse in the US could be even more prevalent and costly than first thought. Comparitech now estimates that 7.86 million cases of elder fraud occur in the US annually resulting in $148 billion in losses.

Elder fraud, also called elder financial abuse or elder financial exploitation, is defined as the misappropriation or abuse of financial control in a relationship where there is an expectation of trust, resulting in harm to the elderly victim.

More than 334,000 scams and financial abuse cases targeting the elderly are reported to authorities every year, and most experts agree that’s just the tip of the iceberg. Our estimates show $6.3 billion in damages are reported to authorities, but the real figure likely dwarfs that amount when factoring in unreported elder fraud.

To calculate the full scope of the problem, Comparitech aggregated data from multiple studies on elder fraud in every US state, including the number of reports to authorities and average loss per case. We then used those numbers to estimate the total number of cases and total damages in each state, adjusted for the proportion of unreported cases.

Due to a lack of accurate reporting in every state from Adult Protective Services, the group has used averages from other states to fill in the gaps for the number of cases reported and the dollar amounts lost. You can find more about how the research was conducted in the methodology section. Although not definitive, this exploratory study examines the potential cost and prevalence of elder abuse based on estimations, statistics, and hypotheses. It is an exploratory study to highlight the need for further research in this area.

Key findings

Only 1 in 23.5 incidents of elder fraud are reported to authorities, according to a 2011 report from the New York City Department for the Aging and Cornell University. Here are some of the key findings at a national level, based on that figure:

  • More than 1 in 10 elderly people in the US fell victim to elder fraud in the last year
  • Nearly 8 million incidents of elder fraud occur every year in total
  • Average loss per case is $17,869, calculated by averaging the mean reported loss from these organizations:
    • $34,200 – Financial Crimes Enforcement Network
    • $12,833 – Federal Bureau of Investigation, Internet Crime Complaint Center (IC3)
    • $6,575 – State Adult Protective Services or Law Enforcement
  • In all 50 states, losses due to elder fraud total $148.6 billion each year
  • Deposit accounts were the most common product involved with elder fraud cases (57.9%), followed by debit cards (26.2%) and credit cards (6.9%)
  • The IC3 report shows an average of 25.3% of internet crimes relate to those over 60 but the same age group accounts for almost 35% of the $ amount lost

Given the exponential rise of phone scams over the past few years, we surmise that the ratio of unreported to reported cases could well be much higher. Phone scams often target the elderly.

Top 5 US states for elder fraud in total losses

1. California

The most populous state in the nation loses the most money to elder fraud, according to our estimates. California lost nearly $15.9 billion to elder financial exploitation, impacting almost 8 percent of the elderly population. That’s about 685,000 cases in total.

California is home to 7.96 million over 60s.

2. Florida

As expected in the state with the highest percentage of senior citizens, Florida has one of the highest estimated number of elder fraud reports, almost 650 million in total. That’s 11.2 percent of elderly people. Losses amount to $13.7 billion in a year.

Florida is home to 5.77 million over 60s.

3. Texas

Another big state, Texas lost almost $11.6 billion to elder fraud in the last year. 12 percent of elderly people in the state fell victim, for an estimated 616,583 incidents in all.

Texas is home to 5.14 million over 60s.

4. New York

Of the 4.48 million over 60s in the Empire State, we estimated that almost 10 percent are affected by financial exploitation each year. The cost of these cases is over $7.8 billion.

5. Pennsylvania

Just over 11 percent of over 60s in Pennsylvania are estimated to have been victims of elder fraud, which amounts to more than 360,000 cases and losses of $6.8 billion.

According to the state’s APS report, 16.7% of perpetrators for all cases of abuse and exploitation were family members.

Pennsylvania is home to 3.23 million over 60s.

Elder fraud report figures, amounts lost and estimates by state

State Total Cases in One Year (Actual) Total $ Amount Lost in One Year (Actual) Estimated Cases (1 in 23.5) Estimated $ Amount Lost (1 in 23.5) Number of Seniors (60+) Estimated Elder Fraud Rate
Alabama 4,682* 87,769,068* 110,021 2,062,573,097 1,149,135 0.096
Alaska 907* 17,654,276* 21,304 414,875,484 134,012 0.159
Arizona 8,688 137,245,397 204,173 3,225,266,830 1,695,429 0.120
Arkansas 1,947 41,004,933* 45,762 963,615,916 695,572 0.066
California 29,155 676,590,269* 685,135 15,899,871,329 7,963,713 0.086
Colorado 11,616 117,049,148 272,987 2,750,654,975 1,156,858 0.236
Connecticut 2,784 49,161,266* 65,426 1,155,289,763 865,770 0.076
Delaware 1,969* 49,033,406* 46,283 1,152,285,048 248,295 0.186
Florida 27,437* 584,101,993* 644,775 13,726,396,828 5,765,648 0.112
Georgia 13,058 273,918,410* 306,856 6,437,082,639 2,070,692 0.148
Hawaii 957 18,109,259* 22,496 425,567,576 355,338 0.063
Idaho 1,196 14,032,629 28,095 329,766,778 382,826 0.073
Illinois 13,088 245,162,744* 307,570 5,761,324,488 2,804,799 0.110
Indiana 4,364 81,230,389* 102,544 1,908,914,134 1,477,824 0.069
Iowa 2,105 46,267,781* 49,461 1,087,292,847 743,615 0.067
Kansas 3,431 62,562,822* 80,638 1,470,226,323 645,949 0.125
Kentucky 2,511 46,275,579* 59,014 1,087,476,114 1,026,703 0.057
Louisiana 2,435 43,627,604* 57,218 1,025,248,690 1,019,862 0.056
Maine 1,469* 24,668,889* 34,513 579,718,890 384,322 0.090
Maryland 8,187* 132,347,441* 192,398 3,110,164,865 1,324,920 0.145
Massachusetts 7,020* 123,203,046* 164,959 2,895,271,580 1,588,116 0.104
Michigan 9,678* 165,458,893* 227,439 3,888,283,991 2,421,416 0.094
Minnesota 8,701 161,051,410* 204,481 3,784,708,133 1,243,961 0.164
Mississippi 2,272* 40,613,851* 53,383 954,425,508 667,073 0.080
Missouri 10,531 187,658,115* 247,474 4,409,965,693 1,448,367 0.171
Montana 1,787 34,184,615* 42,000 803,338,447 279,971 0.150
Nebraska 1,899* 44,157,265* 44,634 1,037,695,738 423,109 0.105
Nevada 5,678 104,232,016* 133,442 2,449,452,378 661,507 0.202
New Hampshire 1,085 18,600,914* 25,499 437,121,485 346,662 0.074
New Jersey 8,643* 167,656,905* 203,103 3,939,937,262 2,022,272 0.100
New Mexico 2,614 53,676,194* 61,437 1,261,390,551 504,653 0.122
New York 18,299* 332,108,011* 430,028 7,804,538,250 4,480,458 0.096
North Carolina 9,404 212,617,148* 221,002 4,996,502,988 2,353,499 0.094
North Dakota 614* 11,470,520* 14,433 269,557,217 162,220 0.089
Ohio 11,232 258,917,822* 263,953 6,084,568,807 2,792,679 0.095
Oklahoma 3,856 63,157,802* 90,625 1,484,208,351 857,599 0.106
Oregon 6,091 58,050,758 143,130 1,364,192,810 1,016,180 0.141
Pennsylvania 15,409 290,989,262* 362,107 6,838,247,649 3,227,151 0.112
Rhode Island 1,284* 20,100,966 30,165 472,372,707 257,992 0.117
South Carolina 3,690 67,179,947* 86,719 1,578,728,744 1,228,275 0.071
South Dakota 797* 16,696,769* 18,721 392,374,081 205,307 0.091
Tennessee 6,307 116,874,468* 148,206 2,746,550,002 1,550,510 0.096
Texas 26,238 494,045,187* 616,583 11,610,061,904 5,139,025 0.120
Utah 3,447 92,861,263* 80,993 2,182,239,672 499,149 0.162
Vermont 650 10,632,650* 15,275 249,867,281 172,909 0.088
Virginia 9,262 137,820,090 217,650 3,238,772,125 1,847,250 0.118
Washington 9,375* 147,595,221* 220,323 3,468,487,682 1,636,420 0.135
West Virginia 1,806* 32,572,252* 42,451 765,447,923 492,418 0.086
Wisconsin 4,358 77,803,297* 102,410 1,828,377,486 1,391,738 0.074
Wyoming 615* 14,015,288* 14,460 329,359,278 137,988 0.105

*Due to lack of reports in some states, we’ve used averages for the number of cases reported and/or the dollar amounts lost. See the methodology section for more information.

VIRGINIA

  • APS Report – 31,436 reports received, 74% related to over 60s and 13% related to financial exploitation = 3,024.
  • Crime Statistics – 6,618 cases of financial crimes against the over 65s. The highest rates were for false pretenses (42.11%) and credit card/ATM fraud (19.28%). These figures aren’t included in our overall scores due to the potential overlap between FinCEN and IC3.
  • Cost of Crimes – Breakdown of cost of crimes so worked out the average cost per case to then gain an understanding of the amount lost to people over 65. Total loss of $36,734,482 (across the crimes covered – doesn’t include intimidation and counterfeiting). This means the average case lost $6,380.84 (5,757 crimes when excluding intimidation and counterfeiting). Figures used to determine average lost to APS and LTCO cases.

Other sources:

State age statistics: https://www.census.gov/acs/www/data/data-tables-and-tools/data-profiles/

FinCEN SAR statistics: https://www.fincen.gov/reports/sar-stats

IC3 statistics: https://ic3.gov

LTCO statistics: https://agid.acl.gov/CustomTables/NORS_Complaints/Results/Alternative.aspx

Tips for preventing elder fraud

Despite the worrying prevalence of elder financial exploitation, there are some simple steps seniors and their friends, caregivers, and relatives can take to prevent fraudulent activities. We’ve listed 10 of these below:

  • Plan ahead to ensure your assets are fully protected and your wishes will be followed. You might want to talk to a financial advisor or an attorney to find the best options for you.
  • Always shred bank statements and receipts as well as unused credit cards before you throw them away.
  • Never discuss your financial information with anyone you don’t know or trust. This includes giving someone your bank details, Social Security Number, and any other financial information over the phone.
  • Order a copy of your credit report every year to make sure it’s accurate and that there aren’t any accounts on there that you don’t recognize. You could also sign up for identity theft protection so professionals are constantly monitoring your accounts for suspicious activities.
  • Thoroughly check credentials and references before you hire anyone and don’t give workers access to your financial information. For example, you may want to lock up your account statements, checkbook, and other sensitive documents while others are in your home.
  • Look out for charity fraud hoaxes by doing thorough research into the charity, not responding to solicitations for donations, not sending any of your bank details or mailing cash, and discussing the charity with your friends and family first.
  • Never pay taxes or fees to collect lottery “winnings” or sweepstakes.
  • Pay for things using your debit or credit card so you have a paper trail of all the transactions you’ve made.
  • Trust your gut. If something doesn’t feel right – tell someone. And if you do feel threatened or intimidated (or you’re concerned for an elderly person you know), contact your local Adult Protective Service.
  • Finally, don’t be afraid to say “no.” This is your money and you’re entitled to say how you want to use it.

 

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