Podcast

Plan For 100℠ Podcast logo image

With Michele Kryger

00:00 -00:00

Elder financial abuse is a growing problem that many Americans fear could negatively impact their ability to live long, financially secure lives. Michele Kryger, Elder and Vulnerable Client Care Officer for AIG, discusses the common scams targeting seniors, potential warning signs of financial exploitation, and how family members and financial professionals can help prevent elder financial abuse.

Transcript

Steve Lubetkin: [00:00:08] Thanks to medical advances and healthier choices, Americans are living longer, more active lives well into their 80s, 90s and beyond. Welcome to "Plan for 100," a new podcast from AIG. This podcast series is devoted to educating and empowering Americans to prepare for longer lives and retirements that could last four decades or more. Our podcast aims to help you "plan for 100," no matter what age you are today.

Jim Stueve: [00:00:38] Hello. I'm Jim Stueve, executive vice president of strategic accounts for AIG Financial Distributors. I'll be your host today for AIG's podcast, "Plan for 100." I'm excited to be joined today by Michele Kryger. Michele is a senior compliance and elder and vulnerable client care officer supporting the AIG Life and Retirement businesses. In 2016, she was instrumental in building out the elder and vulnerable client care unit and has led the team for the past several years. Michele has also been leading a project team to understand how the aging population is driving the need for more accessibility in various modes of communication with clients and the public. Michele welcome to plan for 100.

Michele Kryger: [00:01:21] Thank you. Jan it's great to be here and it's great to have the opportunity to discuss this very important topic.

Jim Stueve: [00:01:28] Yeah. I wanted to talk to you about the elder and vulnerable client care unit in a minute, because I know your team is doing great work there. But first, let's talk about one of the issues that American seniors are facing as they plan for 100. Elder financial abuse has become a pervasive and expensive problem. In fact financial exploitation is estimated to cost America's elderly as much as $37 billion a year. With 10,000 Americans turning 65 every day, there are an increasing number of people vulnerable to this manipulation and abuse. What are some of the common scams used to target the seniors of which they should be aware?

Michele Kryger: [00:02:05] Yeah, you're right, Jim. Sadly, we are seeing an increase in exploitation scams targeted to seniors. Some of the scams that are more prevalent in the matters that we've handled include lottery, Treasury, romance, technical assistance, and prepaid credit and debit card scams. And I'll just talk about them at a high level. The lottery and Treasury scams prey on a person's desire for a windfall that's too good to be true. Romance scams prey on individuals who are siloed and lonely and looking for companionship. And we've handled cases in which our clients are asked more than once to repay debts by use of prepaid credit cards. Typically these funds that are paid to the fraudster are untraceable. Fraudsters can be very compelling. Therefore we feel it is important to raise awareness about these scams so seniors can put appropriate protections in place.

Jim Stueve: [00:02:50] Yeah that is important. You know one thing I was surprised to learn recently was that the seniors are most at risk from the people they know. I mean 90 percent of the people taking financial advantage of the elderly are actually family members or other trusted individuals. I mean, it's just shocking. If you're trying to protect a loved one or if you're a financial adviser who has a senior for a client, what are some of the red flags to watch out for with their family members, friends or caregivers?

Michele Kryger: [00:03:16] Yeah it is shocking. We have seen the statistics as high as 90 percent. It's hard to think of a loved one or someone you trust taking advantage of you. And sadly many of the cases that we manage do involve allegations that a family member caretaker or someone known to our client is taking advantage of them financially. As you mentioned earlier the stakes are high. Oftentimes spouses and children feel entitled to the senior's assets and they attempt to obtain access to them during the senior's life. And this is done regardless of the negative effect that it has on the victim. There are ways to help loved ones prepare and prevent something like this from happening. And awareness is key. Some of the red flags to look for from family members is whether the senior is withdrawn from family members and friends. Is there overall depression detected? Are you seeing a change in appearance in the individual or is there a sudden inability of that individual to pay their monthly expenses? Do you see a change in spending patterns? One of the key red flags would be a growing alliance of this particular family member with another family member, caretaker, friend and that always reminds me of the story of Stan Lee. I don't know if you've heard, but Stan Lee was a co creator of Marvel comic characters such as Spider-Man. When he passed back in November of 2018, it was amid allegations of exploitation. As I understand the story, Stan Lee's business manager actually siloed Stan from his family and didn't allow his family to have contact with Stan Lee and Stan became very reliant on that business manager. As of May of 2019, that business manager now faces multiple charges of theft and elder abuse, and this just goes to show that no one is immune from these issues. Going back to the red flags that we see internally and what we train our financial advisers on, we look for abrupt changes to a client's account which would include changes in beneficiary designations or changes to an address, contact information or bank account information. A key red flag for us is an increase in certain transactions on an account after a power of attorney is designated. Oftentimes we'll have a power of attorney designated and then we have a large transaction, withdrawal, or even a surrender of the account. Not always do they turn out to be exploitation, but it's definitely something that we want to take a further look into. You know, we always say that it is important to designate a power of attorney and more important to have a network of checks and balances in place so you're not just relying on one form of protection. What we find is that designating the right type of power of attorney is very important along with having a trusted contact and really working with a financial advisor, a financial adviser who's someone not entitled to any of the senior's funds and who has an interest in this senior having a safe and secure retirement.

Jim Stueve: [00:06:07] Yeah that makes a lot of sense. I know that AIG recently conducted an elder financial abuse survey. So if you could, share some of the key findings that you saw in your eyes. Just how aware are seniors of these scams and how worried are they about them?

Michele Kryger: [00:06:22] Well, so, I will tell you. Some of the more interesting outcomes of this survey from my standpoint include the fact that 53 percent of Americans that responded, they do fear financial abuse could impact their ability to enjoy a long and financially secure life, but nearly half of the seniors that were surveyed they handle, they manage their finances and monetary decisions entirely alone. This is a concern when you consider as we age, there is a higher risk of cognitive decline, Alzheimer's, dementia, along with just a general natural decline in certain abilities such as managing our finances. Again, this is an important reason to have a network of protection in place. It does appear that generally Americans were aware of some of the scams targeted to seniors, but 57 percent of respondents were unaware of the romance or invoice scams, which I had just mentioned are common scams that we see come through our unit. I also thought it was interesting that 81 percent of the senior respondents didn't think that someone close to them would take advantage of them financially, and really most family members will be helpful and they won't harm the client, but we are seeing that increase in elder financial exploitation. So awareness and preparedness is key to prevention. One of the other areas I wanted to mention from this survey is that the survey indicated that working with a financial adviser does increase the chance that smart choices are made to prevent exploitation. From the survey, those that partnered with an adviser were more than two times as likely to have a durable power of attorney in place, 64% of the Americans that work with financial advisors had a trusted contact in place and 90 percent said that they do involve family members and spouses in conversations about their finances.

Jim Stueve: [00:08:02] So a financial adviser can help decrease the chances of financial abuse and exploitation. That's great news. So what are some of the ways advisors can help safeguard the life savings of the senior clients and how can the family members help?

Michele Kryger: [00:08:15] So financial advisors are in a unique position to recognize red flags that might otherwise go unreported. As we discussed, one of the findings of the survey was that nearly half of the seniors handle their financial transactions alone. This means that family members most likely would not see red flags of exploitation, whereas a financial adviser would be on the front lines, being able to look at the activity the account and see some of those red flags. At AIG Life and Retirement, we train all our employees including financial advisors how to recognize the red flags of exploitation, and we have found this to be very beneficial in saving clients from loss of assets. In addition, there has been a passage of recent laws and regulations, and these regulations have provided financial advisers with additional flexibility to put controls in place to help prevent exploitation from occurring. We do tell our financial advisers to talk to clients on how to protect themselves very early in the relationship, and they do talk to their clients about the benefits of a trusted contact and powers of attorney, and they do also explain the benefit of having a network of protection to better prevent financial exploitation from occurring.

Jim Stueve: [00:09:23] Yeah. So that's that's very important. Let's stay on the Senior Safe Act for a while so I know that the AIG elder and vulnerable client care unit was actually ahead of its time and in place well before that law was signed. So can you speak about what your unit does for clients and ultimately what people should do if they suspect elder financial abuse?

Michele Kryger: [00:09:44] Sure. So AIG Life and Retirement did launch their EVCC unit back in 2016, that's the elder and vulnerable client care unit. I mean this was prior to the passage of the senior Safe Act and the other senior investor protection law as I mentioned. At the time our executive team decided that it was in our client's best interest to report cases where we reasonably believed that financial exploitation is occurring. We also temporarily delay disbursements resulting from suspicious transaction requests. This buys us a little bit of time to conduct an internal review of the facts and circumstances of the matter to make sure that releasing the funds won't cause loss to our clients. We do work with the client, their power of attorney, their trusted contact, and of course, the financial advisor, to understand the situation and to assist however we can. Oftentimes we also educate clients about the specific type of scam that we believe they have fallen victim to. One of our other responsibilities is to provide guidance in matters in which the client appears to have suffered cognitive loss and has no power of attorney or trusted individual to help them. These are challenging matters and we work directly with a financial advisor in working through those. Our goal is to expeditiously detect and prevent, where possible, the financial loss to our client. If a person does suspect that a loved one or they themselves is victim of financial exploitation or a scam, they can seek help from multiple resources. The adult protective service agencies are like agencies in the states are particularly helpful if a loved one was preyed upon due to vulnerabilities particularly cognitive decline. Your local police authorities, district attorney offices and state security divisions can also be helpful. Other resources such as AARP, the Department of Justice, the Federal Trade Commission and National Center on Elder Abuse are agencies that can help find assistance for the victims.

Jim Stueve: [00:11:39] Yeah that's great. There's great resources. Michele. Thank you so much for being our recent guest on this plan for one hundred podcast. It's a very important topic that everyone should be aware of. We appreciate your time today and we hope you'll join us again.

Michele Kryger: [00:11:53] Totally agree. Important topic. Thank you for letting me be here today to talk about it.

Jim Stueve: [00:11:58] It was our pleasure.

Steve Lubetkin: [00:11:59] Thank you for joining us for AIG's "Plan for 100" podcast. For more information, please visit our Web site, planfor100.com.