PROTECTING SENIORS FROM FINANCIAL WORRY
6 WAYS OLDER CONSUMERS CAN REDUCE THEIR RISK OF TROUBLE
Older consumers might think no one’s willing to listen to their complaints.
But that’s not necessarily the case. The Consumer Financial Protection Bureau has been accepting complaints since 2012 on many consumer financial products, including credit cards, mortgages, bank accounts and services, student loans, vehicle and other consumer loans, credit reporting, money transfers, debt collection and payday loans.
And in May, the bureau released a report highlighting complaints about financial products from consumers ages 62 and older. Among other things, the bureau snapshot shows that older consumers frequently report servicing problems with reverse mortgages, difficulties recovering money after financial scams, confusion around deferred-interest credit cards, and charges for unauthorized add-on products.
“There are a lot of people in the financial world out there to make a buck by taking advantage of whoever they can take advantage of,” said Harry Margolis, president of ElderLawAnswers. “Seniors are easy targets because they have savings and are often isolated and may begin losing some of their powers of reasoning and skepticism.”
Given the sorts of complaints received by the bureau, what can older consumers do to reduce the risk of financial trouble if they encounter problems with financial products or services?
Put systems in place. Margoli says you can best protect yourself by putting in place systems and supports to avoid isolation, whether that’s creating trusts with co-trustees, getting help paying bills, giving children online access to monitor accounts, or naming agents on durable powers of attorney.
Read the fine print. If you’re buying a financial product, make sure you understand the terms of financial agreements before you sign on the dotted line, said Susan Grant, director of con- sumer protection and privacy at the Consumer Federation of America.
Avoid pressure. “Don’t allow yourself to be pressured into anything,” Grant said. “If it’s a legitimate deal, it can wait until you have had an opportunity to check it out.”
Get help. It’s probably a good idea to get advice from a trusted source such as your attorney or accountant, Grant said. Local councils on aging or area agencies on aging might have counselors who can help older people review contracts as well, she said. Also, check with your state or local consumer protection agency and the Better Business Bureau for advice before investing money or buying financial products. Others share this opinion. According to the Allianz Life Safeguarding Our Seniors study about elder financial abuse, more than onethird of elders have experienced financial abuse or exploitation, with an average loss of $36,000 per incident.
“Clearly, this amount of loss can have a significant financial impact on the elderly, and efforts to recuperate those loses can be frustrating and sometimes futile,” said Deb Repya, vice president of consumer insights for Allianz Life. “Prevention is more likely if elders are having regular conversations with trusted family, friends or even an experienced financial professional who can help them evaluate and determine the best response to any correspondence from unexpected sources.”
Misled or mistreated? If you believe you have been taken advantage of, Grant recommends you contact your state or local consumer protection agency for advice. “Making complaints to the CFPB, if it’s a matter that it handles, can not only help to resolve your individual complaint but help others avoid the same problem,” she said.
If you do fall victim to a scam, Repya also recommends you do not try to manage the aftermath on your own.
“When it comes to addressing elder financial abuse, there truly is strength in numbers,” she said.
It’s hard to get your money back. “This is especially true for situations involving telephone or Internet scams,” Grant said. “They can ill-afford to lose their money, and, if they are no longer working, they can’t earn it back.”