Elder financial exploitation resulting from age-related cognitive decline pose major economic threats

Protecting the wealth of older adults should be a high priority for banks, insurance companies, and others, according to the latest edition of Public Policy & Aging Report (PP&AR). Elder financial exploitation and diminished financial capacity resulting from age-related cognitive impairments both pose major economic threats, the issue finds. The authors, representing the top experts on these topics from the U.S. and the U.K., examine recent efforts to detect, prevent, and intervene in these cases.

Support for this PP&AR was provided by Age UK. It is being released in conjunction with the World Economic Forum's symposium on Ageing, Cognitive Decline and Impact on Banking and Insurance, also being hosted by Age UK in London on February 3 and 4.

"The problem is complex, but it is also a problem that unquestionably exists and is assuming remarkably large personal, monetary, and social dimensions," state PP&AR Editor-in-Chief Robert B Hudson, PhD, and Age UK Head of Research James Goodwin, PhD, in the issue's opening editorial. "Elder financial abuse involves millions of individuals and billions of dollars. It damages health, harms wellbeing, and arguably costs lives."

As cited in the PP&AR, overall household wealth in the U.S. in 2009 was estimated at $53.1 trillion, and the amount of wealth currently held in older adult households amounts to $18.1 trillion. Elder financial exploitation, called "the crime of the 21st century" by the MetLife Study of Elder Financial Abuse, cost older Americans at least $2.9 billion in 2010.

"In a very real sense, a huge portion of U.S. wealth is at risk due to the progressive decline of financial skills of the older adult age group," writes Daniel Marson, PhD, JD, in one of the PP&AR's articles. "Thus ironically, the age group that has amassed the most wealth over the longest period of accumulation is simultaneously at the greatest risk of financial self-impoverishment and exploitation by others."

Marson, who will deliver a keynote address at the London symposium, looked at elder financial abuse prevention through the lens of neuroscience. He concluded that, with continuing research, scientists will be able to determine how aging impacts decision making within the brain.

"This knowledge will help scientists to develop predictive models and algorithms for the detection of diminished financial capacity in older adults, which in turn can initiate timely interventions to protect vulnerable elders from such abuse well before it occurs," Marson writes.

Similarly, an article from Peter Lichtenberg, PhD, ABPP, reports on a new financial decision-making screening scale that he and his colleagues have developed that can be administered by any professional working with older adults. Initial tests found that the scale differentiated those with capacity (as judged by frontline professionals) from those without capacity, and differentiated those with substantiated financial exploitation from those with unsubstantiated claims.

"The banking industry can improve its interactions with older adults by creating proactive planning programs, recognizing signs of cognitive impairment, dementia, and financial exploitation and by learning new methods of assessing financial decision-making abilities," Lichtenberg states. "There is a need for real-time assessments and interventions if financial exploitation and decisions made by older incapacitated persons are to be curbed."