The Consumer Financial Protection Bureau (CFPB) and Federal Deposit Insurance Corporation (FDIC) are launching a campaign against elder financial fraud, the agencies announced this week. Among their targets: reverse mortgage proceeds fraud.
Money Smart for Older Adults is a financial resource tool that aims to raise awareness among seniors (age 62 and over) and their caregivers on how to prevent, identify and respond to elder financial exploitation.
The tool’s training module consists of a scripted instructor guide, participant resource guide and PowerPoint slides that are available in a downloadable format free of charge on the FDIC website, whereas hard copies of the program can be found by visiting the CFPB website.
Meant to foster informed financial decision among older Americans, Money Smart for Older Adults devotes a section of its training guide to scams that target older homeowners, including information on reverse mortgage proceeds fraud.
An instance of this, according to the page 33 of the tool guide, could be when a handyman convinces an older woman to appoint him as her Power of Attorney so he can help her get a reverse mortgage on her home. In this scenario, the reverse mortgage borrower never sees any of the money from the loan proceeds, as the handyman has then used it for other purposes.
This section of the guide also includes a segment on how borrowers get scammed, including several different reverse mortgage-based schemes such as contractor fraud and home improvement scams.
The tool is an extension of FDIC’s Money Smart curriculum designed to help low- and moderate-income individuals enhance their financial skills and create positive banking relationships. Since its launch in 2001, Money Smart has reached over 3 million consumers and has now extended its scope to include a new population of seniors.
“Each year millions of senior citizens are targeted for financial exploitation,” said FDIC Chairman Martin J. Gruenberg. “Building on the success of the FDIC’s Money Smart curriculum, this program will provide a new resource to help older adults avoid being victims of this type of elder abuse.”
Money Smart for Older Adults covers various segments of financial fraud exploitation, including identity theft, scams targeting homeowners and veterans, as well as topics to help seniors plan financially for unexpected life events.
A program that educates seniors on how to identify instances of fraud is crucial, as one study pointed out Americans lost $2.9 billion to financial exploitation in 2010, according to CFPB Director Richard Cordray during a press call Wednesday.
“With 50 million older people in this country, and 10,000 more reaching retirement age every day, we cannot afford to tolerate financial predators or practices that victimize our elder citizens,” Cordray said. “It is essential that we come together as a nation to protect our seniors and the money they have scraped together over a lifetime of hard work.”
“Today’s launch will help dispel confusion about a variety of financial matters and will help protect seniors against scams, frauds, and other abuses,” Cordray added.
Written by Jason Oliva