Focus on protecting elderly from fraud and fleecing

It is not surprising when older people with dementia make poor financial decisions or are fleeced by con artists.

But even "normal" brain aging, which causes changes in cognitive and social abilities, can make people vulnerable later in life to financial disaster.

A conference at the University of Pennsylvania this week tackled how to figure out whether older people are capable of good decision-making, and what can be done to protect elders from fraud and abuse. Sponsored by Penn's Institute on Aging and Department of Medical Ethics and Health Policy, the event drew people from academia, law enforcement, and social services.

Jason Karlawish, a Penn dementia expert and ethicist who helped organize the conference, sees the financial problems of seniors as a public health issue as baby boomers age.

"They need that money to take care of themselves, and if they lose that money, they can't go back to work and earn it back," he said. Seniors who spend unwisely may then have to rely on family members or the government for help.

Poor financial decision-making can be an early sign of dementia. It also occurs in people who do not have the hallmark memory problems associated with Alzheimer's disease. One of Karlawish's more depressing slides was a chart showing what happens to various math and memory abilities related to speed, attention, and focus over a life span. They start dropping at age 30, and the decline picks up speed about 50. (Another slide showed that vocabulary, a measure of accumulated knowledge, stays steady throughout life.)

Nathan Spreng, director of the Laboratory of Brain and Cognition at Cornell University, said 5 percent of healthy older adults have been exploited financially. The percentage is higher among those with dementia.

His bleak slides about cognitive decline showed how normal brains shrink and change in other negative ways as we age.

He pointed out, though, that there was a "tremendous amount of variability." Some "super-agers" never seem to decline. That variability makes it particularly challenging to study the impact of aging on decision-making ability.

While some scientists are focusing on mathematical skills, Spreng thinks that looking "just at the ability to manage numbers will miss a tremendous number of people." He sees a social component to vulnerability to fraud. We may fear phishers and strangers who claim to be a grandson who needs money, but many senior citizens are victimized by their own family members or acquaintances.

Spreng hypothesizes that older people are vulnerable because they are not as good at reading others' intentions. Loneliness and depression also can cloud thinking. "I would argue," he said, "that this is the dominant feature we need to understand in our older adults."

Karlawish is among a group developing a new tool to help legal and social services workers assess whether older people are capable of making good decisions. It is being tested in New York City.

The tool is needed, Karlawish said, because "this I-know-it-when-I-see-it approach . . . just is no longer acceptable."

He said a new report on cognitive aging by the Institute of Medicine recommends that financial institutions teach employees about warning signs of fraud, such as unusual transfers or payments. It also recommends that banks be allowed to put holds on suspicious transactions.

As director of National Neighbors Silver for the National Community Reinvestment Coalition, Robert Zdenek is interested in "age-friendly banking.'' He said finding ways to protect elderly customers has been catching the attention of high-level bankers. While banks typically have erred on the side of protecting client privacy, he said, more are realizing that they may be the first to see problem behavior that could send customers to the poorhouse. One barrier for national banks, which must comply with myriad state laws, is figuring out how to make changes that will work across state lines.

Still, Zdenek said, institutions like Bank of the West have been training frontline workers to identify problems and intervene. He said older customers could also benefit from customized products that waive overdraft fees or allow other family members to monitor account activity without having access to the money.

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@StaceyABurling