10th Annual Home for the Holidays Campaign Encourages Families to Spend Time Discussing Strategies to Address Financial Exploitation With Older Family Members

As financial exploitation targeting older adults continues to become more prevalent in the United States, the national Eldercare Locator announced today that it has launched a campaign to encourage older adults and their families to address this critical issue and to get informed about the warning signs and resources available to help prevent exploitation.  Research shows that as many as 5 million older adults are victims of elder abuse each year and financial exploitation costs seniors an estimated $3 billion annually.

As part of its 10th Annual Home for the Holidays campaign, the Eldercare Locator, a public service of the U.S. Administration on Aging that is administered by the National Association of Area Agencies on Aging (n4a), is encouraging older adults, caregivers and their families to use their time together this holiday season to discuss and get informed about strategies to prevent financial exploitation.  

The National Center on Elder Abuse has partnered with the Eldercare Locator to produce a consumer guide that is now available to help inform this discussion.  The guide is available at www.n4a.org.

"Financial exploitation is a threat to the health, safety, dignity and independence of vulnerable older adults," said Kathy Greenlee, Assistant Secretary for Aging, U.S. Department of Health and Human Services "This holiday season, we encourage families to spend some time asking older family members some basic questions to ensure that their finances are in good hands and that if there are signs of abuse, that the right steps are taken to stop it."

"Financial exploitation of older adults can take many forms and can come in many guises including telemarketing scams, identity theft, fake check scams, home repair fraud, and even "sweetheart scams" whereby a con artist befriends or romances an isolated lonely older adult to gain control over their finances.  Unfortunately, financial exploitation can often be committed by a person you know and trust; a friend, caregiver or even a family member, which makes it even more difficult," said Sandy Markwood, CEO, n4a.  "There are steps older adults and their families can take and resources available to help identify and remedy this serious problem.  To ensure your safety and the safety and security of your finances, it is critical for you to assess your financial situation on a regular basis.  We are seeing more and more financial abuse across the country which is why this holiday season, we hope families will check in with their older relatives to be sure that their finances are in good order and in good hands."

There are several signs of financial exploitation for families to look out for, including financial activity that is inconsistent with an older adults past financial history; multiple withdrawals within a short time period; inconsistent signatures on documents; confusion about recent financial arrangements; new names added to accounts or other changes to key documents that have not been authorized; a caregiver or beneficiary who refuses to use designated funds for necessary care and treatment of an older adult and an older adult who feels uncomfortable or even threatened by a caregiver or another individual who is seeking to control their finances.

Families that are concerned about financial exploitation should report the issue to state agencies that deal with protecting the safety and well-being of older adults.  The campaign, which encourages older adults and their families to plan and be cautious, released tips to help prevent financial exploitation, some of which include:

--Learn how to avoid fraud and scams at:

http://www.stopfraud.gov/protect.html

--Consult with a trusted person before making any large purchases or investments.

--Do not provide personal information (i.e. Social Security number, credit card, ATM PIN number) over the phone unless you placed the call and know with whom you are speaking.

--If you hire someone to help you in your home, ensure that they have been properly screened with criminal background checks completed.  Ask for certifications when appropriate.

--Talk with an attorney about creating a durable power of attorney for asset management; a living will; a revocable, or living, trust; and health care advance directives.

"Financial Exploitation can be prevented if people know the right questions to ask and where to turn for help, said Mary Twomey, Director, National Center on Elder Abuse.  "Although it is a sensitive issue and one that can be difficult to broach, it is critical for families to address it, and there are many useful resources available to guide them through the process."

The Eldercare Locator is the first step to finding resources for older adults in any U.S. community and a free national service of the U.S. Administration on Aging (AoA) that is administered by the National Association of Area Agencies on Aging (n4a). Contact the Eldercare Locator at 800.677.1116 or www.eldercare.gov.    

This is the time of year when Credit offers are pushed at every cash register at every retailer. Offers of saving 10% on today's purchase may seem very tempting but could bring your credit score down quickly and leave you with a handful of high interest retail credit cards that may include high annual fees.

We want to remind you that even though the offers of easy credit may sound great, and saving money on each purchase is certainly a worthy cause, the effect on your overall credit should be your main concern when considering a credit application at the checkout line. New credit will reduce your credit score and it will take time to recover.

Here's a breakdown of the five elements of the FICO score:

1. Payment history: 35 percent of the total credit score is based on a borrower's payment history, making the repayment of past debt the most important factor in calculating credit scores. According to FICO, past long-term behavior is used to forecast future long-term behavior.

FICO keeps an eye on both revolving loans -- such as credit cards -- and installment loans, such as mortgages or student loans. Although the weight of each loan varies between individuals, FICO indicates that defaulting on a larger installment loan like a mortgage will damage a credit score more severely than defaulting on a smaller revolving loan. One of the best ways for borrowers to improve their credit score as a whole is by making consistent, timely payments.

2. Debt amounts: 30 percent of the total credit score is based on a borrower's total outstanding debt. Revolving lines of credit, which allow a consumer to borrow as much or as little as desired up to a limit (versus installment loans where a set amount -- say, $20,000 plus interest for a car -- is determined at the outset), are more heavily weighted. Credit cards are a type of revolving account.

Since FICO views borrowers who habitually max out credit cards -- or who get very close to their credit limits -- as people who cannot handle debt responsibly, a borrower should maintain low credit card balances. Experts recommend that the amount owed should not exceed 30 percent of the individual's credit limits. That 30 percent rule of thumb applies to each individual credit card as well as the overall level of debt.

The final components of a FICO credit score get less weight in the score's calculation. "The remaining one-third of your score is determined by how long you have managed credit, to what degree you have pursued new credit recently and the variety of credit types you have successfully handled," Watts says.    

3. Length of credit history: 15 percent of the total credit score is based on the length of time each account has been open and the length of time since the account's most recent action.

As a result, it is impossible for a person who is new to credit to have a perfect credit score. A longer credit history provides more information and offers a better picture of long-term financial behavior. Therefore, to improve their credit scores, individuals without a history should begin using credit, and those with credit should maintain longstanding accounts.

4 and 5. New credit and credit mix: Each comprise 10 percent of the total credit score.

Borrowers, even those new to credit, should avoid opening too many credit lines at the same time, since such behavior could suggest they are in financial trouble and need significant access to lots of credit. FICO suggests that borrowers only take on additional credit when they must have it or when it makes sense financially.

Credit mix, meanwhile, is somewhat of a vague category, but experts say that repaying a variety of debt indicates the borrower can handle all sorts of credit. According to FICO, historical data indicates that borrowers with a good mix of revolving credit and installment loans generally represent less risk for lenders.  

Knowing the various weights given to components of a FICO credit score give borrowers a better idea where to focus their attention. "So to get a good score you mostly need a credit history with no reported late payments, as well as low reported balances currently on any credit cards," Watts says.

Internal Revenue Service

www.irs.gov