Scammers have only become more sophisticated over time, stealing tens of billions from Americans annually, with the emergence of artificial intelligence (AI) exacerbating the problem. But one type of fraud in particular—elder real estate fraud and financial exploitation—has flown mostly under the radar, rising in recent years as the average price of homes has increased.
It is time to reverse this trend. State and federal governments must work collaboratively with the private sector toward a solution before more older adults fall victim.
The Federal Bureau of Investigation’s (FBI) Internet Crime Complaint Center (IC3) found that nearly 1,500 Americans ages 60 and older reported losing a total of $65 million in real estate scams last year. Overall, there was a 14% increase in elderly victims filing complaints and the Federal Trade Commission (FTC) reported that adults over age 60 lost over $1.6 billion to all types of scams last year.
Attractive targets
The median age of Americans has increased over the last four decades and our population is older today than it has ever been. Older Americans are less likely to report suspected fraud and as a group, tend to be financially better off than other demographic groups. This makes them attractive targets, but it also means steps must be taken to prevent the damage from being done in the first place.
Elder real estate fraud and financial exploitation covers a broad range of actions, including forging a signature on legal or financial documents; coercing or unduly influencing the signing of a legal or financial document; and non-disclosure of critical information; and inappropriate utilization of authority under a Power of Attorney (POA), just to name a few. Often the perpetrator isn’t a stranger, but rather a close relative, trusted friend or advisor of the victim, which makes the scam even more egregious.
The consequences can be financially devastating as FBI Public Affairs Officer Christina Garza noted in the wake of the IC3 report release: “We’re seeing people lose their entire life savings and their retirement funds on top of that. They’re losing their homes because they’re having to remortgage their houses to be able to keep up with the scams and the extortion if you will and manipulation that comes along with all of that.”
What government can do
The stark increase in scams targeting older adults is deeply concerning, which is why the American Land Title Association (ALTA) has joined together with the National Consumer Law Center (NCLC), National Association of Realtors (NAR) and AARP to share legislative, educational, and enforcement recommendations states and the federal government can implement to help combat the rise in elder real estate fraud and financial exploitation.
Legislatively, states could ban unfair and deceptive long-term real estate agreements that purport to create liens and result in financial loss. In addition, the Uniform Law Commission’s (ULC) Uniform Power of Attorney Act provides protection to guard against financial exploitation by those individuals acting in an official representative capacity. By enacting and enforcing the Act, states could shield older adults against bad actors looking to take advantage of them.
States could also educate consumers and practitioners on deed theft. Deed theft or fraud is a scheme that involves forging and recording a phony transfer of property ownership, allowing criminals to then sell the home or take out a mortgage on it.
Expanded enforcement could also help stem the rising number of older adults who fall prey to scams. States and the federal government could support data gathering and enforcement of protection laws by allocating the necessary resources and promoting initiatives through local Adult Protective Services (APS) and the Consumer Financial Protection Bureau (CFPB), among others.
Finally, the real estate industry must continue to share resources that consumers, practitioners, advocates, law enforcement, and other interested stakeholders can access to stay informed on rising threats targeting older adults.
Together, these collective efforts can help prevent future fraud and exploitation, safeguard the financial security of older Americans, and send a message that these abusive practices must end.
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