ELDER ABUSE

FINANCIAL ELDER ABUSE

California's Elder Abuse and Dependent Adult Civil Protection Act states that financial abuse occurs when someone: “Takes, secretes, appropriates, or retains real or personal property of an elder or dependent adult to a wrongful use or with intent to defraud, or both” (Welfare & Institutions Code section 15600 et seq.).

Telemarketing fraud and predatory lending are two common forms of financial abuse. Although these types of fraud do not only affect elders, factors such as physical incapacity due to poor health, and dependence on a caretaker make elders particularly vulnerable to financial abuse.

Telemarketing

The National Consumers League’s 2005 Telemarketing Survey reported that the majority of complaints (22%) came from consumers 70 and older. The survey found that the top telemarketing scams among elders were scams in which:

• The caller tells the consumer they have won a prize and then requests that they pay a fee to claim it.

• The caller pretends to be a financial institution and tries to obtain confidential information from the consumer.

• The caller tries to sell the consumer a magazine subscription while falsely representing the terms of the sale.

Predatory Lending

Predatory lending targeted at elders can take a variety of forms. Predatory lenders often persuade elders to take out loans they cannot really afford by misrepresenting the terms of the loan. In some cases, lenders may encourage elders to take out a loan based on the equity of their home, rather than their income. In other cases, lenders may try to persuade elders to take out risky loans like “negative-amortization” loans, without fully disclosing the terms of the loan. A negative-amortization loan is designed so that the borrower pays only a percentage of the interest each month, while the remainder is added to the principal balance, leading to a constantly increasing principal. Such loans are particularly risky for elders with limited income and can lead to foreclosure and bankruptcy.

Girard Gibbs, a national litigation firm specializing in consumer class actions, securities and complex business litigation, has recovered more than a billion dollars on behalf of its clients. Girard Gibbs’s managing partner, Daniel Girard, was recently voted one of Northern California’s Super Lawyers by Law & Politics Magazine, recognizing him as one of the top 5-percent of attorneys practicing in Northern California.

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