The “Exploitable Brain” and How to Recognize if You’re Being Scammed

By Jennifer R. Figurelli, CTFA

Financial exploitation of senior citizens is a profitable business. According to the Life Care Planning Law Firms Association, financial exploitation costs seniors nearly $36 billion per year. Recent AARP statistics revealed that only 20% of financial scams are reported, and 1 out of 5 people over the age of 72 will be exploited within the next year.

I recently attended a webinar hosted by the Professional Fiduciary Council of SW Florida, presented by Shannon Miller, Esquire, an attorney in Gainesville, Florida who specializes in elder law. Ms. Miller discussed the characteristics of individuals who are susceptible to financial exploitation, how to recognize the red flags of undue influence, and how professionals like us can educate, inform, and protect our clients and loved ones.

Recent advances in brain science show that there is scientific evidence that differentiates between incapacity and exploitability; thus, they are not the same. The challenge is that many legal and financial professionals are trained to recognize incapacity, but not exploitability.

Bonnie E. Levin, PhD, is a Professor of Neurology at the University of Miami, who presented on November 15, 2019, at the “Stopping Financial Exploitation-Florida on the Forefront” conference in Gainesville, FL. Dr. Levin stated that the exploitable brain loses its ability to assess the risks and benefits of making a financial decision due to a thinning of the cortical insula in the human brain, and this typically occurs 10 years before someone becomes fully incapacitated. Thus, while this person may have excellent memory, they don’t have sufficient information to recognize a scam.

Dr. Levin’s study revealed that people who are susceptible to exploitation are those who are age 55 and older, risk takers, overconfident investors, financially vulnerable, have sensory impairments (auditory, visual), increased trusting behavior, lonely, and may be under high levels of stress. The demographics are as follows: 69% are female, 40% live alone, 47% have an education at graduate level, and 80% are social media users/computer literate. What is also interesting is that 25% have stated that they never have been a victim of a scam, yet 55% answered “yes” when asked if they had a friend who had been a victim of a scam. Thus, these people have a tendency not to admit being scammed.

Scammers typically use two methods often in combination to financially take advantage of people: 1. Internet/Phishing Scams, like “I need access to your computer, etc.” and 2. Telephone Scams. As for internet/computer usage, scammers intentionally put errors in emails to determine if someone can tell the difference between a legitimate website and a scam website (ex. www.IRS.gov versus www.IRS.com. Eventually the filter gets smaller and smaller, to the point where the scammer gets a person’s address and phone number. Then the phone calls start. Ms. Miller said that the value of a victim’s information on the Dark Web increases the longer they spend on the telephone talking to a scammer. This is because the victim’s deficits (mental capacity, level of vulnerability, etc.) are revealed so the scammer has a good insight as to whether the victim can tell the difference between a truth versus a lie.

What protective actions can be taken to prevent someone from being a target of financial exploitation?

  • Adding the telephone number to The Do Not Call Registry
  • Background checks on all home/health caregivers
  • Name someone you trust as your financial power of attorney
  • List a “Trusted Contact” on your financial accounts
  • Enroll in a service that tracks your spending and alerts to suspicious activity in your bank, investment, and credit cards.
  • Keep a “Need to Know” file (a file that our firm creates for our clients with key information) current and in an accessible place, so it is available for reference when needed.
  • Hire a professional to act as an intermediary to oversee your financial matters, such as auditing/reviewing your monthly banking and credit card statements.

 

As a fiduciary, Andrew Hill Investment Advisors, Inc. is obligated to act in the best interest of our clients. We recognize that if an existing or prospective client suffers from diminished mental capacity, they may lack the ability to make knowledgeable and prudent financial decisions. Our firm has policies in place to identify red flags indicative of financial abuse of a vulnerable client and to take such actions as are reasonable and appropriate to involve the client’s representatives and or the proper authorities to protect such clients from financial harm.

For more information and resources on this topic, please visit the following websites:
The Aging Brain: The Reason Seniors Are Most Vulnerable To Scams – The Miller Elder Law Firm
UCF Developing Scam Screener for the Elderly | University of Central Florida News

WEBSITE DISCLAIMERS & DISCLOSURE

Business Continuity and Succession Plan Disclosure Statement

Andrew Hill Investment Advisors, Inc. (“AHIA”) maintains a Business Continuity and Succession Plan (“BCP”) that has been developed with the goal of protecting the health and safety of our employees and maintaining continuity of service for our clients. Our Plan is designed to ensure that we are prepared to operate through significant business disruptions, so that our clients can access their accounts without significant interruption under most circumstances.
Key elements of our BCP include the following:

  • Critical data from our computer systems is backed up daily to geographically remote, secure facilities.
  • All AHIA employees can access its computer data remotely via secure connection. If AHIA’s primary network is not accessible, AHIA maintains replicas of all files and database servers in a geographically remote disaster recovery network available to all employees over a secure connection.
  • We maintain an office evacuation plan and emergency procedures in the event of a disaster affecting our primary office facilities or surrounding area.
  • We maintain an emergency contact list and procedures updated and distributed on a regular basis.


If your account requires servicing during a significant business disruption and we are unable to assist you, please call Fidelity Investments at 1-800-523-1203 and a dedicated team member will be able to assist you. It is impossible for us to anticipate every potential problem that may occur, but we believe our BCP will enable us to conduct business in the event of a variety of possible business disruptions. We review and test our BCP at least annually and it is subject to modification based on changing circumstances and assessment of need.

As a fiduciary, AHIA has certain legal obligations, including the obligation to act in client’s best interest. AHIA seeks to avoid a disruption of service to clients in the event of an unforeseen loss of key personnel, due to disability or death. To that end, AHIA has entered into a succession agreement with The Colony Group, LLC, effective May 24, 2019. AHIA can provide additional information to any current or prospective client upon request to Andrew D.W. Hill, President at 239-777-3188 or [email protected].

Andrew Hill Investment Advisors, Inc.
Privacy Notice

Andrew Hill Investment Advisors, Inc. (“AHIA”) believes it is essential that we maintain the privacy of the nonpublic personal information provided to us and that we obtain in connection with providing our products and services to clients.  AHIA views protecting its customers’ private information as a top priority subject to the requirements of the Federal Gramm-Leach-Bliley Act.  AHIA has instituted policies and procedures to ensure that client information is kept private and secure. 

AHIA limits the use, collection, and retention of such information to what we believe is necessary or useful to conduct our business and to provide and offer clients quality products and services, as well as other opportunities that may be of interest. Information collected may include, but is not limited to name, address, telephone number, tax identification number, date of birth, employment status, annual income, and net worth. 

In providing products and services, we collect nonpublic personal information about our clients from the following sources: 

  • Information we receive from clients on applications or other forms (e.g. investment/insurance applications, new account forms, and other forms and agreements);
  • Information about client transactions with us or others (e.g. broker/dealers, clearing firms, or other chosen investment sponsors); and
  • Information we receive from consumer reporting agencies (e.g. credit bureaus), as well as other various materials we may use to put forth an appropriate recommendation, or to fill a service request.


AHIA does not disclose any nonpublic personal information about its clients or former clients to any non-affiliated third parties, except as permitted by law.  While servicing a clients’ account, AHIA may share some information with its service providers, such as transfer agents, custodians, broker-dealers, accountants and lawyers.  Additionally, we will share such information where required by legal or judicial process, such as a court order, or otherwise to the extent permitted under the federal privacy laws.  

AHIA restricts internal access to nonpublic personal information about clients to those associated persons of AHIA who need to access that information to provide services.  As emphasized above, it has always been and will always be AHIA’s policy never to sell information about current or former clients or their accounts to anyone.  It is also AHIA’s policy not to share information unless required to process a transaction, at the request of a customer, or required by law.

AHIA places strict limits on who receives specific information about client account(s) and other personally identifiable data. As a rule, we do not disclose nonpublic personal information we collect to others. However, because we rely on certain third parties for services that enable us to provide our advisory services to clients, such as our attorneys, auditors, other consultants, brokers, and custodians who, in the ordinary course of providing their services to us, may require access to information, we may share nonpublic personal information with such third parties. 

AHIA may also disclose such information to others upon a client’s written instructions.  Such written instructions may be amended, and/or rescinded at any time in writing.  If a client prefers that we not disclose confidential personal information about them to non-affiliated third parties who provide a product or service that we feel would benefit them, the client may direct us not to make disclosures to such non-affiliated third parties via an opt-out provision.  We restrict access to nonpublic personal information about clients to those persons associated with AHIA, who need access to such information in order to provide our products or services to clients.  We maintain physical, electronic, and procedural safeguards that comply with federal standards to guard clients’ nonpublic personal information. If a client decides to close his/her account(s) or become an inactive customer, we will adhere to the privacy policies and practices as described in this notice. 

AHIA reserves the right to change these Privacy Principles, and any of the policies or procedures described above, at any time without prior notice. However, clients will be promptly provided with a current copy of our privacy notice upon material changes or upon request.  Active clients will receive a current copy of our privacy notice at least annually. These Privacy Principles are for general guidance and do not constitute a contract or create legal rights, and do not modify or amend any agreements.   If you have questions about this privacy policy, or if you wish to amend or rescind your written instructions with us at any time, please call us at (239) 777-3188.