A teaching moment from a scam report


What are we to make of a recent report in The Citizen that a 78-year-old woman had been scammed out of $4,000? It seems she was approached at the Fayette Pavilion by two women who, under pretense of obtaining reimbursement for an alleged flat tire repair to her car, drove her to the bank where she withdrew the cash and handed it to them.

A lot of people would simply buy this story, and of course think this is awful.

While the story came with enough details to be at least in part credible, our focus should not be on this incident and this woman. Though it is not right to jump to the conclusion that old folks in general have so-called cognitive impairments, some of them certainly do.

A recent article published in the Journal of the American Association of Individual Investors (AAII, July 2011) brings to light that, on average, 29 percent of people in their 80s suffer some form of cognitive impairment, and 39 percent above age 90. Simply put, decision-making skills deteriorate late in life, more so for some people than others.

Part of the problem is that while old folks notice the symptoms of their deteriorating physical health, they hardly notice what’s happening with their mental health. As a Harvard economics professor put it, We don’t remember that we have a bad memory, and we don’t know how bad it is.

While the AAII article focused on older people’s ability to make sound financial and investing decisions, there is a greater lesson here for all of us.

Bank employees need to be a lot smarter than they’ve shown themselves to be here. We live in a society where just about the only people who use large amounts of cash are dinosaurs, drug dealers, and people like Whitey Bulger, the reputed Boston gangster on the FBI most wanted list for 12 years who was recently apprehended in Santa Monica.

So it should be standard bank procedure to take customers who want a large amount of cash to a private office that would afford greater privacy for the counting and handout. That would also get them out of the sight of any watching scammer, and it would provide the bank an opportunity to offer them a bank check in lieu of cash, and to hear their reasons for insisting on cash.

The bank should also not hesitate to tell the customer that counting all this cash is a time-consuming burden to the bank, and that when the cash gets put into some other bank the task will have to be repeated, with possibly a report to be made to the U.S. Treasury under anti-money laundering laws.

As a lawyer, I have unfortunately heard incredible tales of stupid acts by old folks which I am not at liberty to repeat because of the confidentiality rules of the State Bar of Georgia. The conclusion I have come to, however, is that we’ve got to help our old folks.

My personal resolution as a lawyer is that from here on, if I help older persons, I will insist on having them provide me a written authorization to contact their children. What all too often happens is that old folks caught doing foolish things simply cut off contact with their lawyer, afraid that more dumb things will be exposed.

One characteristic of many old people is the fear of running out of money. Many of them will keep large amounts in bank checking accounts out of fear of an emergency. With its large elderly population, it’s no wonder the state of Florida is considered attractive to bankers.

The AAII article to which I referred reiterated the wisdom of using legal tools such as wills, powers of attorney, advance directives for health care and living trusts when getting old.

As the fear of running out of money keeps many older citizens from obtaining the legal advice and services they ought to have, unless they expect to be disinherited their children ought to step up to the plate and offer to pay their parents’ legal bills.

Let’s face it, anything your mom or dad is scammed out of is something you won’t inherit, so the benefit of the aging parents’ proper legal planning is more for the children than the parents.

We’re all headed in the same direction in life, namely getting older, and older, and older. It is indeed disgraceful that we should have scammers among us, who should of course be caught and punished, but there are things we can do for our currently old people that could prevent a lot of the heartache we feel when we encounter stories like The Citizen presented to us, which may be only the tip of the iceberg.

Step one in all of this is awareness of what the aging process does to people (which, down the road, means you, too). Step two is the adoption of common-sense measures like those I am telling the banks to adopt. And step three is the resolution to be proactive, by properly using the legal tools available to help with that kind of problem.

[A Fayette County resident, Claude Y. Paquin is a retired lawyer and actuary who in past years authored a series of columns on sales taxes for The Citizen.]