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May 7, 2012
TOPEKA A federal official charged with protecting senior citizens’ finances today lashed out at insurance companies that use free-lunch seminars to lure unsuspecting customers and criticized lending companies that pay older celebrities to peddle reverse home mortgages.
“We’ve got all these Hollywood retirees out there now, telling (seniors) all the important, good things to do with a reverse home mortgage,” said Hubert H. Humphrey III, assistant director with the Office of Financial Protection for Older Americans at the Consumer Financial Protection Bureau.
“And, of course, we ought to be listening to them, right?” he said sarcastically. “Their whole life has been a fake.”
Humphrey, 69, met for about an hour Monday with members of the Kansas Attorney General’s Vulnerable Older Adults Task Force, which is looking for ways to protect seniors from scam artists and unscrupulous relatives.
Reverse mortgages, Humphrey said, are complicated transactions that often put seniors at risk and are a “tough deal to get out of.”
Most seniors considering reverse mortgages, Humphrey said, would be better off selling their homes and moving to residences that require less upkeep and would better meet their needs.
Humphrey said he routinely receives invitations to free-lunch seminars put on by insurance salesmen whose only qualification for counseling seniors is having “attended a two-hour conference” on how to sell them policies that offer little or no benefit.
A recent study, he said, found that financial abuse costs seniors about $3 billion annually.
Humphrey compared the abuse to robbing banks.
“People ask ‘Why do people rip off the elderly?’ he said. “The answer is because that’s where the money is.”
The New York State Attorney General’s Office, he said, has released a study that found that only one in 40 cases of financial abuse is reported to authorities, usually due to embarrassment or to a parent not wanting to prosecute a son or daughter who’s handing their affairs.
Humphrey encouraged the task force members to address those issues publicly.
“You’ve got to speak up,” he said. “Don’t be afraid.”
Humphrey, a Democrat, served in the Minnesota Senate for 10 years. He was the state’s attorney general from 1983 to 1999.
He is the son of former U.S. Vice President Hubert H. Humphrey.
Don Strong, who runs the Wichita-based Mid Kansas Senior Outreach Program, said 80 percent of the program’s caseload involves adult sons and daughters spending their parents’ estates on themselves.
“It’s by far the most common type of abuse involving older adults,” he said. “Very commonly, it involves an adult child who’s unemployed, who’s in a position of taking care of a parent and who has a problem with drugs or alcohol or a combination of the two.”
Strong said he and others on the task force were looking for ways to encourage police, prosecutors and social workers to look for ways to identify and protect vulnerable seniors in ways that “respect their dignity.”
The task force is chaired by former Kansas Attorney General Bob Stephan.