Category Archives: Finances

Resisting Robocalls

The barrage of unwanted robocalls to private American telephones continues unabated. Seniors are a primary target. The callers use all sorts of ploys to try to trick us into buying dubious goods and services or to hand over vital information, such as credit card and bank bank account numbers, that can be used to defraud us.

Robocallers are tricky, to say the least. They may adopt a friendly, conversational tone so that we lower our defenses, or they may play on our fears and desires. When Rachel, from Credit Card Services calls, we may listen to her pitch out of fear that we might have overlooked a payment.  We don’t want the kids to think that we’re letting car maintenance slide, so we may listen to Joe from the Auto Service Department when he calls to offer an extended warranty. We seniors love to travel, so why not listen when someone calls to offer a free cruise or a stay at a holiday resort?

You might think that law enforcement would protect us from these calls, and some steps are being taken. But efforts so far seem woefully inadequate. The Federal Trade Commission and the State of Florida launched a suit against the company allegedly behind Rachel in June 2016, but I’ve had a couple of calls from her in the past few weeks. Meanwhile, our phone in New York State rings three or four times a day — sometimes more — with other unwanted calls.

What can we do to protect ourselves? Many of us already refuse to pick up the phone when we don’t recognize the caller, although that means enduring many annoying rings. Robocallers these days are able to spoof area codes, numbers, and identities in an effort to fool us into picking up anyway. The only thing to do then is to hang up as soon as we realize that we’re listening to the opening recording of a robocall or the voice of someone who is trying to sell us something. Pressing any buttons or saying anything may give robocallers information and alert them to the fact that they have reached a live number, resulting in even more calls.

Beyond eternal vigilance, there are some technical measures that can be taken against robocallers. An easy one is to punch *77 into your receiver. In most parts of the country this will enroll you in Anonymous Call Rejection, putting an end to calls from “unknown name, unknown number.” If, for some reason, you want to start receiving those calls again, punch in *87.

A much more powerful free tool, Nomorobo, is available if you receive your landline telephone service through an internet provider, such as Verizon Fios, Time Warner, Xfinity, or Frontier. Nomorobo uses data analysis to identify numbers being used to make robocalls and blocks them from ringing your phone. We’ve added Nomorobo at our townhouse in Virginia, where the service comes through Verizon FIOS, and the phone has been blessedly quiet.

Unfortunately, traditional landline providers have not yet adopted the Nomorobo technology, or something similar. That’s the situation at our home in the Finger Lakes, where our only option would be to purchase a device, such as a Sentry 3 or a Digitone Call Blocker. Judging from the reviews at Amazon, these devices can be a little tricky to set up, but are highly effective. If we were staying at our place in New York, we would probably buy a call blocker, since the robocall situation there is pretty bad.

What about cell phones? So far, I haven’t received many robocalls on my cell, but there have been a few. There are some cell phone call blocker apps that I might consider if things get worse — Nomorobo sells one for the IPhone for $1.99 a month, with an Android version promised for the future. Truecaller is a free app claiming millions of subscribers that offers caller ID, call blocking, and a global telephone directory. Privacy is the main concern with Truecaller — when you download the app, it crawls your contacts and adds them to its directory. That’s why the directory is so powerful. If privacy isn’t a concern, Truecaller may be for you.

Of course, anyone who wants to avoid telemarketing calls should sign up for the National Do Not Call Registry, but that’s only effective with respect to law-abiding telemarketing firms. The problems seniors face come instead from the illegal robocallers employing techniques aimed at our vulnerabilities. That’s why it’s also a good idea to support the End Robocalls Campaign being led by Consumers Union. You can sign their petition at https://consumersunion.org/end-robocalls/.

 

 

 

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Another Straw in the Wind

Here’s another straw in the wind suggesting that the times are becoming unfriendly to seniors.

House Republicans have unveiled preliminary outlines of their health care reform agenda, with the intention of moving forward with major changes in coming weeks. Changes to Medicaid are a high priority, and Republicans are considering either (1) giving states a fixed amount for each person enrolled in Medicaid or (2) giving states block grants to carry out the Medicaid program as each state sees fit.

Either choice could be a serious problem for the 4.6 million seniors with limited incomes who have dual eligibility for both Medicare and Medicaid. Medicare pays for their hospitalizations and physician services, but Medicaid is vital to these seniors for coverage of nursing facility care, prescription drugs, eyeglasses, and hearing aids.

The cost of skilled care in a nursing home or assisted living facility is a great worry for seniors and their families. Many simply do not have the resources to pay for either. Others have some resources, but not enough to pay for long term care. Typically, a senior in this situation who falls ill may be sent to a rehab facility after a hospital stay for the 100 days that Medicare allows, and then have to stay on or move to another facility at their own expense. With the average cost of a nursing home at $6,235 per month, and assisted living at $3,500, it doesn’t take long for even middle class seniors to deplete whatever savings they may have.

But the saving grace today is that once their resources are depleted, seniors can enroll in Medicaid. They are allowed to keep their house, if they have one, and they don’t have to bankrupt their children to pay for their care. Medicaid will take care of them.

If Congress limits the Medicaid amount available per person, or limits the states to block grants, Medicaid may no longer be able to meet its promise to care for seniors. According to the New York Times, “About 60 percent of the costs of traditional Medicaid come from providing nursing home care and other types of care for the elderly and those with disabilities.” With the percentage that high, seniors are almost certain to be hit by any reduction in Medicaid resources.

Seniors are worried about what the Republican Congress might eventually do to Medicare, and rightly so. But for the moment, Congress and the President don’t seem ready to take on that popular program. They may never be ready. Nonetheless, seniors should be alert to the dangers the Medicaid program faces. They could be hurt by these changes, and their children could be hurt as well.

 

 

Finances: Seniors Must Be Ever-Vigilant

The political changes that have taken place in the united States heighten the need for seniors to be vigilant with respect to their finances and their retirement savings.

In April 2017, an Obama-era Labor Department regulation known as the “fiduciary rule” had been slated to take effect. Under that rule, financial advisors, when advising clients on their retirement savings, would be required to put the interests of the clients first. Many sell financial products, such as annuities, on which they earn commissions, but the new rule would forbid advisors from receiving commissions that create a conflict of interest with their fiduciary responsibility to their clients.

However, on February 3, President Trump called for a review of the fiduciary rule, and the expectation is that his administration will prevent it from coming into force. Fortunately, many seniors have already moved their retirement savings into index funds at Vanguard and similar firms, where management fees are very low and commissions are not an issue. Moreover, some financial services firms are moving to fee-only advisory services and giving up on commissions altogether. Nonetheless, the Obama administration estimated that conflicts of interest on the part of financial advisors take an estimated $17 billion per year out of the IRAs and 401(k)s of American citizens.

The fiduciary rule would have offered an important protection to retirement savers, but since it will likely not come into force, seniors are going to have to fend for themselves, as ever. They will have to take care to seek out a truly independent financial advisor — one who charges a fee and earns no commissions from the products he or she recommends. This means asking tough questions at the outset, but the results will be worth it.

Meanwhile, Republicans in Congress are moving to do away with or sharply restrict the Consumer Financial Protection Bureau. This is the watchdog agency that uncovered the scam at Wells Fargo Bank.  As the Bureau put it, “Spurred by sales targets and compensation incentives, [Wells Fargo] employees boosted sales figures by covertly opening accounts and funding them by transferring funds from consumers’ authorized accounts without their knowledge or consent, often racking up fees or other charges.” Many, including Senators Susan Collins and Clair McCaskill of the Senate Special Committee on Aging, suspect that the bogus account scheme specifically targeted seniors.

The Consumer Protection Bureau also took action against the Navy Federal Credit Union, which had been “making false threats about debt collection to its members, which include active-duty military, retired servicemembers, and their families.”

How can seniors protect themselves against these sorts of scams if the Bureau disappears or is weakened? That’s going to be tough, but if you suspect something fishy, complain loudly and be sure to let your representatives in Congress know.

Republicans in Congress are also trying to prevent California, Illinois and other states from taking measures to help workers at companies that don’t offer retirement plans to set up their own retirement accounts. In California,for example, according to the New  York Times, “participating employees would have a small percentage of pay deducted from their paychecks, unless they opted out. Those amounts would be pooled and managed by investment professionals chosen by the state in a bidding process; the plan would be overseen by a board of government and business leaders appointed by the governor and the Legislature.” Some financial firms seem to see this as an encroachment on their turf.

These are just some of the straws in the wind indicating that the times are unfriendly to seniors.  We must be vigilant to protect our interests.

 

 

 

Be Cautious in Signing Nursing Home Agreements

Seniors who must go into a nursing home, or who are helping a loved one who must do so, should be careful about the agreements they sign.

If you’re helping a loved one — an aging parent, say, or a sibling — watch out for a “responsible party” clause. A nursing home representative who asks you to sign such a clause isn’t looking for a contact person. Instead, you are being asked to become personally liable for paying the bills. The responsible party clause may not spell that out — the harsh reality may be buried in a definition later in the contract.

A binding arbitration clause should also raise a red flag. Anyone who signs such a clause gives up their right to sue the nursing home in the event of any sort of abuse or neglect — and such things happen. You will have no right to a judge and jury to hear your complaint if you sign, nor any right of appeal. Ordinary legal procedures, such as the right of discovery of evidence that might be in the possession of the nursing home, will not be available.

Your case will be heard in private by an arbitrator who must be paid, and the entire process may be more expensive than a court proceeding. Since the arbitrator will have an interest in doing repeat business with the nursing home, the process will could well be stacked against you from the outset.

ElderLawAnswers advises that if you encounter responsible party and binding arbitration clauses, cross them out. Several sources say that you can’t be denied admission for refusing to sign — so don’t be pressured.

Binding arbitration clauses are also turning up in continuing care retirement community agreements, so watch out for them there as well. Things can go wrong in CCRCs, however pleasant they may seem. Promised services might be taken away, for example, or maintenance might be neglected. You’ll want to have the right to sue in your back pocket.

Your best course of action, whether you’re considering a nursing home or a CCRC, will be to have an attorney review all agreements before you sign.

Question for “The Ethicist.” Is it Ethical to Ignore Potential Elder Abuse?

I was really bothered by “The Ethicist” column in Sunday’s New York Times Magazine. Entitled “Can You Keep a Woman From Courting Your Elderly Dad,” the column opened with a long letter from an adult child, name withheld by request, of a man nearing ninety and living in a senior residential facility.

The man is being courted by a staff member at the facility, a woman in her sixties, in violation of the facility’s rules. They’ve gone on surreptitious dates, and he’s shared some oxycontin pills he has been prescribed with the woman, at her request. Name Withheld suspects he has given her money.

The advice of Anthony Appiah, The Ethicist? In essence, “Butt out.” In Appiah’s view, the father is within his legal and moral rights, and reporting the matter to the facility’s management would be “disrespectful.”

This response has provoked a flurry of comment, which you can read by clicking on the little cartoon balloon at the upper right of the online page. Many of the comments mention “elder abuse,” which is certainly on my mind.

But the matter isn’t quite so simple. Name Withheld’s letter makes clear that he or she and the siblings are worried about their inheritance. This is pointed out by commentators who agree with the ethicist.  On the other hand, wouldn’t anyone be concerned about their inheritance in such a situation?  Does that concern disqualify them from reporting possible elder abuse?

If only this man had assembled a “protective tribe” of friends and trusted family members before going into the facility, instead of keeping his financial affairs secret as he continues to do. Of course, if the man was worried that a particular family member was only after his money and not concerned about his happiness and well-being, then that person should have been excluded from the tribe.

Anyway, the column and the discussion give much to think about. What’s your opinion?

 

Obama Acts to Protect Regulations That Protect Seniors

In April, the Department of Labor — after years of deliberation and public comment — issued regulations requiring that financial advisers act in the best interests of their clients in giving retirement investment advice. Once the regulations take effect, advisers will no longer be able to steer clients to investments that generate high fees for the advisors and lower returns than investors might get with other investments.

Under the regs, advisers will have a much harder time selling their variable, fixed, and equity annuities — and all the complicated combinations thereof — and will have to focus on lower-cost investments such as stock index funds. These are investments that buyers can actually understand.

The regulations are just common sense, but the Republican-controlled Congress, under pressure from the financial industry, sought to thwart them. On April 28, the House passed a resolution of disapproval, and the Senate passed the same resolution, H.J. Res. 88, on May 24.

Thankfully, on June 8, President Obama vetoed the resolution, and now, the regulations can come into force. In his veto message, the President said,

“The outdated regulations in place before this rulemaking did not ensure that financial advisers act in their clients’ best interests when giving retirement investment advice. Instead, some firms have incentivized advisers to steer clients into products that have higher fees and lower returns — costing America’s families an estimated $17 billion a year.”

If you want to see how your House member or Senator voted on H.J. Res. 88, click here and here. A vote in favor of H.J. Res. 88 is a vote for the industry; a vote against is a vote for seniors. Take note, and remember in November.