(C) SouthPoint Financial Credit Union

As South Korea enters an era with over one million dementia patients, a disturbing trend is surfacing: the rapid rise of "economic abuse" targeting the elderly. According to data from the Ministry of Health and Welfare, financial abuse against seniors with dementia has surged by 186% over the last four years, jumping from 30 cases in 2021 to 86 in 2024. However, experts warn that these figures represent only the tip of the iceberg, as many victims are unable or unwilling to report the crimes.

Family Members as Primary Perpetrators

The data reveals a heartbreaking reality: 64.1% of perpetrators are close family members, including sons and daughters. Exploiting the victim's declining cognitive functions, these "black hands" often drain savings or seize real estate before legal safeguards are established.

In one case, a caregiver assumed the role of a "surrogate family member" to siphoned off nearly 400 million KRW from an 80-year-old victim. When the victim’s children attempted to intervene through a legal adult guardianship petition, the victim—emotionally dependent on the abuser—defended the caregiver, claiming the transfers were voluntary.

The "Blind Spot" of Early-Stage Dementia

The most vulnerable period occurs during the Mild Cognitive Impairment (MCI) stage or early-onset dementia. Currently, approximately 2.98 million Koreans suffer from MCI. Because these individuals are not yet legally classified as "incompetent," and because medical records are not automatically shared with financial institutions, banks often maintain their accounts as "normal."

Perpetrators exploit this window by taking victims to bank branches to withdraw cash or transfer assets while the victims can still remember their passwords or provide a signature. In one instance, a child cleared out a parent’s savings and sold their home before abandoning them at a nursing home, leaving the state to pick up the medical expenses.

Vulnerability to Voice Phishing

The elderly are also increasingly targeted by external criminal organizations. Data from the National Police Agency shows that the proportion of voice phishing victims aged 60 and older rose from 16% in 2020 to 30.6% as of August 2024. The lack of financial literacy combined with cognitive decline makes this demographic an ideal target for sophisticated scams.

The Need for Systematic Safeguards

Experts argue that current protections are insufficient. Once a patient’s cognitive decline is recognized by a bank, assets are often frozen to prevent theft, leading to a "financial clog" where funds cannot be accessed even for necessary medical care.

"To prevent the vulnerability of assets held by the elderly in a super-aged society, we must activate guardianship and trust systems," says Hong Suk-chul, an economics professor at Seoul National University. Proponents of reform suggest that institutionalizing "Dementia Trusts"—where a public or professional trustee manages funds—is essential to ensuring that a senior’s life savings are used for their own welfare rather than being preyed upon by relatives or scammers.

[Copyright (c) Global Economic Times. All Rights Reserved.]