Ageing Japan: Dementia puts financial assets of the elderly at risk

Kyoto Financial

12/12/2018 23:00

By Hideyuki Sano
    TOKYO, Dec 13 (Reuters) - Yumiko Okubo, 71, had forgotten
how to heat up food.
    "What's a microwave?" she asked her husband, Eiichi. 
    Yumiko was in the early stages of dementia, struggling with
vocabulary and unable to teach the kimono-dressing classes she
had run for 25 years.
    The difficulty with everyday tasks has made life challenging
for her and Eiichi, who has been caring for her since 2008.
    But she is also unable to deal with her finances - a
situation that experts say is increasingly common in fast-ageing
Japan and that puts trillions of yen worth of assets at risk.
    Rika Kambayashi, a social worker in Kyoto, says she has seen
many cases of dementia patients withdrawing large sums without a
clear grasp of what they are doing or why.
    In one example, she said, a woman in her 90s withdrew 20
million yen ($266,000) of her savings at a grandson's urging.
    "She was saying she withdrew nine or ten. It took me a while
to realise she was talking about a number of banknote rolls,"
Kambayashi said. A roll is typically one hundred 10,000 yen
notes. "It was clearly a case of abuse."
    Dementia has been diagnosed in more than 5 million Japanese.
The government estimates that number will increase to 7 million
to 8 million, or 6 to 7 percent of the total population, by
2030. 
    The OECD has a somewhat lower estimate that dementia will
affect 3.8 percent of Japan's population by 2037, still the
highest among the 35 OECD states and far above the average of
2.3 percent predicted for the group.
    Japanese with dementia will hold about 215 trillion yen ($2
trillion) in financial assets by 2030, compared with 143
trillion yen now, according to estimates by Dai-ichi Life
Research.
    Many companies now face risks in doing business with people
with dementia, whose families may return later to ask that the
transaction be cancelled, said Jin Narumoto, professor of
psychiatry at Kyoto Prefectural University of Medicine.
    A survey by Narumoto and three other researchers found about
30 percent of dementia patients and families have experienced
financial losses because of the condition.
    Bank officials say tellers now regularly encounter people
with dementia who cannot use an ATM or who repeatedly ask the
same questions. Some behave strangely, accuse employees of theft
or even become violent. 
    Dementia is closely linked to age, and by 2030, about 31
percent of Japan's population is projected to be 65 or older. As
the country's life expectancy is 84 years, the highest in the
world, the problem of dementia will only intensify.
        
    REGULAR ENCOUNTERS
    Dementia is caused by several diseases, with Alzheimer's
accounting for about two-thirds. It covers a range of symptoms,
broadly defined as a decline in memory and thinking serious
enough to hamper daily life.
    Patients gradually lose their ability to count, tell time,
or recognise places and people, including close relatives.
There's no known cure, although there are medications to slow
the condition's progress.
    As banks encounter more customers dealing with dementia,
many, such as Nomura and Sumitomo Mitsui Trust Bank, are
educating staff about how to safely and fairly handle
interactions.
    "In the past, teller staff have been dealing with each case
ad-hoc. But it is important they sit together with people with
medical background and learn about dementia," said Masaru
Mimura, professor at neuropsychiatry at Keio University in
Tokyo.
    In Tokyo, five shinkins, or cooperative financial
institutions, jointly set up a non-profit called Shinkin
Seinenkouken Support to offer low-cost financial guardian
services for people with dementia, working closely with a local
government.
     Guardians are appointed by a local court and help their
clients professionally manage finances. They can act on behalf
of their clients and even cancel contracts or purchases if
needed.
    Perhaps most important, they help families learn to cope
with the ailment, introducing them to social welfare services.
    But such systems have been prone to abuse. From 2010-2015,
there were almost 3,000 reported cases of misuse, with 21
billion yen stolen by guardians, and many experts say there is
little oversight. 
    To address that, Shinkin Support assigns two guardians for
each customer. It also conducts regular staff audits, much as
banks do.
    "Because we assign two people, our cost is twice as much as
others. But we think that is a cost we need to pay," said
Hitoshi Hiramori, director of Shinkin Seinenkouken Support. "We
think of this more as community service."
    Several other banks offer products that allow guardians only
limited access for daily use, to prevent embezzlement. 
    Other organisations hope technology will provide a solution.
    Money Forward  3994.T , a fintech company that offers
bookkeeping and financial management services, is developing an
app-based warning system for suspicious transactions.
    If someone who rarely withdraws money suddenly goes to an
ATM seven times in one day, for instance - a possible sign their
memory could be impaired - the app can alert the person's
family, said Toshio Taki, board director of the firm.
    For the Okubos, such assistance would help reduce some of
the stress of everyday life - and help the couple focus on the
normalcy that remains.  
   "Even after she stopped using a wallet by herself, she still
could do other things completely fine, like taking pictures or
walking," Eiichi Okubo said, reminiscing about 500-kilometre
hikes they took in 2012 and 2014. "All my friends today are
people who I came to know after Yumiko's dementia. So I feel I
owe myself to her."
    
    ($1 = 113.22 yen)

 (Additional reporting by Daniel Leussink and Tomo Uetake in
TOKYO. Editing by Gerry Doyle)
 ((hideyuki.sano@thomsonreuters.com; +81 3 6441 1827; Reuters
Messaging: hideyuki.sano.thomsonreuters.com@reuters.net))