Much has been written about financial abuse of the elderly. It has always been a problem but more prevalent in the last few years with new opportunities with online access. This fast growing form of abuse is most times perpetrated by family members – making the violation of trust even more devastating. However the growth of scams committed by professionals is also on the rise.
The National Adult Protective Services Association cites the following statistics:
- One in nine seniors reported being abused, neglected or exploited in the past twelve months; the rate of financial exploitation is extremely high, with 1 in 20 older adults indicating some form of perceived financial mistreatment occurring in the recent past
- Elder abuse is vastly under-reported; only one in 44 cases of financial abuse is ever reported
- Abused seniors are three times more likely to die and elder abuse victims are four times more likely to go into a nursing home
- 90% of abusers are family members or trusted others
- Almost one in ten financial abuse victims will turn to Medicaid as a direct result of their own monies being stolen from them
- Cognitive impairment and the need for help with activities of daily living make victims more vulnerable to financial abuse
With these frightening statistics and an aging population, education for both recognition of financial elder abuse and the prevention of it are crucial.
In many ways, financial abuse is similar to physical and emotional abuse but with one key difference. In many cases the person who is being abused has given consent to the person who is stealing their money. They’ve trusted that person and given them permission to use their money. It makes it a bit more difficult to prove.
It is also different in a domestic situation – such as their own home – and in an institutional setting, such as assisted living or a nursing home. Family members or caregivers can access their financial information, checking accounts or savings accounts. In an institutional setting it is much more difficult. The National Committee for the Prevention of Elder Abuse cites these examples of financial abuse:
- Taking money or property
- Forging an older person’s signature
- Getting an older person to sign a deed, will, or power of attorney through deception, coercion, or undue influence
- Using the older person’s property or possessions without permission
- Promising lifelong care in exchange for money or property and not following through on the promise
- Confidence crimes (“cons”) are the use of deception to gain victims’ confidence
- Scams are fraudulent or deceptive acts
- Fraud is the use of deception, trickery, false pretense, or dishonest acts or statements for financial gain
- Telemarketing scams. Perpetrators call victims and use deception, scare tactics, or exaggerated claims to get them to send money. They may also make charges against victims’ credit cards without authorization
The bottom line is that financial abuse is stealing the money, valuables or property of a vulnerable individual, even with their tacit permission, to benefit the thief and to the detriment of the victim.
The National Committee for the Prevention of Elder Abuse also cites the most likely perpetrators of these crimes: Family members, including sons, daughters, grandchildren, or spouses. They may:
- Have substance abuse, gambling, or financial problems
- Stand to inherit and feel justified in taking what they believe is “almost” or “rightfully” theirs
- Fear that their older family member will get sick and use up their savings, depriving the abuser of an inheritance
- Have had a negative relationship with the older person and feel a sense of “entitlement”
- Have negative feelings toward siblings or other family members whom they want to prevent from acquiring or inheriting the older person’s assets
Predatory individuals who seek out vulnerable seniors with the intent of exploiting them. They may:
- Profess to love the older person (“sweetheart scams”)
- Seek employment as personal care attendants, counselors, etc. to gain access
- Identify vulnerable persons by driving through neighborhoods (to find persons who are alone and isolated) or contact recently widowed persons they find through newspaper death announcements
- Move from community to community to avoid being apprehended (transient criminals)
Unscrupulous professionals or business persons, or persons posing as such. They may:
- Overcharge for services or products
- Use deceptive or unfair business practices
- Use their positions of trust or respect to gain compliance
Who is most vulnerable? Individuals that are more isolated, have physical or mental impairments and are lonely are the highest risk targets for financial abuse.
Forbes Magazine recently had an article on elder financial abuse and listed this four factors as high risk factors:
Poor Physical Health. Those who are physically compromised are unlikely to be focused on financial matters. They are often vulnerable to swindles.
Cognitive Impairment. When the ability to do basic things like read a banking statement or balance a checkbook declines, that’s when you have to pay attention. Those with declining math skills will not be asking important questions about new investing “opportunities.”
Difficulty in Activities of Daily Living. If a person has trouble feeding themselves, bathing or shopping, that’s a big set of red flags. That also means that they will have trouble managing money.
Social Isolation. Are they all alone? Then they won’t have the support of a network of peers, who could warn about scams.
Elderly individuals that have strong social and family connections are considered lower risk. However, financial abuse can still happen.
How to spot financial abuse. There are five signs that can indicate financial abuse:
- Sudden change in lifestyle. Are there overdue bills notices? Eviction notices? Lack of food, basic utilities and general cleanliness of the person or their home? Credit card charges? Missing possessions?
- The caregiver starts to object to money being spent on care, medications or food.
- A new caregiver or friend that appears and shows control over the individual.
- A new romantic relationship, especially online.
- A change in the person’s will or Power of Attorney.
Any of these signs warrant investigation. Careful management of the elder’s bank accounts and credit cards is essential. Most family members do not want to confront the caretaker, who is more than likely a family member, with their suspicions. However if suspicions arise, they must be addressed before it goes any further. You’ve found signs of elder abuse. Now what do you do? If you feel the person is in imminent danger, call 911 and get help.
An article in Next Avenue listed some steps to take with your loved one if you suspect financial abuse:
Discuss your concerns with your loved one, but make sure you are patient, understanding and nonjudgmental. Many victims of financial abuse and exploitation do not report the abuse due to embarrassment.
Point out the red flags you are seeing and gently ask what is going on. If they allow it, go over their banking and financial statements with them and/or discuss them with their attorney, financial planner or banker.
Subtly “challenge” the suspected exploiter. Often asking probing questions in a non-threatening tone will deter the person because they know you are on to them.
For things like mail fraud, repair scams, credit card abuse or theft of valuables or property, call the local police department about an “illegal taking.”
Where the financial abuse is due to cognitive or physical impairment, make an anonymous call to your county’s Department of Senior and Adult Services or your state’s Elder Abuse Hotline.
Getting the money back is challenging and hard to prove. But it needs to be stopped before all the money is depleted for their care. Banking and legal authorities need to be notified to protect the elder from further harm – and hold those responsible accountable for their actions.
The sooner the concerns are addressed, the better. Finding out what is going on is vital to protecting your loved one.
How to prevent elder care financial abuse. The American Bankers Association has tips for seniors on how to pre-plan and protect themselves from potential abuse.
- Plan ahead to protect your assets and to ensure your wishes are followed. Talk to someone at your financial institution, an attorney, or financial advisor about the best options for you.
- Shred receipts, bank statements and unused credit card offers before throwing them away.
- Carefully choose a trustworthy person to act as your agent in all estate-planning matters.
- Lock up your checkbook, account statements and other sensitive information when others will be in your home.
- Order copies of your credit report once a year to ensure accuracy.
- Never give personal information, including Social Security Number, account number or other financial information to anyone over the phone unless you initiated the call and the other party is trusted.
- Never pay a fee or taxes to collect sweepstakes or lottery “winnings.”
- Never rush into a financial decision. Ask for details in writing and get a second opinion.
- Consult with a financial advisor or attorney before signing any document you don’t understand.
- Get to know your banker and build a relationship with the people who handle your finances. They can look out for any suspicious activity related to your account.
- Check references and credentials before hiring anyone. Don’t allow workers to have access to information about your finances.
- Pay with checks and credit cards instead of cash to keep a paper trail.
- Feel free to say “no.” After all, it’s your money.
- You have the right not to be threatened or intimidated. If you think someone close to you is trying to take control of your finances, call your local Adult Protective Services or tell someone at your bank.
- Trust your instincts. Exploiters and abusers often are very skilled. They can be charming and forceful in their effort to convince you to give up control of your finances. Don’t be fooled—if something doesn’t feel right, it may not be right. If it sounds too good to be true, it probably is.
Careful planning can help prevent financial abuse. Talk with a trusted financial and legal advisor can help eliminate some potential problems. However, stay vigilant with elders and their finances. Even with the best planning, perpetrators – including trusted family members – can still take advantage of a vulnerable elderly person.