What Is Financial Elder Abuse?
Financial elder abuse involves taking advantage of older people and unfairly benefiting from their monetary resources. Family members, business associates, caregivers, and strangers sometimes financially abuse elders by taking advantage of their trust. Tactics involved in financial elder abuse include the unauthorized use of an older person’s assets, gaining power of attorney by way of trickery, or engaging in fraud.
- Research shows that financial elder abuse has been self-reported more frequently than emotional, physical, and sexual abuse, or neglect.
- Older adults can be abused by family members, business associates, caregivers, and even strangers.
- Tactics include unauthorized use of financial assets, getting power of attorney assigned through false pretenses, and engaging in fraud.
- Warning signs include rapid drawdowns in financial accounts, increased account activity, new accounts opened without the account holder’s knowledge, and recent changes to important documents such as wills, mortgages, trusts, and deeds.
- If any type of elder abuse is suspected or confirmed, reach out to both law enforcement and the National Adult Protective Services Association (NAPSA).
Understanding Financial Elder Abuse
Financial elder abuse often involves family members who think they are entitled to a parent’s, grandparent's, or other older relative's assets. According to the National Center on Elder Abuse (NCEA), part of the U.S. Department of Health and Human Services, a 2011 New York State study found that 41 in 1,000 elders reported financial abuse, a rate higher than that for emotional, physical, and sexual abuse, or for neglect. The organization also notes this figure typically is underreported. Abusers exploit as many as five million older Americans financially each year, costing them $3 to over $35 billion annually.
All states have long-term care ombudsmen, whose job it is to advocate for residents of nursing homes and assisted-living facilities.
Individuals at risk for financial elder abuse include older adults who depend on personal care from others, those who recently lost a spouse who handled the finances, and those living in long-term care facilities. Financial elder abuse sometimes involves threats. For example, family members who withhold needed care for an older relative or warn they’ll send that person to a nursing home unless they sign over financial assets are engaging in elder abuse.
Signs of Financial Elder Abuse
Warning signs of financial elder abuse include rapid account drawdowns or other unusual financial behavior, as well as new close friends who seem to know a lot about an older adult's personal and financial life. Other signs include the opening of unknown accounts, increased account activity, and suspicious withdrawals. Moreover, recent and unknown changes to wills, mortgages, trusts, deeds, and property titles all provide warning signs.
The signs above are common but are only able to be viewed by those within close contact of the abused elder. Some other signs that are less subtle include noticing someone close to the victim wearing new clothes, driving a new car, or otherwise spending more lavishly than their income might permit. It could include noticing someone close to the victim receiving more bank notices than normal (opening new accounts or businesses to deposit stolen money), noticing creditors calling or showing up the victim's residence, and others.
Other signs include noticing heirlooms missing from the victim's house or noticing someone in your house with new jewelry, watches, etc when they are in close contact with an elder they have the potential to abuse. Landlords could notice that the elder is late on rental payments and hasn't been in the past. It could be as simple as noticing the elder has a "new best friend" that is always around the elder and seems overprotective of the relationship they have developed.
How Financial Elder Abuse Is Committed
Financial elder abuse can be committed in a number of ways. Someone could simply steal a watch from the elder. Another more savvy thief might open a shell company and "bill" the elder for services that look legitimate on paper but never occurred. An abuser may be able to forge the signature of the victim and apply it to checks, loans, credit card paperwork, or other financial outlets where they could withdraw funds directly from the victim.
An abuser may take new items from the elder's home and "return" them to the store they were purchased from and spend the credit themselves, as there is no name associated with it. Elders should be especially careful around those who claim they have won a lottery or sweepstakes. Be wary of those who promise services with payment in advance unless they are a legitimate company.
There are other more nefarious means of committing financial elder abuse that are perpetrated by those who are in positions of social trust. This would include bankers, lawyers, caretakers, and health care providers. They may transfer funds directly, assign payments to themselves, make withdraws "for" the victim, etc. Lawyers would be able to change wills and forge a signature.
There are so many ways financial elder abuse is committed. Unfortunately, so much of the abuse goes unreported because the elder is often alone and in a lot of cases has no idea they are being taken advantage of or outright stolen from.
How to Protect Against Financial Elder Abuse
There are two people who can protect an elder from financial elder abuse. The elder is always the first line of defense. However, since many elders suffer from certain ailments that affect their cognitive abilities, criminals are more likely to prey on them than an elder who is well aware of their financial status.
The second person who can help protect elders are the family, friends, and acquaintances of the elder. They become especially important if the elder is in a position to be a target for abuse, such as an elder with significant savings and dementia.
Tips for Elders
Those at risk of being a victim themselves should do everything they can to protect themselves, especially if they do not have a support system to help watch their back. Some of the most important steps you can take are to lock all important documents somewhere safe, pay electronically or with checks in order to create a paper trail, build relationships with people and do research before engaging in any business, and trust your instincts.
Some other steps you can take if you are concerned about being a potential target are to not broadcast what you possess, check credit reports at least once a year, shred all important paperwork, and plan ahead with your bank and lawyer to make sure your wishes are carried out. Involving two separate people is always an added layer of security as they will be reviewing the other and will notice any odd adjustments to your will, accounts, etc.
Tips for Friends, Family, and Acquaintances
The second line of defense for elders is the ones closest to them. In many cases, that could be a business acquaintance such as a banker or lawyer. Although the signs may be more subtle if you are viewing them from an outside perspective, there are steps you can take to avoid them happening altogether and in some cases, help protect those who cannot financially protect themselves.
You should always be wary of new people in the elder's life, especially those who seem abnormally close to the elder. Any change in the elder's financial stability, such as a sudden inability to pay rent or car payments, should be an immediate red flag. If you can, try to review the bank and credit card statements with the elder. You don't need to know all the information, and sometimes even reviewing statements or credit reports can help the elder notice something is off.
Watch for unexplained mood changes in the elder, especially depression and anxiety. The elder can also appear confused, or if they are not able to make sense of something. If you feel something is "off," it is always worth investigating.
If you manage their mail and notice that bank and credit card statements suddenly stop arriving at the address, that is a warning sign that they have been redirected to someone else. Make sure there are no signatures of pieces of identification lying around if the elder ever has visitors.
Where to Find Help
Resources for those who think they are being exploited include a service from the U.S. Administration on Aging called the Eldercare Locator, which can be reached online or by calling 800-677-1116. In addition, most states have some sort of adult protective services agency.
To report cases or suspected cases of elder abuse, contact the National Adult Protective Services Association (NAPSA) or your local law enforcement for guidance.
All states have long-term care ombudsmen who advocate for residents of nursing homes and assisted-living facilities. Many have experience dealing with financial elder abuse. Individuals in these facilities can go to the National Consumer Voice for Quality Long-Term Care to find an ombudsman.
In addition, the Consumer Financial Protection Bureau (CFPB) has resource guides that can help older adults and those assisting them to avoid abuse. Finally, it’s not unheard of to simply call or go to a local police station and ask for help.
What Are Examples of Financial Abuse of the Elderly?
Some common examples of financial elder abuse are signing over checks, forging signatures, receiving payment for services never rendered, using an elder's credit card, or taking out loans in their name.
How Do You Prove Elderly Financial Abuse?
Proving financial elder abuse ends with the bank and police, but you can build a case yourself by collecting all evidence possible. This could be bank statements, credit reports, etc. Once you have everything you need to convince the police, contact them and bring the evidence. If you are unsure how to begin this process, scroll up to the "important" highlight and use the link to contact your state's protective services authority for guidance.
Who Is Most Likely to Financially Exploit an Elder?
Almost anyone can be in a position to financially exploit an elder, but it tends to be people who are close enough to the elder to know they can be taken advantage of. This could be a lawyer who is close to the elder who sees an opportunity, a child who has access to financial accounts, or a career criminal who preys on those who are vulnerable and has their own method of determining who can be taken advantage of. There are some who send out large amounts of scams specifically targeting elders, and may not know a single one of their intended victims personally.
What Is the Punishment for Financial Abuse of the Elderly?
The punishment for financial abuse of the elderly varies, but in almost all cases it is a felony and will be prosecuted as such. Like any civil or criminal case, so much is dependent on the law and what is able to be proven. In most cases, it is worthwhile to work with a financial abuse attorney who has experience dealing with financial abuse of the elderly.
The Bottom Line
Financial abuse of the elderly is, unfortunately, something that happens all too often, and usually by a family member or close acquaintance. There are steps that both the elder and those close to them can take in order to prevent such an act from occurring; however, those committing the financial abuse will often be aware of who is close to the elder and will do whatever they can to not get caught. Elder financial abuse is an emotional event and both law enforcement and your state's protective services should be contacted if there are any signs of abuse.