Preventing Financial Elder Abuse

Preventing Financial Elder Abuse

Introduction

While it’s extremely unpleasant to think about, the truth is that financial elder abuse happens, and if you aren’t careful you or someone you know could end up a victim.

The perpetrators, who often have a close personal relationship with the victim, don’t care that someone is older and maybe not quite as sharp as they used to be. They don’t care if the person they are targeting will face extreme financial hardship as a result. All that they care about is the fact that someone has some financial resources at their disposal and appears to be an easy target.

Criminals look for so-called soft targets, and the sad fact is that targeting older people is a proven way for them to take advantage of an easy victim. This is the unfortunate reality that we face. Financial elder abuse is a serious problem. Elderly Americans lose billions of dollars each year to crimes such as:

  • money taken from bank and other financial accounts without permission
  • unauthorized use of credit cards
  • changing of wills without permission

The consequences of these crimes are often devastating, both financially and emotionally. The problem is also massively underreported. Studies have found that around 96% of elder abuse is not reported to the proper authorities; for financial abuse, nearly 98% of crimes against elders go unreported.

We’ve put together this guide to help you prevent and stop existing abuse. Below, we will cover:

  1. What is financial elder abuse?
  2. How widespread is the problem?
  3. What can you do to prevent and stop it?

Our goal is to help you identify and stop financial elder abuse before it starts. In cases where that is not possible, we’ll help you figure out what to do about it.

What is Financial Elder Abuse?

We know that most victims of elder financial abuse will not report the crimes committed against them. In addition, these crimes are not always easy to spot. Let’s discuss what this abuse looks like, the potential perpetrators, and a few examples.

Hands on Banking, an online learning center created by Wells Fargo, identified six of the most common forms that financial elder abuse takes:

j

Common Financial Abuse

  1. Undue influence
  2. Theft
  3. Extortion
  4. Misuse of authority
  5. Mail or telephone fraud
  6. Service fraud

Financial Exploitation: Improper use of an older adult’s funds, property or resources by another individual, including but not limited to, fraud, false pretense, embezzlement, conspiracy, forgery, falsifying records, coerced property transfers ordenial of access to assets.

- New York State Elder Abuse Prevalence Study

Who Commits Financial Elder Abuse?

There are two types of elder financial abuse, and both are far more common than you might believe. The first type of elder financial abuse occurs when a family member or close friend assumes legal control of someone’s finances and then uses that control for their benefit. The second type of elder financial abuse occurs when a person or company targets an elderly person in order to exploit them and obtain a financial benefit.

Recent studies indicate that around half of news stories focus on financial misdeeds committed by strangers. However, the victim is far more likely to know the perpetrator. A 2014 study in the Journal of General Internal Medicine Found the following results:

Even if we assume that every case in the “unknown” and “other non-relative” categories is a crime committed by a stranger to the victim, this accounts for only 10% of elder financial abuse. Perpetrators are much more likely to be:

  • Related to the victim; spouses and grown up children are most common.
  • Financially or emotionally dependent on an elder.
  • Male (60% of perpetrators) with a drug or alcohol problem and a history of run ins with law enforcement.
  • Suffering from significant health problems, either physical or mental.
  • Going through financial issues or other significant stresses.
  • Depressed and/or lacking social support.

On the other side of these crimes, women are more likely to be victimized than men. Most of the victims are between 80 and 89 years of age and require significant assistance, either with health care, maintaining their homes, or both.

Two Categories of Perpetrators

How does elder financial abuse by a family member or friend happen? It happens when a family member or friend uses one of many different approaches to take advantage of an elder. Some common examples include borrowing money from an elder then never repaying them, using an elder’s property without their knowledge, or taking money from them without permission. Some perpetrators forge an elderly person’s signature on documents or get them to sign documents that they don’t fully understand. This is often done in regards to a will where someone that an elderly person trusts will trick them into listing them as the sole inheritor of their estate.

Elder financial abuse by a family member or trusted friend is typically the most financially and emotionally harmful to victims. Imagine how you would feel if someone you trusted began to exploit your trust in them in order to gain access to money that you worked your entire life to earn and save. Now imagine that you may depend on this person in your day to day life.

How does elder financial abuse from an outside party work? It typically takes the form of a person or company deliberately targeting an elderly person that is not quite as sharp as they once were. They often present the elder with scams of some sort intended to bilk them out of their money. Common examples of this include presenting an elderly person with a bill for something that doesn’t exist or insisting that they owe taxes on property and that they could lose the property if they don’t pay those taxes.

One of the most common schemes that are used is the lottery or sweepstakes scam. In this scam, an elderly person is told that they have won a prize, but they now have to pay the taxes on it or some other type of fee. Elderly people are also more likely to be charged for things that they shouldn’t be like additional repairs that weren’t needed, or for a service they could have done without. Identity theft is another common crime; since many elderly people aren’t as quick to react to it, criminals are able to reap more of a financial gain since their illicit activity is allowed to continue for a longer period of time.

One Specific Case

Financial elder abuse can take many forms. In a recent press release, the Consumer Financial Protection Bureau reports a crime that paints an all too common picture. In Georgia, a caregiver stole nearly half a million dollars from the 80 year old man with dementia for whom she worked. The caregiver and her husband took advantage of his illness and their position of trust to commit their fraud. Since the elder suffers from dementia, the perpetrators were able to carry on this crime for a long time.

The Consequences

Sadly, many elderly people suffer very serious ramifications due to others taking advantage of them. There have been many cases where elders have lost everything, including their homes, as a result of financial abuse. What makes this particularly devastating is the fact that elderly people often no longer have the ability to work at a job, so once they lose everything, they have no means of recovering. This leads to financial instability, as well as emotional distress.

How Common is Financial Elder Abuse?

Estimates vary on how often financial elder abuse occurs. This is largely due to the fact that these crimes go unreported the vast majority of the time. The 2014 study we mentioned above estimates that 2.7% of seniors are victims of financial exploitation each year, and 4.7% will be victimized as some point in their lives. Other studies estimate that 10% of those over 60 have been victims of some form of financial abuse.

In 2011, New York State conducted an Elder Abuse Prevalence Study in which over 4,000 seniors were surveryed. According to the study:

“The highest rate of mistreatment occurred for major financial exploitation (theft of money or property, using items without permission, impersonation to get access, forcing or misleading to getitems such as money, bank cards, accounts, power of attorney) with a rate of 41 per 1,000 surveyed. This rate reflects respondent reports of financial abuse that occured in the year preceding the survey. (The rate for moderate financial exploitation, i.e. discontinuing contributions to household financesin spite of agreement to do so, constituted another 1 per 1,000 surveyed.)”

- New York State Elder Abuse Prevalence Study

This implies that around 4.1% of elders are victims of financial exploitation each year, nearly double the estimates seen in most studies. Why the difference? The New York State study used self reported data instead of relying on crimes that are brought to the attention of the authorities. When the study looked only at documented cases of abuse, the rate was less than 1%. To give you an idea of how many of these crimes go unreported, we’ve created a chart comparing documented vs self-reported cases of financial exploitation in the NY State study.

How Can You Prevent Elder Abuse?

Most victims of elder financial exploitation will not report it. It also may not be very easy to spot. Both of these facts are heavily influenced by the realities that most of these crimes are committed by someone very close to the victim and that many victims are suffering from diseases like dementia and are thus unable to detect the abuse. With that in mind, we have advice for how you can spot abuse happening to someone else, tips on how to prevent someone from committing financial abuse against you, and finally what to do to put an end to elder abuse that is already taking place.

Protecting Others

Here are a few warning signs that indicate someone you care about may be experiencing financial elder abuse:

  • Sudden changes in banking habits. Unexplained and large changes in account balances.

  • Unusual withdrawals from financial accounts.
  • Sudden transfers of assets to friends of family.
  • Money and possessions begin disappearing.
  • Unusual changes to wills and other legal or financial documents.
  • Someone new, particularly a friend of acquaintance, begins making importat decisions for an elder.

 There’s no substitute for keeping an open line of communication with and supporting your elderly loved ones. Many abusers take advantage of frayed relationships to better isolate and exploit their victim.

Protecting Yourself

If you are at the age where you are concerned you could become a victim of elder financial abuse, there are a number of steps you can take to reduce your vulnerability and chances of becoming a victim.

Keep an open line of communication with friends and family members. Never rely on only one person to make all of your financial decisions for you without having other responsible and trustworthy adults in your inner circle that can keep an eye out for anything that seems inappropriate. You should also speak to those closest to you on a regular basis regarding any significant financial decisions you are making. Asking people that are younger, and more up to date with the latest scams can help you to detect a scam and avoid it.

If you are watching your bank account and paying attention to your money, credit cards, pension checks, and other key accounts, you are less likely to become a victim. Knowledge is power, and knowing what is going on with your money will empower you.

Never respond to any solicitation for money of any kind over the phone, via mail, or over email without checking with people you trust. It’s possible that the request for funds is legitimate, but it’s far more likely that it is some type of scam that is being perpetrated against you.

When you are physically, mentally, and socially active your mind will remain shaper. When your mind is sharper it’s going to be harder for people to take advantage of you. Make regular exercise, even something as simple as evening walks, a regularity. Also, remain active and spend time with other people since the act of conversing with others, and doing activities with them, will stimulate your mind and help to keep you sharper as you get older.

Taking Action

If you detect abuse, take action and report it. Don’t assume that someone else has already done so. Don’t fall into the trap of telling yourself that it’s none of your business. Here are the American Psychological Association’s recommendations.

If you believe an elder you know is a victim of abuse

  • Call or visit the Eldercare Locator online. The phone number is (800) 677-1166, and the website is located at https://eldercare.acl.gov/.

  • Take extreme caution in confronting the abuser. Only do so if the victim gives you permission and you have the ability to move the victim to safety immediately.

If you are being abused

  • Contact your physician, who “has a legal obligation to report the abuser and help you find safety.”

  • Contact Adult Protective Services or the Eldercare Locator. You can find APS at https://www.napsa-now.org.

Resources

Understanding Elder Abuse, Centers for Disease Control

Elder Financial Abuse – Recognizing Fraud, Hands on Banking

Under the Radar: New York State Elder Abuse Prevalence Study, New York State

Elder Abuse and Neglect: In Search of Solutions, American Psychological Association

Elder Abuse: Statistics & Data, National Center on Elder Abuse

Financial Exploitation of Older Adults: A Population-Based Prevalence Study, Journal of General Internal Medicine