It seems that every few months, the media reports a case about an elderly person who was bilked out of his or her savings, investments, or home by an unscrupulous caretaker, family member, or garden-variety con artist. In fact, the American Psychological Association claims that there are at least four million cases of elder abuse and neglect each year, with as many as 23 unreported cases for every case that comes to the attention of the authorities.
Preventing and addressing financial elder abuse is a major concern, and one that is only going to grow as the population ages.
What Is Elder Financial Abuse?
Financial abuse is the theft or mismanagement of an elderly person’s funds, real estate, investments, or personal property. Like all abusers, financial elder abusers perceive the elderly as vulnerable and unlikely to fight back or expose the abuse. Financial abuse can be a one-time incident or it can continue for many years.
Types of Financial Abuse
Not all financial abusers use the same techniques to take money from their victims. Here are some of the ways that financial abusers exploit the elderly:
- Coercion Through Neglect and Violence. Some financial abusers coerce the elderly into turning over money and property through violence or threats of violence. Caretakers of severely disabled elders may withhold food or other basic care until the elderly individual turns over their assets.
- Draining Joint Accounts. Some older individuals hold joint savings, checking, or credit card accounts with their children, grandchildren, or other family members. This makes it easy for abusers to withdraw money for their own use without the approval of the joint account holder.
- Frequent Demands for Money. Family members, neighbors, or even romantic partners and spouses take advantage of an older person’s willingness to lend or provide funds, particularly if the elderly individual has memory loss.
- Theft of Property. Abusers sometimes steal an elder’s property, buying an item from the elder at a price far below the item’s market value, or “borrowing” something and never returning it.
- Mismanagement of Assets. Some elders appoint a friend, family member, or lawyer to manage their funds through power of attorney. Unscrupulous people use power of attorney to rob the elder of his or her funds and property.
- Investment Schemes. Abusers might persuade the elderly to funnel money into high-risk investments or business deals. While there is nothing wrong with an elder making legitimate investments, deals recommended by an abuser are often dangerous to an elderly person’s financial security.
- Street and Internet Scams. Con artists often target the elderly, and elders who use the Internet may be particularly vulnerable to common online scams, largely because they are unfamiliar with how the Internet works. One common Internet con game is the Nigerian 419 scam, in which someone emails the elder (or contacts them on Facebook) about an inheritance or a large amount of money that the elder can help bring into the United States. The scammer asks the victim for his or her bank account information with the promise to deposit funds into it. Of course, the reverse happens and the scammer ends up draining the account, leaving the victim with nothing.
- Identity Theft. Abusers may use the victim’s credit history to take out loans or obtain credit. Other forms of identity theft involve using the victim’s identity to obtain medical care, or as an alias when committing additional crimes.
- Real Estate Fraud. Methods vary, but may include tricking an elderly person into signing over the deed to their home, encouraging an elderly person to take out an unnecessary mortgage at a high interest rate, or filing a forged deed with the county recorder’s office.
- Bequests and Life Insurance. Financial abusers with patience may persuade an elder to make the abuser an heir or name the abuser as a life insurance beneficiary.
- Lodgers and Roommates. Some elderly people agree to allow a friend or family member to stay with them in exchange for rent or caretaking duties. These arrangements often work well for both parties, but sometimes the lodger doesn’t meet his or her obligations under the arrangement.
Some types of financial abuse don’t neatly fit these descriptions, so you have to rely on your instinct and the evidence you uncover to determine whether the elder has been victimized.
Who Commits Financial Elder Abuse?
Like most people who exploit or abuse others, elder abusers frequently develop close relationships to their victims and use these trusting friendships to gain access to the victim’s assets. Common abusers include:
- Family Members. Many of those who commit financial elder abuse are close family members, including children and spouses. Family members may commit financial abuse out of a sense of entitlement – they feel that because they are already the elder’s heirs, or because they’ve provided caretaking services without financial compensation, it’s okay to help themselves to the elder’s funds and property.
- Caretakers. A home health or nursing home worker (including owners and management) may persuade a client to give him or her money. Caretakers may also steal valuables from the client’s home or room.
- Neighbors. Neighbors sometimes have the opportunity to steal from the elderly, particularly if they frequently perform chores for them and, like family caretakers, feel entitled to compensation.
- Professionals. Unscrupulous lawyers, bankers, financial advisors, and other professionals find ways to cheat the elderly by engaging in deceptive billing practices or by embezzling funds.
- Con Artists. A professional con artist may become “friends” with the elderly person, begin a romantic relationship with their target, or persuade the target to invest in nonexistent businesses or stocks.
Nobody is above suspicion when it comes to abuse and exploitation. While paranoia is unhealthy, so is being too trusting. Both elders and those who care about them need to be wary of who they trust.
What Are the Signs of Financial Elder Abuse?
Identifying financial elder abuse can be difficult, particularly if you don’t know what you’re looking for. Identifying the signs of abuse is also challenging if the abuser is someone you know and trust, as you may not want to believe that he or she is capable of such behavior.
Here are some common signs of financial elder abuse:
- Money Missing From Accounts. Are large amounts of money missing from the elder’s investment or bank accounts? If so, it’s important to find out where the money went.
- Unusual Use of Credit Cards. If an elder is suddenly using his or her credit cards more frequently (or if he or she is taking out cash advances), financial abuse or financial difficulties may be taking place. Also, be on the lookout for changes to the “authorized user” list for credit cards and other accounts. If an abuser has his or her name added as an authorized user to an elder’s credit card, he or she typically can’t be held responsible for paying off the balance, ultimately pushing the elder into debt.
- Unpaid Bills, Collection Letters, Lack of Food in House. If a financially responsible person appears to not be paying bills or isn’t buying food or other necessities, it’s time to investigate. Mismanaging money or neglecting self-care can be signs of abuse, illness, or dementia.
- Missing Possessions. If you notice that an elder’s belongings seem to be missing, ask where the items went. Alternatively, if the elder lives with a caretaker and you start seeing a lot of new items around the house, and they aren’t things that the elder would normally use, ask where they came from. They may belong to the caretaker, but you want to make sure that the elder isn’t paying for them.
- Sudden Changes in an Elder’s Mood or Demeanor. Unusual and sudden sadness, nervousness, or anxiety are all potential signs of abuse. Other things to look for include changes in spending patterns and socializing habits. Ask yourself if the elder is turning down opportunities to go out with family or friends, or if he or she seems hesitant to make normal purchases, such as clothing, food, or holiday gifts. This behavior indicates that the elder might be in financial distress.
Stay in contact with other people in the elder’s support network, and don’t be afraid to follow up on reports of behavioral changes or remarks that might indicate a financial predicament.
What You Can Do
If you believe that an elderly person is the victim of financial elder abuse, take action. Here are several ways you can help:
- Call Emergency Services. If you suspect that an elderly person is in immediate danger (physical abuse or physical or medical neglect), call emergency services (911 in most of the United States) to report your suspicions.
- Call Protective Services. If the victim is living alone or in a non-institutional setting, call your state’s Adult Protective Services agency or the Eldercare Locator hotline at 1-800-677-1116. Adult Protective Services agencies coordinate efforts between social services, law enforcement, and other agencies to investigate the allegation. Each area’s Adult Protective Services agency has its own scope of practice and qualification standards. Age qualifications vary by agency, though some may provide services to disabled individuals of any age. Call your local agency to learn more about its standards.
- Contact the Nursing Home Ombudsman. If the victim is in a nursing home and being exploited by staff or other residents, call Adult Protective Services and ask for help. You should also contact the state’s nursing home ombudsman to report your suspicions.
- Create an FTC Identity Theft Report. If you suspect identity theft, create an FTC identity theft report. After creating the FTC report, take it to local law enforcement and file a police report. After filing the initial reports, contact credit card companies and the credit bureaus to report the identity theft.
- Contact Financial Institutions. Contact the elder’s financial institutions and express your concerns. Their fraud teams will work to help identify abuse.
While reporting abuse may feel like an intimidating process, Adult Protective Services in your area can help walk you through the process. If you suspect abuse, contact them for help as soon as possible.
How to Prevent Financial Elder Abuse
As Ben Franklin said, “An ounce of prevention is worth a pound of cure.” Preventing abuse is always better than helping victims recover from it, and while abusers can be wily and hard to spot, your presence and willingness to investigate red flags can prevent a loved one from becoming a victim.
Here are some things you can do to protect the elderly from abuse:
- Keep in Contact. Stay in touch with elderly family members and friends, particularly those who live far away from immediate relatives. Regular contact gives you a good understanding of what an elder’s behavior and mood are normally like, making it easier for you to notice changes that suggest abuse or illness. Also, abusers may avoid elders who clearly have a strong family and social network.
- Get to Know Your Elderly Neighbors. Even if your older neighbors have family and friends close by, you may be in a better position to take note of unfamiliar visitors, missing possessions, or other signs of abuse. Introduce yourself to your neighbors’ children or close relatives, and invite them to call you in case they have any concerns.
- Get to Know Your Elderly Relatives’ Friends and Neighbors. Knowing the people your parents or relatives associate with has two benefits: First, you’ll have extra eyes and ears watching out for potential abuse, and second, it puts friends and neighbors who are potential abusers on notice that your parents or relatives have people in their lives who are looking out for them.
- Get Professional Help. Lawyers can work with elders and their families to establish trusts and other high-accountability financial arrangements that discourage financial abuse. If there are tensions in the family regarding finances, ask your lawyer to recommend a mediator or counselor who can work with the family to protect the elder’s interests while also addressing the concerns of individual family members.
Being proactive about staying in touch, addressing financial issues, and seeking out third-party financial assistance can all go a long way toward preventing elder abuse.
Reasons People Don’t Report Financial Elder Abuse
Many people who suspect elder abuse don’t report it. Their reasons are varied, but often boil down to one or more of the following:
- Confusion. It’s often difficult to identify abuse, particularly if the elder is unable or unwilling to answer questions about what is going on. Keep in mind that it’s not your responsibility to judge whether abuse is taking place – you only need to report it. The authorities have the training to investigate and address abuse allegations. If something doesn’t seem right, call Adult Protective Services and express your concerns.
- Discomfort. It’s understandable that you might not want to question an elder’s financial decisions, particularly if they’ve always managed their finances appropriately in the past. But it’s better to have an uncomfortable confrontation with an elder over suspected abuse than to allow it to continue because you’re concerned about the elder’s sensibilities.
- Loyalty. If the abuser is a family member, close friend, or trusted caregiver, turning them in can be a painful decision, particularly if you know that the elder is very attached to the abuser. Just remember that you are not the person who created this situation. The fault lies with the abuser, and he or she may not stop unless you intervene. Your primary loyalty should be to the vulnerable elder, not the abuser.
- Fear. Some abusers continue to operate because they threaten those who might expose them. If you fear the abuser, you may be able to report your suspicions to Adult Protective Services anonymously. If you are eligible for Adult Protective Services assistance yourself due to age or disability, you can ask that a case be opened on your behalf. If you’ve received threats, always report them to the police.
Remember: Without your involvement, the abuse will continue.
It’s important for relatives, neighbors, and community members to look after society’s most vulnerable. Abusers are less likely to target elders who have a network of family and friends looking out for them. Keep your eyes open and trust your gut - your willingness to get involved could stop an elderly person’s abuse, while also preventing an abuser from harming other victims.
Have you ever suspected that an older family member or neighbor was the victim of financial abuse? How did you handle the situation?