As a caregiver or caretaker of an elderly loved one, you need to be on guard against financial abuse. You may think financial abuse is a long shot, but unfortunately, it is the most prevalent kind of elder abuse. Worse, in almost all cases, the perpetrator is someone the victim trusts.
Perpetrators can be family members, neighbors, caregivers, attorneys or financial advisors. Many times, the offender may desperately need cash due to personal problems such as substance abuse, alcoholism or gambling. Less often, perpetrators are con artists who pose as caretakers until they have earned the trust of the senior. Once the victim has grown dependent upon their care, the con artist exploits the senior for their benefit.
Because the relationship between abuser and victim is often a close one, most instances go unreported. According to the National Adult Protective Services Association, just one out of every 44 cases gets reported to authorities.
Examples of Financial Abuse
Elder financial abuse encompasses a wide range of situations in which a senior’s financial resources are exploited for the benefit of the perpetrator. Here are some common examples:
- Stealing money or property, either directly or through the misuse of a joint bank account
- Abusing power-of-attorney privileges, such as persuading a senior to sign over financial control against their best interests
- Offering care and companionship in exchange for money, and then abandoning the senior upon payment
- Pressuring a senior to agree to an ill-advised loan without intending to pay it back
- Threatening to neglect the senior’s needs unless exorbitant sums of money are paid
- Refusing medical treatment that the senior needs so that the perpetrator can use the money instead
- Forging the senior’s signature on a contract or other financial document
- Offering investment schemes in which unrealistic claims are made to the senior (e.g., pyramid schemes)
Who’s Vulnerable and What to Look For
According to The Metlife Study of Elder Financial Abuse, most victims are over 80 years old, live alone and need home or health care assistance. Women are twice as susceptible to predation as men. Although all seniors and their caretakers should be concerned about financial exploitation, some people are particularly vulnerable to becoming victims:
- Those who are cognitively or physically impaired
- Those who depend on others for their day-to-day needs
- Those who are financially naïve or ignorant about their personal finances
- Those who are lonely or socially isolated
- Those who have recently lost a portion of their retirement savings
To protect your loved one, be alert for red flags that can signal financial abuse, such as the following:
- Unexplained transactions on bank statements
- Missing money, possessions or financial documents
- Bills and statements that are no longer mailed to their residence
- A family member, caretaker or other professional who starts behaving suspiciously about finances
- Contracts or financial arrangements that your loved one agreed to but did not understand
By watching for suspicious activity and taking action as soon as you notice a problem, you have a better chance of mitigating any damage. Consider contacting the Administration on Aging, the federal agency responsible for protecting the safety and rights of seniors and their caregivers. This agency has representatives in every county in the U.S. and can send a social worker to investigate. Alternatively, you might get in touch with Adult Protective Services, local law enforcement or your loved one’s financial institution. The advice of an attorney can be extremely helpful.
Protecting Against Elder Financial Abuse
When it comes to protecting your loved one against financial abuse, it is important to trust your instincts. However, you can also take the following practical steps to safeguard their well-being:
- Monitor joint accounts: Keep tabs on joint accounts to make sure funds are not misappropriated.
- Maintain financial records: Document your loved one’s financial dealings. Do not pay a bill, lend money or sign a financial document on their behalf without recording the details.
- Keep an eye on finances: Ignorance of assets and investments could mean overlooking a potential victimizer.
- Safeguard financial information: By protecting sensitive financial documentation, you can make it much harder for a perpetrator to gain access.
- Learn about your senior relative’s finances: Ask questions if there is something you do not understand about a financial dealing. Family members can hold monthly meetings to go over the finances together as a “checks and balances” measure.
- Set up an enduring power of attorney: If your loved one is unable to manage their finances, giving over authority to someone you both trust could help protect their money. The person you select would then pay bills and handle other financial matters on your senior relative’s behalf.
For Additional Information
To learn more about elder financial abuse and how to protect against it, refer to the following resources: