As we age, it’s important to be aware of the potential risks and vulnerabilities we face. One such risk is elder financial abuse, which refers to the exploitation of older adults for financial gain. This form of abuse can be difficult to detect and often goes unreported, yet related theft and scams have devastating consequences, both emotionally and financially.
The Financial Crimes Enforcement Network (FinCEN) recently shared insights about patterns and trends involving elder financial exploitation, reporting that the average loss for a victim of this type of exploitation is $34,200, adding up to $28.3 billion annually. Considering that many such victims are past retirement and rely on a fixed income, recovering from such a loss can seem nearly impossible.
Even if you yourself are not yet an “elder,” it remains critical to understand the signs of elder financial abuse and take proactive measures to protect your loved ones.
Recognizing the Signs
A recent example shared in The Sun Times News helps illustrate the realities of elder financial exploitation:
“Last year, Betsy and two sisters discovered that their youngest sister, Joan, was using their 93-year-old mother’s savings as her personal bank account, siphoning off what might be more than $230,000—at their best estimation. And then they learned that Joan had convinced their mother, who has mild dementia, to sign a new will that removed Betsy’s power of attorney and made Joan sole medical and legal power of attorney, as well as sole heir. . .
“’Meanwhile, Joan has sold Mom’s condo and has $400,000 more to embezzle,’ Betsy says. ‘The three of us are powerless. We’re not worried about any inheritance. We’re worried Mom won’t have enough money to live on.‘”
Elder financial abuse can take various forms, such as theft, fraud, scams, or undue influence. Perpetrators of elder financial abuse can be family members, caregivers, or even strangers who exploit the vulnerability of older adults. These signs may indicate that an elderly individual is being taken advantage of financially:
- Unexplained financial transactions or discrepancies
- Sudden changes in wills, trusts, or power of attorney
- Isolation or restricted access to the victim
- Unpaid bills despite having sufficient funds
- Unusual or excessive gifts to caregivers or new acquaintances
By remaining vigilant, we can better identify and intervene before elder financial abuse can take too much of a toll. Be sure to take appropriate action upon noticing one or more of these common signs.
3 Ways to Help Avoid or Stop Elder Financial Abuse
Preventing elder financial abuse requires a collective effort from individuals, families, communities, and financial institutions. Here are some safety precautions that can be taken to protect yourself and others in vulnerable positions:
1. Consult the Experts
Never rush into a financial decision. If you aren’t sure whether a choice is right for you, consult with a financial advisor or attorney before signing any document you don’t understand. Additionally, make an effort to get to know your banker and anyone else who manages your finances, because they can help keep an eye out for suspicious activity.
Also, talk to someone at your financial institution, an attorney, or a financial advisor about the best options for safeguarding your assets and ensuring your wishes are followed. After that, choose a trustworthy friend or family member to act as your agent in all estate-planning matters. Be sure they have the information they need to follow your financial plan.
2. Protect Your Personal Information
One of the most important precautions you can take against elder financial abuse is keeping your personal information private. Never leave personal documents out where visitors may find them. Lock up your checkbook, account statements, and other sensitive information when others will be in your home. If you use mobile banking, you may also be able to set up alerts within your banking app to be notified of changes to your account.
Do not give personal information, including your Social Security Number, account number, or other financial details to anyone over the phone. Scammers will often promise a financial reward in exchange for your banking information. Other times, you may receive faulty calls from fraudsters pretending to be bank representatives. Remember that your bank and other financial institutions will never initiate a phone call to ask you for that information.
Choose a trustworthy friend or family member to act as your agent in all estate-planning matters. Be sure only they have the information they need to follow your financial plan.
3. Educate Yourself and Those Around You
Open communication is often a significant first line of defense, especially as elder-targeted scams and threats evolve. Be clear about your wishes when it comes to your finances and end-of-life decisions, and be proactive in supporting the elders in your life. Don’t hesitate to ask questions and engage in opportunities to learn more about information security, specifically around topics of elder abuse. Be sure, too, to make use of fraud monitoring services that can help you stay on top of your transactions and statements.
Final Considerations
The realities of aging may feel taboo to discuss, but shying away from these tough conversations can do more harm than good. According to U.S. census projections, 20% of all Americans will have reached retirement age by 2030, including all “baby boomers.” Considering this rising demographic and the evolving nature of multi-generational living, the average person is more likely to take care of an older loved one than ever before.
You can begin taking simple steps right away to help protect yourself and your loved ones from elder financial abuse. Planning ahead, safeguarding personal information and working with trusted financial experts on important monetary decisions are all great ways to responsibly manage finances during a vulnerable stage of life. Be sure to familiarize yourself with the courses of action you can take if you believe you or someone you know may be a victim of elder abuse.
What Should I Do if I’m a Victim of Elder Financial Abuse?
You have the right to protect yourself against threats and intimidation. If you think someone close to you is trying to take control of your finances, here are a few actions you can take to protect yourself:
- Talk to a trusted family member who has your best interests at heart, or to your clergy.
- Talk to your attorney, doctor, or an officer at your bank.
- Call Tennessee’s Adult Protective Services unit at 888-277-8366 or contact your local police.
