Avoiding Elder Financial Abuse

The media often depicts elder financial abuse as obvious and sudden. You may have seen stories about scam artists stealing seniors’ identities or tricking them into giving away their life savings. Or maybe you’ve heard about greedy family members tricking elderly relatives into leaving them everything in their wills—often to the horror of the rest of the family. 

However, elderly financial abuse is more common and often subtler than you may realize. This term refers to the improper or unauthorized use of an older adult’s assets and property. It encompasses everything from giving bad financial advice to outright theft. 

According to the AARP BankSafe Initiative, Americans over 60 lose $28.3 billion annually due to financial exploitation. Despite popular perceptions, 72% of this money gets stolen by people who know the victims personally, not strangers. These thieves often get away with their crimes because only 12.5% of victims report known perpetrators. 

Recognizing the warning signs of elder financial abuse can help you protect yourself or your loved ones. This guide also covers prevention tips, resources, and more.

Examples of Elder Financial Abuse

According to the Consumer Financial Protection Bureau, financial abuse occurs “when someone takes or misuses another person’s money or property for the benefit of someone other than that person.” Seniors are more vulnerable to this exploitation because they often rely on others for financial assistance and other types of support. They may also have cognitive disorders that make it challenging to recognize that a caregiver or stranger is taking advantage of them. 

Here are three common types of elderly financial abuse. 

Controlling Access To Money 

This form of abuse occurs when a caregiver restricts an older adult’s access to their finances. A family member may take away a senior’s credit card and prevent them from accessing their bank account. They might also conceal the victim’s financial status and make economic decisions without consent. 

Sometimes, a family member or friend may legitimately need to take charge of their loved one’s finances. For instance, a senior with memory problems may spend hundreds of dollars buying unnecessary items or fall victim to fraud. In these cases, the caregiver can ask the senior to give them powers of attorney (POA) so they can legally make financial decisions on their behalf. 

Identity Theft 

The Federal Bureau of Investigation reports that Americans over 60 lost $42.6 million due to identity theft in 2022. Identity theft occurs when someone steals a victim’s personal information and uses it for their own gain. For instance, a thief could open credit cards under a senior’s name and rack up thousands in debt. 

Criminals use many strategies to steal seniors’ data. They often use fraudulent emails or phone calls to trick people into providing personal information like birth dates and Social Security numbers. They also hack into company databases, skim credit cards, and steal mail. 

Home Improvement Scams 

Picture this: A friendly contractor knocks on your door and says your fence looks old and broken. He offers to replace it and asks for payment upfront to buy supplies. You’ve been planning to fix the fence, so you agree and hand over the money. But to your surprise, the contractor never returns, and his supposed construction business doesn’t exist. 

Elderly homeowners often fall victim to home improvement scams like this. Con artists may pose as contractors to get money without completing the promised work or charge exorbitant fees for shoddy repairs. 

Warning Signs of Elder Financial Abuse

It can be challenging to spot the signs of elderly financial abuse. Criminals often manipulate victims and try to cover their tracks. That’s why it’s essential to be vigilant for signs of exploitation. 

Seniors and their loved ones often notice financial warning signs first. Keep an eye out for these red flags: 

• Cash or family heirlooms disappearing from the house 
• Mysterious credit card charges 
• Large sums of money getting withdrawn from bank accounts or transferred to another person
• Forged signatures on wills, checks, and legal documents 
• Unpaid bills
• Wills rewritten without explanation 
• Co-signed loans without the senior’s consent or knowledge  

The financial exploitation of elderly people can also cause behavioral changes, such as: 

• Anxiety. Seniors who experience financial abuse may feel afraid or nervous. They may worry about their economic situation or become distressed when their loved ones mention money. 
• Sudden frugality. Older adults who have lost control of their finances or had money stolen may become reluctant to spend their remaining funds. They might stop buying basic necessities like food and clothing or get upset when they need to make small purchases. 
• Lack of financial knowledge. Victims of financial abuse may not know the login information to their accounts or feel unsure about how much money they have. They might also not be able to explain sudden changes in their finances. 
• Loss of independence. Seniors might become overly dependent on other people for financial matters. For instance, they may let a new romantic partner make every economic decision. 
• Social withdrawal. Financial abuse can cause people to lose trust in others and isolate themselves to avoid further exploitation. Victims could stop attending social events and distance themselves from family members. 
• Unexpected gifts. Older adults may get pressured into giving large financial gifts. For instance, someone might get coerced into buying their distant nephew a house or signing over their car. 

Preventing Elder Financial Abuse

Elderly financial abuse is a serious but often avoidable issue. These strategies can help you safeguard yourself or your loved ones from exploitation. 

Start by educating yourself about common types of financial abuse and ways to avoid them. Shred documents that contain personal data, and never share confidential information with strangers. You should also avoid disclosing information over the phone unless you’ve initiated the call because scammers often impersonate family members and bank representatives. 

Open communication is another way to reduce the risk of financial abuse. Consider asking a trusted family member to help you monitor your bank accounts and credit reports for suspicious activity. It’s also helpful to get advice before making a big financial decision. For example, a family member could help you realize that a shady sales representative is trying to scam you before you give them money.

It’s also essential to develop a strong support network. Friends and family who play an active role in your life can help you spot the signs of financial abuse early. For instance, they might warn you that your new partner has too much control over your money or point out that your jewelry has gone missing after a family gathering. Often, it can be hard to see these red flags by yourself, especially if you care about the person who has exploited you. 

Additionally, legal protections can shield you from financial abuse. A lawyer can help you set up a financial POA. This document allows you to give a trusted caregiver control over your finances. A POA can come in handy if you want to prevent an abusive person from accessing your funds or if you’re afraid you’ll fall for scams. 

Finally, remember to trust your instincts. Don’t hesitate to step back if you feel like someone is trying to trick or take advantage of you. 

Resources for Victims of Elder Financial Abuse

Even the most cautious and financially savvy people can get exploited. Fortunately, there are many resources for victims of elderly financial abuse. 

There are several options to report suspected abuse. The National Adult Protective Services Association can help you locate your state’s Adult Protective Services. These organizations investigate reports of abuse, neglect, and other forms of mistreatment. They often conduct home visits and provide services for vulnerable adults. 

You can also contact law enforcement if you suspect a crime has been committed. The police will investigate identity theft, embezzlement, and other illegal actions. They can also take legal action to help victims get justice. 

Additionally, the Consumer Financial Protection Bureau offers many resources for financial abuse victims. This website can help you find free legal services, mediators to solve family disputes, and other resources. 

People who experience financial abuse may also benefit from recovery and support services. The Allstate Foundation Moving Ahead Curriculum is a free program that helps survivors regain financial independence and security. Local nonprofit organizations may also offer in-person financial workshops and support groups. 

Safeguard Your Financial Future

People often assume that strangers are the biggest threat to a senior’s financial security. While unknown scammers prey on older people, the danger is usually much closer to home. Many older adults get financially abused by their family, friends, and professional caregivers. 

Financial planning can help you keep track of your money and avoid exploitation. Creating a budget and monitoring your accounts regularly for discrepancies is crucial. You should also set clear boundaries to prevent your loved ones from interfering with your finances. 

Joining a Senior Resource Group retirement community can also help you safeguard your finances. Our lively communities have full calendars of social events so that you can expand your network. We’ll also connect you with resources to help you manage your finances. Contact us today to discover how to enjoy a healthier, safer, more fulfilling life.