Financial Caregiving 101

How to Protect Parents from Financial Exploitation by Caregivers

Cameron Huddleston
Cameron Huddleston
January 23, 2023
How to Protect Parents from Financial Exploitation by Caregivers

After my mom was diagnosed with Alzheimer’s disease, I had to rely on paid caregivers to stay with her on weekdays while I worked. I trusted them to provide her with the care she needed. I also trusted them not to take advantage of her. 

My mom was fortunate that none of her caregivers—that I know of—exploited her financially. However, not all older adults who have to rely on care from others are so lucky.

Older adults lose more than $3 billion to financial exploitation annually, according to the federal government’s Financial Crimes Enforcement Network. Although scams by strangers might seem like the biggest threat, elder theft actually is more common—and the perpetrators often are those who are known to victims, according to FinCEN. In many cases, they are people who have been hired to care for aging adults.

Just because there is the potential for exploitation by caregivers does not mean you shouldn’t hire people to help care for your aging parents. That threat also can come from neighbors, business partners, financial service providers and even family members. What it does mean, though, is that you need to take every step possible to protect your parents from people who are close enough to take advantage of them.

[ Read: How to Protect Your Parents From Scams and Fraud ]

What is elder financial exploitation?

Financial exploitation is the most common form of elder abuse. It involves scams by criminals who typically don’t know their victims but attempt to gain their trust to con them out of money. As mentioned above, it also involves outright theft. Those who are close to older adults might steal money and belongings, max out credit cards, liquidate retirement accounts, or transfer assets and property.

According to FinCEN, in one extreme case of elder theft, housekeepers for an elderly widow who had dementia isolated her from friends and family then talked her into giving them control over her financial affairs. Over the course of the scheme, they moved the woman out of her home, failed to give her proper medical care then abandoned her once they depleted all of her money.

What are the signs of financial exploitation?

There are several red flags that a caregiver might be exploiting your parents or loved ones. Some are obvious—such as missing possessions from your parents’ home, large or unexplained withdrawals and transfers from your parents’ accounts, large or frequent charges on your parents’ credit cards, or checks written to the caregiver (even though the caregiver is being paid by you).

However, some signs aren’t so obvious because they can be attributed to your parents’ health or mental condition. Be wary and investigate if you notice any of the following:

  • The caregiver starts speaking for your parents or interrupts them when they try to speak to you.
  • The caregiver answers the phone for your parents and makes excuses for why they can’t speak to you.
  • Your parents seem nervous around the caregiver (not just agitated because, perhaps, they don’t like the idea of having a caregiver).
  • Your parents become more private or secretive.
  • Your parents’ appearance changes (for example, they look unkempt or uncared for).
  • Your parents say that the caregiver cares more about them than you do or complain that you don’t love them. 

How to prevent exploitation by caregivers

Protecting aging loved ones, especially those with dementia, from exploitation takes vigilance. Make sure you take all of these steps. 

Vet caregivers carefully. If you use a home care agency, make sure it is licensed and insured and ask if it does criminal background checks and drug screenings on its caregiver employees. If you hire a caregiver on your own, ask friends and family for recommendations then get references, do extensive interviews and ask local law enforcement how to do background checks for caregiving candidates.

Make sure you or a trusted family member has been named power of attorney. If your parents haven’t already named someone they trust to be their financial power of attorney, they could be persuaded by an unscrupulous caregiver to name that person as their power of attorney. Then that caregiver can abuse that power to access your parents’ accounts and steal from them. Even if your parents have named you or someone they trust as POA, make sure their financial institutions know who holds this designation and warn them not to accept documents from anyone else claiming to be your parents’ power of attorney.

Stay involved with your parents’ care. Older adults are more likely to be exploited if they are isolated. If you remain actively involved with your parents’ care and visit them frequently, unscrupulous caregivers might be less likely to target your parents. If you can’t visit because you don’t live close to your parents, call them and make sure you actually speak with them, not just the caregiver. Also, consider asking other family members or trusted friends who live nearby to check in on your parents.

Use technology for remote monitoring. Keep a watchful eye on your parents’ and their caregivers by installing cameras in their house. You don’t have to alert the caregivers to the cameras if they record video only (several states prohibit voice recordings without permission). However, letting caregivers know they’re being watched might serve as a disincentive to take advantage of your loved ones.

[ See: Tech Solutions for Independent Senior Living ]

Use an account monitoring service such as Carefull to monitor your parents’ bank, credit card and investment accounts 24/7. Carefull will alert you if it spots unusual activity such as large transfers and withdrawals. It also will alert you if it spots money mistakes such as insufficient funds, late or missed bill payments, a change in prescription spending and monthly income that isn’t deposited—all of which could be signs of elder financial exploitation.

Have bills and financial statements sent to you. Make sure as many of your parents’ bills as possible are paid automatically each month. Then have bills and other financial statements emailed to you to keep them out of the hands of caregivers who might use the information on the statements to their advantage.

Don’t leave cash, checks or credit cards in the house. If the caregiver needs money to buy groceries and other supplies for your parents, give the caregiver a prepaid debit card with a low limit to use.

Secure valuables. Make a list and take photos of the valuable items in your parents’ home. Store smaller items such as jewelry and coin collections in a safe deposit box or in your home. 

Secure financial documents. Don’t leave any financial documents such as tax returns, stock certificates, insurance policies or Social Security cards in your parents’ home because the information on those documents could be used to steal your parents’ identity or money. Also, don’t leave legal documents such as powers of attorney in the home. You can store digital copies of the documents in a digital vault such as the one offered by the Carefull service and store originals in a safe deposit box or in a safe in your home.

[ Find Out: How to Guard Against Elder Fraud ]

If your parents become victims

Be aware that your parents might be embarrassed or afraid to tell you that they’ve been exploited. Or, depending on their mental state, they might not be able to tell you. That’s why it’s important for you to look out for signs and collect any evidence that you can share with Adult Protective Services in your state and with local law enforcement.

If you hired a caregiver through a home care agency, report your suspicions to the agency director. Contact your parents’ financial institutions to alert them to the fraud and ask whether it’s possible to temporarily freeze their accounts to prevent further transactions. You also might need to contact an attorney to file a case in civil court to place a restraining order on the caregiver.

To learn more, the Consumer Financial Protection Bureau has a free guide on Preventing Elder Financial Abuse.

[ Keep Reading: What You Need to Know About Being a Financial Caregiver ]

Cameron Huddleston

Cameron Huddleston

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