What Is Elder Financial Abuse?
World Elder Abuse Awareness Day is June 15. At least 1 in 10 adults age 65 and older experience some form of elder abuse in a given year, according to the U.S. Department of Justice. Although abuse often is thought of as physical, financial exploitation actually is the most common form of elder abuse.
Victims of elder financial abuse lose more than $3 billion annually, according to the Financial Crimes Enforcement Network (FinCEN). Yes, that’s billion with a B—and that figure likely doesn’t represent the true scope of losses because most elder financial abuse incidents go unidentified and unreported.
Not only are victims impacted financially, but also their emotional well-being and quality of life can suffer. That’s why it’s so important for both older adults and their family members or caregivers to take steps to prevent elder financial abuse and to report abuse if it happens.
What is elder financial abuse?
Elder financial abuse—also known as elder financial exploitation—is the illegal, improper or inappropriate use of an older adult’s money, property or resources. It can involve theft by someone who is known to the older adult, such as a family member, friend or caregiver. Or it can involve fraud and scams by strangers.
Victims often are exploited multiple times and lose tens or hundreds of thousands of dollars. Most don’t recover the money they lose, according to the Consumer Financial Protection Board.
Who is at risk of elder financial abuse?
People prey on older adults, in large part, because they have a stash of retirement savings and a stream of steady income from Social Security or a pension. However, there are other factors that put older adults at a greater risk of exploitation. According to FinCEN, those who are targeted tend to have one or more of the following characteristics:
- Cognitive decline
- Decline in physical ability
- Isolated from family and friends
- Lack of familiarity or comfort with technology
- Reliance on others for physical well-being or financial management
How to prevent elder financial abuse: Tips for older adults
You can reduce the risk of becoming a victim of elder financial abuse by taking these steps.
Safeguard your personal information
Never share your personal or account information in response to an unsolicited call, even if the caller claims to be with a government agency. Government agencies such as the IRS and the Social Security Administration typically communicate by mail, not by phone or email.
Keep financial records, legal documents and sensitive information securely stored in a home safe or a digital vault, especially if you have household employees or caregivers.
Shred receipts, account statements and unused credit card offers before throwing them away to prevent sensitive information from falling into the wrong hands.
Use strong passwords that have a variety of random upper- and lowercase letters, numbers and symbols to prevent hackers from accessing your accounts. Also, don’t reuse passwords for more than one account.
Put protections in place
Name a durable power of attorney to make financial decisions and transactions for you if you can’t. Drafting, signing and sharing this document with your financial institutions while you’re in good health can ensure that someone you trust will manage your finances if you become unable to do so yourself.
Name a health care power of attorney to make medical decisions for you if you are unable to yourself. This will ensure that someone you trust has the legal authority to manage your health care.
Name trusted contacts on your financial accounts. These are people your financial institutions can contact if there is suspicious activity on your accounts and they can’t reach you.
Identify trusted family members who can help you with your finances as you age. Share details about your finances with these trusted family members so they can manage your finances in a way you would want if you become unable to yourself. This allows you to build a circle of support before you have any issues. Otherwise, people you don’t trust might try to fill those support roles and take advantage of you.
[ See: Legal Documents to Make Your Wishes Known ]
Take advantage of technology
Check your accounts regularly online and set up alerts on your online accounts to be notified by email or text message about transactions on your accounts. You also could use a service such as Carefull to do the monitoring for you. Carefull will monitor your bank, credit card and investment accounts 24/7 for common money mistakes and signs of fraud and will alert you when it spots something unusual.
Check your credit report for any loans or lines of credit you don’t recognize, which could be a sign that you’re a victim of identity theft. You can get free copies of credit reports from each of the three credit bureaus—Equifax, Experian and TransUnion—at AnnualCreditReport.com. Also, consider placing a security freeze on your credit reports to prevent new accounts from being opened in your name.
Sign up for credit monitoring to be alerted when there are changes to your credit report or credit score. Credit monitoring is included as part of the Carefull service.
Sign up for identity monitoring to detect whether your personal information is being misused or sold illegally on the dark web. This protection is included with the Carefull service, as well as up to $1 million in identity theft insurance.
Talk with someone you trust before making any financial decisions.
Trust your instincts. If an offer sounds too good to be true, it probably is. Or if someone is pressuring you to take action and it doesn’t feel right, it’s OK to say “No” and hang up or walk away.
Carefully vet anyone you hire to work in your home or help manage your finances.
Don’t be afraid to contact your financial institution, Adult Protective Services or law enforcement if you think someone is trying to take advantage of you.
Signs of elder financial abuse: Tips for families
There are several red flags that your parents or aging loved ones are being exploited. If you notice any of these signs of elder financial abuse, talk to your loved ones first to see if there is a logical explanation. If not, you need to get involved to stop elder financial abuse.
- Unexplained withdrawals or transfers from your parents’ accounts
- Large or frequent charges on your parents’ credit cards
- Disappearance of cash or credit cards
- Unpaid bills, collection notices, utilities turned off despite financial means to pay bills
- Eviction or foreclosure notice
- Disappearance of valuable property
- Previously uninvolved relatives, friends or neighbors forging a closer relationship
- Relatives or friends making frequent requests for money from your parents
- A parent mentions an online friend is asking for money
- A parent asks how to wire money or to buy a gift card to make a payment
- Forged signatures on checks and financial transactions
- Changes to will, power of attorney or other legal documents
If your parents have a caregiver or someone helping them in their home, be on the lookout for these signs that the caregiver is exploiting them.
- 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 report elder financial abuse
If you or your loved ones are a victim of a scam or fraud by a stranger, report fraudulent transactions to your bank, credit card or investment company—depending on the account where the transactions occurred. Contact your local law enforcement to report the crime, and file a report with the Federal Trade Commission’s IdentityTheft.gov site.
If your personal information was stolen, contact the three credit bureaus—Equifax, Experian and TransUnion—to put a freeze on your credit reports to prevent fraudulent accounts from being opened in your name. See What to Do If Your Identity Is Stolen to learn more.
If the perpetrator is someone you or your loved one knows, contact Adult Protective Services and local law enforcement to investigate. Do not confront the person responsible for the exploitation yourself.
[ Keep Reading: How Your Risk of Financial Exploitation Increases With Age ]
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