What is considered financial abuse of the elderly?

According to the National Council on Aging, financial exploitation is the fastest-growing form of elder abuse and affects millions of older Americans annually. Knowing exactly what is considered financial abuse of the elderly is the first step toward recognizing this serious crime and protecting vulnerable seniors.

Quick Summary

Financial abuse of the elderly is the illegal, unauthorized, or improper use of an older person's money, property, or assets for the benefit of another person. It can involve theft, fraud, forgery, misuse of legal documents like a Power of Attorney, or deception and coercion, often perpetrated by family members, caregivers, or scam artists.

Key Points

• Definition: Elder financial abuse is the wrongful taking, misuse, or concealment of a senior's funds, property, or assets by a caregiver, trusted individual, or scammer.

• Common Perpetrators: The abuser can be a trusted family member, a professional with legal access (e.g., Power of Attorney), a hired caregiver, or a complete stranger through a scam.

• Signs to Watch For: Red flags include unexplained bank withdrawals, changes to a will, unpaid bills despite sufficient funds, isolation by a new acquaintance, and forged signatures.

• Preventive Measures: Proactive steps include legal planning (Durable Power of Attorney), using checks/credit cards over cash, monitoring accounts, and staying socially connected to combat isolation.

• Reporting Abuse: If financial abuse is suspected, report it immediately to Adult Protective Services (APS), law enforcement (especially in emergencies), and the senior's financial institutions.

Understanding the different types of financial abuse

Financial abuse of the elderly, also known as financial exploitation, is a broad category encompassing various deceptive and illegal acts. These acts can be committed by people the senior knows and trusts, such as family members or caregivers, as well as by strangers through elaborate scams.

Exploitation by trusted individuals

This type of abuse involves individuals who have a close relationship with the senior, giving them access and an opportunity for exploitation. It is often harder to detect and can be emotionally devastating for the victim.

• Misuse of legal authority: A person with a Power of Attorney, guardianship, or conservatorship abuses their legal authority by taking the senior's money or property for personal use instead of managing it for the senior's benefit.
• Caregiver theft: A hired caregiver, or even a family member providing care, steals cash, jewelry, or other valuables from the senior's home.
• Unauthorized card use: A family member or caregiver uses the senior's credit or debit card without permission or for purchases not approved by the senior.
• Forced legal changes: A senior is coerced or deceived into signing legal documents, such as a new will, trust, or deed, that transfer assets to the abuser.
• Isolation and control: An abuser isolates the senior from other family members and friends to gain complete financial control and prevent others from noticing unusual activity.

Scams and fraud by strangers

Scams targeting seniors are rampant and often rely on deception, impersonation, and pressure to get the senior to part with their money.

• Imposter scams: Scammers impersonate government officials (IRS, Social Security), tech support representatives, or bank employees to convince seniors their money is at risk and needs to be moved to a "safe" account.
• Sweepstakes and lottery scams: Seniors are told they have won a large prize but must pay a fee or taxes upfront to claim their winnings. The prize, of course, never materializes.
• Romance scams: Scammers create fake online profiles to build a relationship with a lonely senior. Once they have gained their trust, they create a fabricated crisis and ask for money.
• Grandparent scams: A scammer calls and pretends to be a grandchild in an emergency, asking for money to be wired immediately for bail, medical bills, or travel. The scammer often impersonates the grandchild's voice through artificial intelligence.
• Home repair scams: A scammer shows up unannounced offering unnecessary home repair services and demands a large cash down payment, only to never return.

Spotting the red flags and warning signs

Recognizing the signs of financial abuse is crucial for intervention. Some indicators are obvious, while others are more subtle and require careful observation.

Banking and financial red flags

• Large, unexplained withdrawals from bank accounts.
• Unusual or sudden changes in banking habits, such as adding a new joint account holder.
• Unpaid bills, eviction notices, or new debt, despite the senior having sufficient funds.
• Missing cash, financial statements, checks, or other important documents.
• Suspicious signatures on financial documents or forged checks.
• Transfers of money or property that the senior does not understand or cannot explain.

Behavioral and emotional red flags

• The senior becomes withdrawn, anxious, or fearful, especially around a specific individual.
• A new "friend" or caregiver suddenly becomes heavily involved in the senior's finances.
• The senior expresses feeling pressured to give money to someone.
• Isolation from family and friends by a new or existing acquaintance.
• The senior's living conditions decline despite having adequate funds for care and upkeep.

Comparison of abuse by a known person vs. a stranger

Understanding the differences in how exploitation can occur helps to better identify and address it.

Feature	Abuse by a Known Person	Abuse by a Stranger (Scam)
Relationship	Often a trusted family member, caregiver, or professional.	Perpetrator is unknown to the victim and interacts through phone, mail, or internet.
Method	Undue influence, forgery, misuse of legal access, isolation.	Deception, intimidation, fraudulent schemes, imposter tactics.
Motivation	Entitlement, greed, or substance abuse problems.	Purely financial gain, often on a large scale.
Red Flags	Unexplained financial changes, new joint accounts, isolation, fear.	Unsolicited contact, requests for wire transfers or gift cards, pressure to act quickly.
Emotional Impact	Feelings of betrayal, shame, and helplessness, often hidden out of fear.	Embarrassment, fear, and feeling foolish for being tricked.

How to protect yourself and your loved ones

Prevention and vigilance are the strongest defenses against financial abuse. Educating seniors and their families can make a significant difference.

1. Plan ahead with legal protections: Discuss and formalize financial plans for the future. Create a durable Power of Attorney for finances with an annual review clause and appoint a trusted agent. A trusted third party, such as an attorney, can oversee the accounting.
2. Use paper trails: Opt for checks or credit cards instead of cash for transactions. This creates a clear record of where money is going, which can be invaluable in tracking suspicious activity.
3. Monitor financial accounts: Regularly review bank statements, credit card bills, and credit reports for any unusual activity. Many financial institutions allow for trusted contact alerts.
4. Stay connected: Keep in touch with elderly loved ones, especially if they are isolated. Social connection reduces the opportunity for abusers to gain control.
5. Educate on scams: Discuss common scams with seniors, like imposter, lottery, and romance scams. Reassure them that it's okay to hang up on unsolicited offers.
6. Secure personal information: Shred sensitive documents and lock away checkbooks and bank statements, especially if others have access to the home.
7. Seek outside advice: Encourage seniors to get a second opinion from an attorney or financial advisor before signing any unfamiliar documents or making major financial decisions.

What to do if you suspect financial abuse

Taking prompt action is essential. Do not confront the suspected abuser, as this could escalate the situation and put the senior at further risk.

1. Gather documentation: Collect any evidence of suspicious financial activity, such as bank statements, emails, or notes.
2. Report to Adult Protective Services (APS): Contact your local APS office. They are the primary agency for investigating elder abuse, including financial exploitation.
3. Involve law enforcement: If there is immediate danger or a crime has been committed (e.g., forgery, theft), call your local police department. For internet-related crimes, the FBI's Internet Crime Complaint Center (IC3) is the proper authority.
4. Notify financial institutions: Contact the senior's bank, credit union, or credit card company to alert them of the suspected fraud. They may be able to freeze accounts or place fraud alerts.
5. Seek legal counsel: Consult with an elder law attorney to explore legal options for recovering lost assets or obtaining protective orders.

Conclusion

Financial abuse of the elderly is a serious and growing problem, but it is preventable and addressable. By understanding the common tactics used by abusers and remaining vigilant, families and communities can better protect their senior loved ones. Awareness, open communication, and proactive planning are powerful tools for safeguarding a senior's financial well-being and independence. For more information and resources on combating elder fraud, visit the Department of Justice's Elder Justice Initiative.

Frequently Asked Questions

What is the most common form of financial abuse of the elderly?

The most common forms of elder financial abuse are often committed by people known to the victim, such as family members or caregivers. It frequently involves the misuse of Power of Attorney, unauthorized use of credit cards, or coercing the senior into signing legal documents that transfer assets.

Can a family member be charged with financial abuse of the elderly?

Yes. Family members are often the perpetrators of elder financial abuse and can face criminal charges for theft, fraud, forgery, or embezzlement. The legal and emotional consequences for the entire family can be severe.

How can I tell if my elderly parent is being financially exploited?

Look for unexplained financial changes, such as large bank withdrawals, new names on accounts, or missing funds. Behavioral changes like anxiety or withdrawal, a caregiver controlling access to money, or unpaid bills despite adequate funds are also major red flags.

Is a Power of Attorney absolute protection against financial abuse?

No, a Power of Attorney (POA) can be abused if the designated agent misuses their authority for personal gain. To prevent this, it's wise to choose a highly trustworthy agent, consider appointing multiple trusted individuals, and include provisions for third-party oversight or reporting.

What should I do if my elderly loved one is a victim of a scam?

First, contact their bank and financial institutions to report the fraud and freeze accounts. Report the scam to the local police and federal authorities like the FBI's Internet Crime Complaint Center (IC3). You can also report it to the Federal Trade Commission (FTC).

How can an older adult protect themselves from financial abuse?

Seniors can protect themselves by staying connected with family and friends, never sharing personal financial information over the phone unless they initiated the call, and seeking a second opinion before making major financial decisions or signing documents. Using checks or credit cards instead of cash for transactions also provides a paper trail.

Where can I report financial abuse of the elderly?

You can report suspected financial abuse to your local Adult Protective Services (APS). In emergencies, call 911. For non-emergencies, you can also contact your local police department. Various federal agencies, such as the Department of Justice's Elder Justice Initiative, offer resources and reporting hotlines.