What to do if someone is being financially exploited?

According to the National Council on Aging, financial exploitation is the most common form of elder abuse, costing victims an estimated $36.5 billion annually. Taking swift and decisive action is crucial if you suspect someone is being financially exploited, as time is of the essence in protecting their assets and well-being.

Quick Summary

If you suspect financial exploitation, you must act immediately by documenting the situation, contacting Adult Protective Services and law enforcement, and notifying the individual's financial institutions. Taking these steps can stop the abuse, initiate an investigation, and recover lost funds to protect the vulnerable person's resources and independence.

Key Points

• Report Immediately: As soon as you suspect financial exploitation, contact Adult Protective Services (APS) and local law enforcement to initiate an investigation and protective measures.

• Document Everything: Keep a detailed record of all suspicious financial activity, including dates, transactions, and names, to provide evidence to authorities.

• Secure Finances: Notify the victim's bank and other financial institutions to freeze accounts, place fraud alerts, and halt suspicious activity.

• Seek Legal Counsel: An elder law attorney can provide crucial guidance on revoking powers of attorney, recovering assets, and taking civil or criminal action.

• Establish Protections: Create robust preventive measures for the future, such as automatic bill pay, shredding sensitive documents, and involving multiple trusted individuals in financial oversight.

• Address Emotional Impact: Recognize that exploitation is emotionally taxing. Offer support and encourage the victim to seek counseling or join support groups to aid in their recovery.

Recognizing the Signs of Financial Exploitation

Identifying financial exploitation can be challenging, as perpetrators are often trusted family members, friends, or caregivers. Vigilance and an understanding of the warning signs are key to protecting a vulnerable person. The signs can be subtle at first and may escalate over time. Knowing what to look for can help you intervene before significant harm is done. Some common red flags include:

• Unusual Banking Activity: Unexplained, frequent, or large withdrawals from bank accounts, ATM withdrawals by a person who doesn't typically use one, or sudden wire transfers of large sums of money.
• Changes to Documents: Abrupt and unexplained changes to wills, trusts, Power of Attorney designations, or other financial documents.
• Isolation and Control: The victim becoming isolated from friends and family, often by a new "best friend" or caregiver who controls access to them.
• Neglect and Unpaid Bills: Unpaid bills, eviction notices, or overdue taxes, despite the victim having sufficient funds to cover them.
• Missing Possessions: The unexplained disappearance of valuables, checks, or other financial documents.
• Behavioral Changes: Confusion, fear, or reluctance to discuss financial matters on the part of the victim, especially around a specific individual.

Immediate Actions to Take

When you confirm or strongly suspect financial exploitation, immediate action is necessary to protect the individual and their assets. Delay can result in significant financial loss and emotional distress. Taking the following steps can create a record of events, stop the abuse, and initiate legal and protective proceedings.

1. Document Everything

Begin by documenting every detail you can. This is critical for building a case and providing authorities with a clear picture of the situation. Your documentation should include:

• Detailed Notes: Keep a written log with dates, times, and descriptions of suspicious activities. Note any conversations with the victim, the alleged exploiter, or financial professionals.
• Financial Records: Gather copies of bank statements, credit card statements, and any legal documents like powers of attorney or wills that appear to have been altered.
• Photos and Screenshots: Take pictures of any evidence, such as missing items or unpaid bills. For online scams, take screenshots of emails, texts, or social media conversations.

2. Contact the Appropriate Authorities

Reporting the crime to the correct agencies is essential. The type of report you file will depend on the nature of the exploitation and the immediate risk to the victim.

• Adult Protective Services (APS): For vulnerable or elderly adults, APS is the primary reporting agency. They investigate reports of abuse, neglect, and financial exploitation. They can provide protective services and support. The Eldercare Locator is a valuable resource for finding your local APS office.
• Law Enforcement: Report the crime to your local police or sheriff's office. If there is immediate danger, call 911. Filing a police report is a crucial step toward a formal investigation.
• Financial Institutions: Alert the individual's bank, credit union, or investment company immediately. They can freeze accounts, reverse fraudulent transactions, and place fraud alerts on credit reports.
• Federal Agencies: For scams involving the mail, contact the U.S. Postal Inspection Service. For online fraud, file a report with the FBI's Internet Crime Complaint Center (IC3).

Taking Legal and Protective Measures

Beyond the initial reports, several legal steps can help protect the victim and hold the perpetrator accountable. Engaging with legal and financial experts can ensure all protective actions are taken.

Consulting with an Elder Law Attorney

An elder law attorney can provide legal guidance specific to your state's laws regarding elder abuse. They can help with the following:

• Power of Attorney Review: If a Power of Attorney was used improperly, an attorney can help revoke it and establish a new one with a more trusted individual.
• Asset Recovery: They can explore legal options to recover lost funds or assets. This might include filing civil lawsuits against the exploiter.
• Court Petitions: In severe cases, an attorney can help petition the court for a conservatorship or guardianship to ensure a trusted third party manages the victim's finances.

Safeguarding Against Future Exploitation

Prevention is the best defense against future incidents. Once the immediate threat has been addressed, it is vital to put safeguards in place.

• Increased Oversight: Consider involving multiple trusted family members in managing the individual's finances. Automated bill pay and direct deposit can reduce the need for cash transactions and create a paper trail.
• Financial Literacy and Awareness: Educate the vulnerable individual on common scams and tactics used by exploiters. The FTC's Pass It On website offers tips for starting these conversations.
• Building a Strong Support Network: Encourage the victim to stay connected with friends and family to prevent isolation, a key tactic used by exploiters.

Taking Action Against Different Perpetrators

The approach you take might vary depending on the type of relationship the perpetrator has with the victim. It is important to know the specific routes to take for each situation.

Family Member as Perpetrator

Family financial exploitation is particularly devastating. When dealing with a family member, consider these steps:

1. Confront with Caution: Before confronting the family member, ensure you have sufficient evidence and have already secured the victim's assets. Confrontation can escalate the situation and endanger the victim.
2. Report to APS: Adult Protective Services is often the best agency for handling sensitive family dynamics.
3. Involve Legal Counsel: An elder law attorney can manage communication and legal action, minimizing family conflict and protecting the victim.

Stranger or Scammer as Perpetrator

Scammers often use sophisticated methods to defraud seniors. When dealing with a scammer, follow these guidelines:

1. Cease All Communication: Instruct the victim to stop all contact with the scammer immediately.
2. Report to Federal Agencies: Use the FTC and FBI's IC3 to report the fraud. Provide any information you have about the scam, including names, phone numbers, and websites.
3. Place Fraud Alerts: Place fraud alerts on the victim's credit reports with the three major credit bureaus (Equifax, Experian, TransUnion) to prevent new accounts from being opened in their name.

Comparison Table: Reporting Avenues

Reporting Avenue	When to Contact	Example Scenario
Adult Protective Services (APS)	Abuse of a vulnerable adult (60+ years)	Caregiver misusing a senior's funds for personal gain.
Local Law Enforcement	Immediate danger or criminal activity	Caregiver stealing cash or valuables; fraudulent checks.
Financial Institution	Suspicious account activity or transactions	Unexplained large withdrawals or wire transfers.
FBI Internet Crime Complaint Center (IC3)	Online scams or internet fraud	Phishing emails, romance scams, or tech support scams.
Federal Trade Commission (FTC)	Identity theft or fraud	Someone opening credit cards in the victim's name.
Elder Law Attorney	Need for legal advice or action	Contesting a fraudulently changed will or POA.

A Path Forward: Healing and Recovery

Beyond the financial and legal steps, it is important to address the emotional toll financial exploitation can take. Victims may feel shame, embarrassment, or betrayal, especially when the perpetrator is a family member. Recovery involves not just recouping financial losses but also healing emotionally and rebuilding trust.

• Emotional Support: Encourage the victim to seek counseling or join a support group. Reassure them that they are not to blame.
• Financial Rebuilding: Work with a financial planner to assess the damage and create a plan for financial recovery.
• Building a Trust Circle: Create a small, trusted circle of individuals to help oversee the victim's finances and provide support. This reduces the risk of future exploitation and helps the victim feel secure again.

In conclusion, recognizing the signs of financial exploitation and knowing the steps to take is crucial for protecting vulnerable individuals. By documenting evidence, reporting to the right authorities, taking legal action, and putting safeguards in place, you can stop the abuse and help a loved one recover their financial security and peace of mind. For more resources and information, visit the National Adult Protective Services Association at https://www.napsa-now.org/.

Frequently Asked Questions

What is financial exploitation?

Financial exploitation is the illegal, unauthorized, or improper use of a vulnerable person's funds, property, or assets for the benefit of someone other than the individual. It can be committed by strangers or, more commonly, by trusted individuals like family members or caregivers.

What are the common signs of financial exploitation?

Warning signs include unusual banking activity, abrupt changes to legal documents (like wills), isolation of the victim by a new individual, unpaid bills despite sufficient funds, and the unexplained disappearance of money or valuables.

Who should I report financial exploitation to?

You should report suspicions to Adult Protective Services (APS) for vulnerable adults, local law enforcement for criminal activity, and the victim's bank or financial institution to freeze accounts. For online scams, report to the FBI's IC3 and the FTC.

Can I get the exploited money back?

Recovering lost funds is possible but not guaranteed. Reporting the incident quickly to financial institutions and working with an elder law attorney to pursue legal action, such as a civil lawsuit, offers the best chance of recovery.

What if the perpetrator is a family member?

Cases involving family can be particularly sensitive. It is best to gather documentation and report to APS and law enforcement. An elder law attorney can also help navigate the complex legal and emotional dynamics involved.

How can I prevent future financial exploitation?

Preventive steps include setting up automatic bill payments, appointing a trusted individual with Power of Attorney, regularly monitoring financial accounts, and keeping the vulnerable person socially connected to prevent isolation.

What is Adult Protective Services (APS)?

APS is a social services program available in each state that investigates reports of abuse, neglect, and exploitation of older adults and adults with disabilities. They can provide protective services and support to vulnerable individuals.