Countering Financial Elder Abuse with Smart Strategies
Many of us have an older person in our lives who protected us from financial mistakes growing up, whether it was our parents, family members, or trusted friends, and now the time has come to give them the same level of protection. October 1st marked International Day of Older Persons, a day to challenge negative stereotypes and misconceptions about older persons and aging...and a good time to check in on someone you care about.
While seniors sometimes need more assistance in their day-to-day activities, protecting a loved one from financial exploitation is paramount to that person’s physical health, mental health, and safety.
What is Financial Elder Abuse and Exploitation?
A 2022 Consumer Affairs report estimated that more than 3.5 million older adults are victims of financial exploitation, with older people being swindled out of $3 billion a year.
The federal government and every state have laws to protect older adults from such abuse. The United States Department of Justice defines this criminal action as when a perpetrator (sometimes well known to the victim, such as a friend, family member, or a caregiver) deceives the older person by improperly using “money, property, or other resources for monetary or personal benefit, profit or gain. This includes, but is not limited to, theft, misappropriation, concealment, misuse or fraudulent deprivation of money or property belonging to the elderly or adult with a disability.”
Often, the perpetrator has cultivated a trusting relationship with the older person, so that there is no suspicion over the latter’s financial activity. In cases where someone has Alzheimer’s or dementia, that person is even more vulnerable to being preyed on.
Examples of Financial Elder Abuse
Con artists are adept at targeting certain elders due to higher rates of cognitive decline, social isolation, and emotional vulnerability, particularly if they have trouble recognizing or reporting fraud. Nursing homes report that the most common types of financial abuse include:
Criminals have been particularly successful with scams involving the telephone and Internet, such as the Grandparent scam, where a con artist impersonates a grandchild in distress. Medical identity theft is another scam that con artists use to obtain social security numbers or medical ID numbers to gain access to the victim’s finances. There are many more schemes that fraudsters use and here’s a list to be aware of.
The most common instance of financial exploitation occurs when the perpetrator steals the elder’s valuable property, misuses the elder’s cash, cashes unauthorized checks or credit cards, or robs them in their own home while impersonating a utility service.
This can either be the work of a crooked financial advisor, who convinces an older person to buy annuities that mature after that person’s death or charges excessive commissions on trading. Or it can be even more insidious: for example, if a caregiver or family member withdraws money in the elder person’s name or makes changes to the elder’s property without consent. If the elder is suffering mental decline and the perpetrator tricks the person into signing over a power of attorney, the perpetrator may have the ability to change the elder’s will, may be able to remove the elder’s property title, or may be able to add the perpetrator’s name to a bank account.
Consequences of Financial Elder Abuse
The monetary consequences can be devastating if an elder has been duped long enough, resulting in a loss of life savings. Since many older adults are retired and living on fixed incomes, financial exploitation can result in no longer being able to afford rent, assisted living care, or even basic living expenses—unlikely to be replaced with additional earnings. Compounded upon that, emotional and physical problems can manifest after exploitation.
A 2019 study on Finance, Cognition, and Health found that older individuals who realized they’ve been exploited by scams or fraud suffered greater symptoms of depression and anxiety, sleep issues, and in some cases, worsened medical conditions.
How to protect a loved one from elder financial abuse
First, learn to recognize the signs: particularly by checking the elder’s finances. Take note if there are unusual purchases or money transfers by the individual or caregiver, unpaid bills, fake signatures on important documents, or sudden changes in the person’s will.
Do a wellness check to determine if the elder is in any danger; if so, call the police. If not, but you suspect financial abuse, contact an Adult Protective Services agency. You can also check in with a mandated reporter (a professional required to report suspected abuse to the authorities, such as the older person’s doctor, or nurse.) In Maine, you can find these resources here.
Additionally, The Maine Long-Term Care Ombudsman Program, a non-profit agency, provides free and confidential advocacy services for residents of nursing homes and assisted care living centers.
Call on Katahdin Trust to help you
At Katahdin Trust, we take financial exploitation seriously and are always available to you if you suspect any fraudulent dealings are taking place in the name of an elder person you care about. For example:
Reach out to us today to contact any of our customer representatives.
Katahdin Trust Company. Community Banking at its best since 1918.