Protecting Your Loved Ones from Financial Elder Abuse
Financial elder abuse is when a relative, caregiver, stranger, or “friend” exploits an older person to deplete savings and assets that have taken years to accumulate. This type of abuse can severely affect an elder’s lifestyle. Elder abuse is accomplished by taking or misusing the property or resources of a vulnerable adult by means of undue influence, breach of a fiduciary relationship, deception, harassment, criminal coercion, theft, or other unlawful/improper means.
Identifying elder financial fraud can help protect older friends and relatives against these types of losses.
Warning Signs of Financial Abuse:
- Engages in erratic, unusual, or uncharacteristic bank activity.
- Makes large withdrawals in a secretive manner.
- Suddenly acquires new acquaintances, particularly those who take up residence with them.
- Makes changes to property titles, wills, or other documents and is confused about the consequences.
- Executes a power of attorney and is confused by the consequences of this action.
- Doesn’t have amenities for which they can pay (having no heat despite being able to afford it).
- Indicates that some of their property is suddenly missing.
- Indicates that they are being evicted.
- Has obvious health or mental problems that are not being treated.
- Indicates that their mail is no longer being delivered to their home.
- A normally friendly person withdrawing socially or afraid to engage in conversation.
Warning Signs of Possible Vulnerability to Financial Abuse:
- There is a noticeable change in appearance and grooming.
- Person becomes disoriented, doesn’t know where they are, or indicates that they are forgetting things.
- Person becomes paranoid about money in his or her accounts.
- Dramatic changes in mood or disposition.
- Make a plan to ensure your assets are secure. Talk to an attorney or financial advisor to find the best options for your situation. Choose someone you trust to assist with estate planning.
- Lock up personal financial information like checkbooks, statements, etc. when someone is visiting your home. Shred financial documents and junk mail before throwing them away. Make payments with checks and credit cards to maintain a paper trail. Review your credit report regularly.
- Don’t provide financial or personal information to anyone over the phone, unless you initiated the call. Never pay fees or taxes to collect any sort of “winning.”
- Get details in writing and seek out a second opinion before making financial decisions. Consult with an attorney or financial advisor before signing documents.
- Build a relationship with your banker and anyone who handles your finances. Check references and credentials before hiring anyone.
- Use online banking and mobile app to keep your account safe.
- Set up fraud text alerts for unusual activity.
- Manage your debit card by turning it “off” to prevent transactions from occurring.
The truth is a vast majority of elder fraud cases in the U.S. go unreported. However, estimates of 7.86 million cases of elder fraud occur in the U.S. annually resulting in $148 billion in losses.
Only one in 23.5 incidents are reported to authorities based on one study*. Some key findings:
- More than one in 10 elderly people in the U.S. fell victim to elder fraud in the last year,
- Nearly eight million incidents of elder fraud occur every year, in total.
- Average loss per case is $17,869.
- In all 50 states, losses due to elder fraud total $148.6 billion each year.
How to Report Financial Elder Abuse
The exact process varies from state to state, but in most situations, your local law enforcement office will have a form that allows you to report your concerns. Some states even feature confidential 24/7 hotlines for reporting elderly neglect, abuse, and exploitation.
*Source: FinCEN SAR statistics: https://www.fincen.gov/reports/sar-stats