By Michael Axe
Every so often there’s a news report about someone scamming an elderly person or couple out of their life savings. However, there are other more subtle instances where the abuse goes undetected. Elder financial abuse is a growing problem that can happen to any family. Here’s what you need to know.
What is elder financial abuse?
Elder financial abuse and exploitation is defined as the fraudulent, illegal, unauthorized or improper use of resources of an older person for monetary or personal gain, or preventing an older person the right to access or the use of his or her resources, belongings or assets.
What are common ways the elderly are financially abused?
While elder financial abuse takes place in many forms, here are some of the most common ways it occurs.
Grandparents scam: A fraudster calls an older person claiming to be their grandchild. The con artist tells the elderly person that it’s an emergency situation and that the “grandparent” is the only one who can help by providing money.
Internet phishing: While any one of us could fall for a phishing scam, the elderly tend to be more common targets due to their perceived lack of technical savvy. A phishing scam occurs when you receive an email from a fraudster claiming to be from your financial institution. You are then directed to a fake website that looks identical to your financial institution’s site, and you’re asked to provide personal information, such as a card number and PIN or Social Security number.
Family ties: More often than we like to think, elderly people are taken advantage of by close family members who are supposed to be looking out for them. This can happen in many ways. Sometimes, the elderly are threatened with abandonment or physical harm if they don’t give the abuser money. The abuser may be “taking care” of the elderly person only to neglect them and use the elderly person’s funds for their own use. In extreme cases, the elderly person is removed from their own home and the abuser moves in.
Home repair: A trusted professional either does not perform the job they were paid to do or the job is badly done. The elderly person may also be forced to pay more than the original agreed upon price for “extra expenses,” or the repair person leaves the job half-finished.
Predatory lending: This occurs when an elderly person is convinced to obtain a large, unneeded loan, which eventually causes financial difficulty and, in extreme cases, loss of their home.
Inappropriate investment strategies: Some unscrupulous financial advisers sell investment opportunities that don’t pay out until their elderly targets are over 90 or 100 years old, effectively tying up their money and possibly putting them in a position of financial hardship.
Why are the elderly targeted?
Many elderly don’t realize the value of their homes or assets. They can also be quick to trust, have an instinct to protect their family without questioning the situation, or they just don’t know who would believe them if they spoke up. In addition, while technology makes it easier for many of us to manage our finances, the digital age oftentimes makes things more complicated for the elderly.
How do I tell if a family member is a victim?
Some signs are easier to spot than others, such as having a new best friend who may attempt to isolate the elderly person from relatives, receiving a level of care that doesn’t match the person’s income, or the elderly person being unable to explain the financial arrangements that the so-called caretaker set up.
Signs are harder to spot when elderly family members don’t mention the abuse to anyone. Oftentimes, they don’t say anything because they think that everything is OK or they fear what the abuser may do to them (a threatened punishment that’s either physical or mental abuse).
Other signs of financial abuse include bank statements no longer being delivered to their home or email accounts, new legal documents being signed that the elderly family member can’t explain or doesn’t understand, or unusual activity on a bank statement that doesn’t fit previous spending patterns.
What you can do to prevent this?
If you’re the only family member an elderly person has, ask to be added to the bank account or at least have your relative provide you with online account access so you can monitor the account for unusual activity. If they get to an age where they are no longer able to manage their own finances, look into setting up a trust, which can help protect their assets now and into the future.*
If there are several relatives who can assist with the elderly family member, separate the responsibilities as much as possible. Having one relative in charge of medical, another overseeing financial matters and another in charge of day-today activities can help keep everyone in check. In addition, communicate with each other frequently and set up a back-up person for each aspect of care who can periodically look into what the other relative is doing.
Talk with your elderly loved ones regularly and really listen to what they are saying. If what they say makes you think twice, or your gut instinct tells you something isn’t right, ask questions to help clarify the situation. If you live close to them, make time and visit often. Not only will you get time with your loved one, you can also inspect their home to make sure all of their valuables are where they are supposed to be and nothing is amiss.
What should you do if elder financial abuse is taking place?
While each situation will be unique, here are some options:
- Meet and talk with the suspected abuser if there’s something that you think they may have done. If what they say still causes you to be concerned, take other steps to protect the elderly victim.
- Remove the suspected abuser from the situation, appointing someone new to that role, or cut off access to your loved one if it’s a scam artist.
- Contact the police, adult protective services and speak with a lawyer to receive counsel on next steps.
For more information about preventing elder financial abuse, visit MyCreditUnion.gov.
* Trust accounts are merely one of many options for managing assets. Please reach out to a licensed legal professional and tax professional to learn more about the benefits and risks associated with trust accounts.