Detecting and Dealing With Elder Financial Abuse

Older people are vulnerable to financial abuse, whether by a family member, financial professional, or stranger. Understanding the threat of financial abuse that seniors face can help them avoid people who are seeking to steal their money, identity, government benefits, or possessions.

What Is Elder Financial Abuse?

Financial abuse of an older person can happen when another person or entity uses undue influence to control a senior’s financial resources.

The senior may be suffering from some form of diminished capacity that prevents them from managing their own finances. Or they may have a more limited understanding of modern financial systems and technology, and this can make it easier for others to take advantage of them. In addition, older individuals may be more trusting and less likely to question the motives of those who seek to exploit them financially.

To show that financial abuse has occurred, you must prove undue influence. Seniors can prove that they were exploited by the caretaker of their finances if they are able to provide evidence that the caretaker disposed of their money or property without their consent or that their caretaker exploited them because of their age, frailty, illness, or special relationship.

Elder financial abuse may take the form of credit card fraud, tech support fraud, romance scams, personal data breaches, and identity theft, among various other types of scams and financial crimes.

For example, during the COVID-19 pandemic, many seniors found themselves having to shop online for the first time. In 2020 alone, victims over the age of 60 filed more than 14,000 complaints for purchases they made online, often from bogus sources advertised on social media that were never delivered.

How Common Is Elder Financial Abuse?

The population of American adults over the age of 65 is increasing every year. In 2019, there were 54.1 million adults over the age of 65, which represents 16 percent of the total population of the United States. By the year 2040, the number of seniors in the U.S. is on track to increase to 80.9 million. Given the massive growth expected for this population, fighting elder financial abuse is especially important.

The Department of Justice reports that more than 10 percent of U.S. senior adults will experience some form of elder abuse. This may take the form of financial abuse, emotional abuse, neglect, or physical abuse, including domestic abuse. According to the FBI, more than 92,000 individuals over the age of 60 who experienced financial abuse reported losses of $1.7 billion in 2021 alone.

Signs of Financial Abuse

Remaining vigilant and watching out for the signs of elder financial abuse can prove crucial. Some signs to look out for if you suspect that someone is taking advantage of your aging loved one include the following:

• Fraudulent approvals for new credit cards, loans, or bank applications
• Late bills or failure to pay bills
• Unusual credit card charges and changes in spending habits
• Unexpected changes to important legal documents like wills, trusts, or other financial documents

Seniors Should Watch Out for These Common Scams

Seniors are also particularly vulnerable to scammers. Seniors and their families should be aware of some common scams through which an elderly person is often targeted, including the following:

Government Health Insurance Scams

Callers may claim that your benefits will end if you do not provide them with personal information immediately. This is a tactic used to gather sensitive information, including your Social Security Number, PIN, or date of birth.

Robocalls

We are living in the age of receiving automated robocalls. When a spammer calls you on your smartphone, a message may appear on the screen that reads “Potential Spam” or “Scam Likely.” More tech-savvy people know how to avoid these calls, but the elderly may fall victim to them. To help seniors avoid robocall scams, explain the risks associated with accepting these calls.

Scammers on the other end of the line will ask questions that may help them collect information they can use to their advantage. For example, if you get a call from a phone number you do not recognize, the caller may ask you a ‘yes’ or ‘no’ question to get a voice recording they can then use to approve bank transactions over the phone.

You also may consider registering for the National Do Not Call Registry. You can accomplish this for free via the Federal Trade Commission's online form, and your registration will not expire. This will not block illegal scammers from trying to contact you. However, it will alert sales professionals from legitimate, legally compliant companies that they should not call you.

Sweepstakes and Lottery Scams

When callers excitedly contact you about winning a sweepstakes or a contest, these calls are usually not legitimate. The callers often are seeking to collect valuable data from the recipient, including email addresses, usernames, and passwords. Scammers can use the information you give them or sell your data at a significant profit.

How to Avoid Elder Financial Exploitation

You can protect yourself and your aging loved ones in several ways from predators who want to exploit you financially.

Designate a Financial Power of Attorney

A financial power of attorney is a specific person who oversees making financial decisions on your behalf if you lose the ability to do so on your own. Most states require you to record this transfer of power in writing and have it signed and notarized. You may have powers of attorney for other areas in your life. The person who serves as your financial power of attorney can also serve in other capacities.

Create a Joint Account

If you believe that your loved one is susceptible to becoming the victim of a financial crime, it may be a good idea to create a joint account with them. If your name is also on the account, you will have access to their statements and their mobile banking accounts. That way, you can monitor and respond to any unexpected changes in spending.

Where Can I Report Financial Abuses and Crimes?

If you have fallen victim to financial abuse, do not hesitate to reach out for support. You may feel ashamed, especially if have found that you are in an abusive relationship with someone you trust. Or, you may worry that your loved ones will no longer think you are capable of managing your own financial affairs. Yet reporting these kinds of acts can help protect yourself as well as others from financial predators who target seniors.

You can report incidents of abuse to the Federal Trade Commission’s National Elder Fraud Hotline at 877-FTC-HELP. Or, visit the National Center on Elder Abuse’s website to find the appropriate reporting agency in your state. These resources provide support and guidance for seniors facing financial exploitation.

If you need the expertise of an elder law attorney, search for a qualified professional in your area. Elder law attorneys can help victims of elder financial abuse by providing legal advice and representation.

They may be able to assist in recovering stolen assets or filing civil lawsuits against perpetrators. As mentioned above, they also can partner with you on establishing legal documents such as a power of attorney to prevent future exploitation. Their expertise focuses in part on advocating for the rights of seniors and helping aging adults to navigate complex legal processes.

Additional Reading

Again, keep in mind that seniors can be particularly vulnerable not only to financial exploitation but also other forms of abuse. Learn more about how you can best protect yourself and your aging loved ones via the following resources:

• 10 Ways to Avoid Financial Abuse
• Drafting a Power of Attorney That Lessens the Chances of Abuse
• Online Survey Helps Older Adults Assess Their Risk of Financial Exploitation
• The Best and Worst States for Protection Against Elder Abuse
• Elder Financial Abuse by Family Caregivers
• Q&A: What Is Elder Abuse?