What Is Financial Elder Abuse and How Can You Protect Yourself?
Older adults are often the targets of scams and fraud, but they can also be the victim of financial elder abuse. Financial abusers are often close to the victim, which can make this crime especially hurtful.
Learn more about this kind of financial abuse, so you can identify and prevent the situation for yourself or your loved ones.
What Is Financial Elder Abuse?
Elder financial abuse happens when someone exploits the finances of a senior for their personal gain. The abuser could take money, property or other valuable items. Financial abuse can happen at the hands of anyone who has some control over the victim or their finances, including family members, caregivers and professionals who handle the victim's finances.
The following situations are examples of elder abuse:
- A family member with access to the victim's bank account transfers money to themselves.
- A caregiver takes a family heirloom from the victim's home.
- A business associate or financial professional bills a senior client for services they never provided.
- Someone with access to the victim's personal information applies for credit cards under the victim's name and uses the cards.
How Prevalent Is the Problem?
According to the World Health Organization, 6.8% of seniors experience financial abuse in a community setting based on self-reporting. In institutional settings, that rate is 13.8%, as reported by older adults or proxies. Elder financial abuse costs its victims at least $36.5 billion per year, according to the National Council on Aging.
As people get older, they often need help managing finances. This gives the abuser access to things of value and makes it easier to commit financial elder abuse. You're at a higher risk of becoming a victim of financial fraud if someone has access to your bank accounts or other valuables or they have power of attorney and can make decisions for you.
What Are the Penalties if Caught?
The laws against taking advantage of seniors, financially or otherwise, vary by state. If someone is caught, they can face criminal charges for financial elder abuse, which could be a misdemeanor or a felony, depending on the laws and the severity of the crime. The punishment can range from paying the victim back to jail time. Financial elder abuse can also be handled in civil court without criminal charges.
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What Are Some Warning Signs?
Financial elder abuse isn't always as easy to spot as other types of abuse. If a senior is being physically abused, they'll often have bruises, broken bones or other physical signs. Identifying elder financial abuse can be more difficult, especially for seniors who have cognitive difficulties. If the abuser takes a little money here and there, it might not be obvious that money is missing.
Some warning signs of financial elder abuse can include:
- Checks or money transfers to the abuser
- Unpaid bills, eviction notices or utilities being shut off for nonpayment
- Valuables that go missing
- Large or unexpected withdrawals
- Forged signatures on documents
- Unusual documents that the senior signs
- Changes in spending habits
- Changes to wills or other legal documents
- New financial accounts are being opened in the victim's name
- Someone close to the victim spending more money than usual or suddenly having lots of new things
Victims with dementia or other conditions that incapacitate them might not realize they're being financially abused and are often a bigger target for this type of elder abuse.
How Can Seniors Protect Themselves?
Anyone can become a victim of financial abuse, but older adults are often more susceptible, especially people with dementia or disabilities who rely on others for help. However, there are ways to protect yourself from financial harm.
Some ways you can reduce your risk of being a victim of financial elder abuse include:
- Consult with an attorney or another trusted person before signing any documents.
- Research any attorneys, financial advisors and any other companies you plan to do business with to ensure they're trustworthy and legitimate.
- Manage your medical conditions well to minimize impairments and the amount of help you need from others.
- Create legal documents, including living wills and power of attorney, before you start to decline to make your intentions known. Work with a reputable attorney on these documents.
- Review your financial accounts regularly.
- Avoid letting one person have sole control over your finances. Having multiple people help could prevent one person from exploiting you without others noticing.
- Be suspicious of someone who tries to isolate you from others. Maintain your relationships and talk to those people about your situation, so they can help keep an eye on things.
- Check your credit report at least once per year to look for accounts you don't recognize.
If you notice anything suspicious, get help from someone you can trust. You can also contact your local adult protective services department — every state has one. Your state's organization can help if you've been abused or exploited. Contacting a lawyer or your local district attorney is an option for taking legal action. You can also contact the financial institutions that handle your accounts to stop additional issues and start the process of restoring the account.
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