Financial exploitation of the elderly is a serious and growing problem that has affected, and sometimes devastated, many lives. We hear most often about exploitation by scam artists who are, at least initially, strangers to the victim. What may come as a shock is the fact that exploitation by trusted family members and others close to the victim is large part of the problem.
Indeed the numbers indicate that it is a bigger problem than elder abuse perpetrated by strangers. The average financial loss attributable to elder frauds perpetrated by friends, caregivers and family is $145,000, according to a study by the MetLife Mature Market Institute ? much higher than the average loss of $95,000 elder frauds attributed to strangers.
Elder financial abuse is generally defined as the unlawful or inappropriate use of funds or other assets of persons who are age 60 or older. In many states, elder abuse (including elder financial abuse) is a crime and anyone who has reason to believe that elder abuse has occurred is legally obligated to report it to the proper authorities (identified in various states’ reporting statutes).
Yet, according to a 2011 New York survey, only one case of elder financial abuse in 44 is reported and documented. The MetLife study reported that elder financial abuse results in at least $2.9 billion per year. Because it is so underreported, however, many experts believe that is just the tip of the iceberg.
Elder abuse case managers have some advice on how to protect potential victims in certain circumstances. If a friend or relative appears to be pressuring a senior for money, consider engaging a reputable and trustworthy professional to handle the senior’s finances. That way, the potential victim can deflect the abuser’s requests (or demands) without having to say “no” (“I don’t handle my finances anymore”), and further plant the seed that the senior’s money is being guarded.
Another situation that may arise involves a senior who is in the care of another. Out-of-state relatives become uncomfortable if they call and are constantly told that their loved one cannot come to the phone for various reasons. In that situation, one case manager recommends calling local law enforcement and asking them to conduct a “well check.” Officers should make contact with the senior and report their findings back to the caller.
If possible, a vulnerable senior should be visited frequently and inquiries should be made that are designed to obtain information about any concerns the senior may have. Probing conversations about finances can be awkward to say the least. An experienced geriatric counselor can often play an important role in helping adult children have uncomfortable but necessary conversations with aging parents and in helping to manage in-home assistance. Physicians are often a good source of recommendations for geriatric counselors.
Consumer Reports recently published an article on the subject of elder financial abuse that offers a series of red flags to look out for (“Protecting Mom & Dad’s money,” January 2013). In addition to a “new friend” who is helping a cognitively impaired senior with financial matters, and keeping a senior isolation from those who otherwise might be in a position to observe improper actions, well-meaning friends and family should be alert to the following warning signs:
- Unpaid bills, especially is someone has undertaken to perform that service;
- Substantial and unexplained withdrawals from accounts, and other missing property;
- Overly generous payments or gifts to caregivers or others;
- A new authorized signer on the senior’s bank account;
- Changes in financial institutions or professional advisers (attorneys, CPAs, etc.);
- Account statements being sent to a new address;
- Questionable signatures on checks; and
- Unexplained changes in spending and documents, such as wills, powers of attorney, etc.