According to the World Health Organization (WHO), between the years 2015 and 2050, the population of individuals over the age of 60 is expected to more than double from 900 million to 1.2 billion people worldwide. Considering this statistic, it is more important than ever to consider specific risks that older people may face, including elder abuse, a problem that WHO reports occurs with one in every six people over the age of 60.
Of particular concern is elder financial abuse, the fastest growing form of elder abuse. This type of financial crime costs its victims more than $3 billion annually and is something every older person or loved one of an older person should be aware of in order to protect themselves.
What Is Elder Financial Abuse?
Elder financial abuse, also known as elder fraud, happens when an individual uses an elderly person’s money, property, or other assets without their permission. This typically involves obtaining access to assets illegally or through questionable means.
Elder financial abuse can take many forms, including coercion or fraudulent schemes (e.g., “investment” opportunities, and “lottery” winnings), misspending elderly people’s money while neglecting to pay bills, and engaging in credit card and identity theft.
Signs of Elder Financial Abuse
Family and friends of older people can help reduce the risk of elder financial abuse by paying attention to key signs of this type of abuse. The signs to look for include:
Unusual Financial Activity
If you regularly monitor the financial activity of an older person, you may immediately notice when things seem “off” in terms of their spending habits. Pay attention to unusual breaks in a regular pattern of spending and keep an eye over time to see if a new, more disturbing pattern emerges, as this is the first sign of elder financial abuse. Other signs particular to elder financial abuse include large, frequent, unexplained cash withdrawals or checks made out to “CASH” and changes in normal financial practices, such as ATM withdrawals made by a person who rarely used an ATM before.
New Friends or Helpers
Although many older people employ others to help them, the sudden appearance of a new “friend” or helper without any discussion of needing any help may be cause for alarm. Pay particular attention to whether these new people accompany the older person to the bank or run errands for them using a credit card or debit card or if your loved one suddenly begins giving this new person large “loans” or “gifts.”
Changes to Financial or Legal Documents
If your older friend or relative changes their financial or legal documents without warning or apparent cause, this could also be a sign of elder financial abuse. Examples include closing accounts, such as CDs, without worrying about penalties and altering important documents, such as powers of attorney, wills, and trusts.
Isolation
While people over the age of 50 control approximately 70% of the world’s wealth, not all of them feel confident in their financial position. As a result, an older person who falls victim to financial fraud may feel intense shame or embarrassment over their financial status and withdraw from family and friends. They may not show up at events and get very quiet or agitated when confronted about their finances.
Older folks who are suddenly low on funds may also stop caring for themselves out of a sense of shame, or they may no longer have the money to do so in extreme cases. As a result, sudden changes in their appearance or lack of general care and maintenance to their home may also be signs of elder financial abuse.
Tips to Protect Against Elder Financial Abuse
When it comes to preventing elder financial abuse, protection is key. Make sure that you set yourself and your loved ones up for success by putting together a financial plan that has natural protections against abuse and follow through with it. Here are some tips to help protect older people from becoming victims of financial fraud and abuse.
Create a Plan to Protect Your Assets
Plan ahead by designing the type of financial portfolio that is tough to drain. This includes taking time to talk to a financial advisor about goals and late-in-life plans and making sure to use the tools that banks and credit unions provide, such as account alerts and automatic bill pay, that can help you easily spot suspicious activity.
In addition, working with local banks and credit unions, such as Hudson River Community Credit Union, can also provide a significant benefit. When you work with neighborhood financial institutions, they get to know you and those you love. As a result, they may recognize suspicious activity more quickly.
Regularly Review Your Credit Report
Keeping track of credit reports for yourself and those you love is another great way to stay ahead of fraudsters. In some cases, elderly victims may not even be aware they are giving away sensitive information, such as their social security numbers or other financial information. However, when you monitor your credit report for inquiries (such as those made for new loans or credit cards), it is easier to spot potential identity theft before the damage becomes extensive.
Set up a Financial Power of Attorney
A financial power of attorney, also known as a general power of attorney, is a legal designation that allows another individual to act on your behalf in certain legal and financial matters. As you age, finding and designating a trusted loved one or a professional, such as your financial advisor or lawyer, to serve as your power of attorney can help alleviate some of the worry surrounding elder financial abuse. For many older adults, especially those with memory issues, designating a financial power of attorney is a good way to ensure that there is someone to serve as an overseer of finances in a way that will work in your best interests.
Check in on Loved Ones
Finally, perhaps the best and most effective way to care for elderly individuals as they age is to simply check in on them. Many victims of elder abuse, financial or otherwise, are easy targets simply because they are alone and feel lonely. If you make a point to connect with older loved ones, establishing a relationship based on love and respect (rather than financial gain), the likelihood of others being able to come in and take advantage of that person is greatly reduced, simply because someone has their back and is paying attention.
What to Do If You Are a Victim or Know Someone Who Is a Victim
If you suspect that an older person you know is the victim of financial abuse, there are a few important steps to take. First, start by trying to talk to them about it. It is important to get as many details about the situation as possible in order to have the proper information before contacting the authorities. However, remember that many older people feel deep shame and embarrassment about being the victims of financial abuse. Try to be understanding and compassionate, reminding them that your only goal is their well-being.
Don’t hesitate to reach out to your local law enforcement agency or the FBI, which regularly investigates cases of elder abuse, especially when it comes to fraud and identity theft. Another important source is the older person’s financial institution(s), who can stop payment on checks and help you to assess the true nature of the abuse and/or fraud. Finally, especially if you are having a hard time getting information from your older loved one, consider talking with your area’s adult protective services agency.
