Elder financial abuse in the United States is a widespread problem. The Consumer Financial Protection Board (CFPB) estimates that older adults have lost more than $6 billion to fraudsters since 2013, which is an average of $34,200 per incident. Seniors are often more susceptible to financial abuse than people of younger ages due to one or more of the following factors: mental and physical decline, a lack of financial education, isolation, emotional distress, loneliness, and misplaced trust in a family member or friend.
Elder financial abuse can be perpetrated by family, friends, paid home care workers, or financial planners. However, because most seniors don’t want to see their relatives or friends prosecuted, the actual amount of abuse is probably much higher than what is reported. The CFPB notes that while filings of suspicious activity reports regarding elder financial abuse have been rising in recent years, only about 1/3 of incidents are reported to law enforcement.
Common Types of Elder Financial Abuse
Caregiver fraud: Unscrupulous caregivers have been known to siphon funds off the seniors in their care by gaining their trust and then abusing the senior’s credit and debit cards, making unauthorized withdrawals from their checking accounts or withdrawing large amounts of cash on routine shopping trips. Sometimes a caregiver will get an elder to purchase expensive items such as cars or vacations for them. Other times they will fabricate a story about a dire financial situation they’re experiencing and convince their charge to gift them money to resolve the issue.
Power of Attorney abuse: Caregivers, family members, and so-called friends will sometimes abuse the authority they have as power of attorney to redirect funds or assets named in a senior’s will to themselves. Fraudsters will also convince the senior to change their power of attorney from the current assignee to them, and then begin to take their assets.
Isolation or unexplained moves: Bad actors often succeed at elder financial abuse by isolating the senior from their family so that any financial abuse is even more hidden. They persuade the senior that their family is a danger to them or convince the family that the senior doesn’t want to have a relationship with them anymore. Bad actors and disgruntled family members have even moved elderly relatives into a nursing home against their wishes to be able to take control of their mail, their bank statements, and family heirlooms.
Coronavirus-Related Financial Scams
As of May 2020, the Federal Trade Commission and Food and Drug Administration have issued warning letters to 40 organizations selling products they claim can cure the effects of the coronavirus/COVID-19 virus. These products include teas, essential oils, and colloidal silver. There is currently no FDA-approved vaccine or treatment for COVID-19. The FTC recommends ignoring all emailed or phone-based offers for treating COVID-19, as well as researching any organization that claims to be collecting donations for coronavirus relief. Never give money in the form of gift cards, cash, or wire transfer.
Don’t Be Afraid to Ask for Help Preventing Elder Financial Abuse
One of the best ways to prevent elder financial abuse is for multiple family members to stay involved:
- Watch the senior relative’s bank accounts for suspicious activity. Make sure important mailed items like checks or utility bills aren’t disappearing, or going unpaid, and landing a loved one in financial trouble.
- Periodically review their shopping receipts for unusual or expensive purchases.
- Keep a copy of their signed will, and know the contact information for the attorney who keeps the original. Check in with the attorney and the senior annually to ensure there aren’t any unexpected changes to it.
- Establish a conservatorship, which is a court-appointed individual who manages a loved one’s financial affairs.
The American Bankers Association lists more elder financial abuse warning signs and prevention tips here. If you suspect someone is financially abusing an older loved one, a good way to find trusted help is to call Georgia’s Adult Protective Services agency.
Brian M. Douglas & Associates is Also Here to Help.
Our law firm specializes in helping seniors live with financial peace of mind. If you would like assistance with an elder financial abuse situation or want answers about how to legally protect a lifetime’s work of financial planning and saving, call Brian M. Douglas & Associates at (770) 933-9009.