Older people are vulnerable to financial abuse, whether by a family member, financial professional, or stranger. Understanding the threat of financial exploitation seniors face can help them avoid people who want to steal their money, identity, government benefits, or possessions.
What Is Financial Abuse?
Financial abuse of an elder can happen when another person or entity uses undue influence to control a senior’s finances. The senior is usually suffering from a form of diminished capacity that prevents them from managing their finances independently.
Undue influence must be proven to show financial abuse. Seniors can prove that they were exploited by the caretaker of their finances if they provide evidence that the caretaker disposed of their money or property without their consent or that they were the victim of the caretaker’s manipulation due to 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 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 US population. By the year 2040, the number of seniors in the US is expected 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 US senior adults will experience some form of elder abuse. In 2021, according to the FBI, more than 92,000 individuals over the age of 60 reported losses of $1.7 billion.
Signs of Financial Abuse
It is important to remain vigilant in watching out for the signs of elder financial abuse. Some signs to look out for if you suspect that someone is taking advantage of your aging loved one include:
- Fraudulent authorizations for credit cards, loans, or bank applications
- Late or unpaid 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 the elderly are 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 your smartphone rings, the screen may read “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, they may ask you a ‘yes’ or ‘no’ question to get a voice recording they can then use to approve bank transactions over the phone.
Sweepstakes and Lottery Scams
Callers excitedly contact you about winning sweepstakes or a contest. These calls are usually not legitimate. The callers often collect valuable data from the recipient, including email addresses, usernames, and passwords. Scammers can use your information or sell your data at a significant profit.
How to Avoid Elder Financial Exploitation
There are ways to protect yourself and your aging loved ones 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 independently. 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 been victimized by financial abuse, you can report it 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. Reporting these acts can help protect yourself and others from financial predators targeting seniors. If you need to contact an elder law attorney, find a qualified professional in your area.