Tips for Preventing Elder Financial Abuse

Sadly, elder financial exploitation is a growing problem. Financial exploitation occurs when a person misuses or takes the assets of a vulnerable adult for his or her own personal benefit. This frequently occurs without the explicit knowledge or consent of a senior or disabled adult, depriving him or her of vital financial resources for personal needs.

According to a report from the Georgia Department of Human Services' Division of Aging Services, the department addressed 50,159 reports of abuse, neglect and exploitation reported to Adult Protective Services in 2018.

That mirrors national trends. According to research from the National Adult Protective Services Association, one in nine elder adults reported being abused, neglected or exploited in the past year. Financial exploitation was a particularly prevalent form of elder abuse, with one in 20 older adults indicating they had been in some way financially mistreated in the recent past.

Unfortunately, that number is likely much larger in reality. The Georgia Bureau of Investigation and the Georgia Department of Human Services Division of Aging Services reported that for every case known to programs and agencies, another 23 go unreported.

When elder financial exploitation occurs, assets are commonly taken via forms of deception, false pretenses, coercion, harassment, duress and threats. Some commonly reported forms of financial exploitation* reported to Adult Protective Services agencies include:

Theft: involves assets taken without knowledge, consent or authorization; may include taking of cash, valuables, medications, and other personal property.

Fraud: involves acts of dishonestly by persons entrusted to manage assets but appropriate assets for unintended uses; may include falsification of records, forgeries, unauthorized check-writing, and Ponzi-type financial schemes.

Real Estate: involves unauthorized sales, transfers or changes to property title(s); may include unauthorized or invalid changes to estate documents.

Contractor: includes building contractors or handymen who receive payment(s) for building repairs, but fail to initiate or complete project; may include invalid liens by contractors.

Lottery scams: involves payments (or transfer of funds) to collect unclaimed property or "prizes" from lotteries or sweepstakes.

Electronic: includes "phishing" e-mail messages to trick persons into unwittingly surrendering bank passwords; may include faxes, wire transfers, telephonic communications.

Mortgage: includes financial products which are unaffordable or out-of-compliance with regulatory requirements; may include loans issued against property by unauthorized parties.

Investment: includes investments made without knowledge or consent; may include high-fee funds (front or back-loaded) or excessive trading activity to generate commissions for financial advisors.

Insurance: involves sales of inappropriate products, such as a thirty-year annuity for a very elderly person; may include unauthorized trading of life insurance policies.

* Definitions of financial exploitation vary from jurisdiction to jurisdiction.

Tips to Preventing Elder Financial Abuse

  • Keep in contact. According to AARP, it's easier for criminals to step in and befriend elderly people when they're lonely. Be sure to call and visit elderly friends and family members frequently. Establish yourself as a trustworthy presence for them to lean on if they find themselves worried or in trouble.
  • Remain vigilant. Keep an eye on the financial habits of your elderly friends and family members. Take note of large withdrawals, unusual requests for money or alarming lapses in memory about major financial transactions. Remember that you don't have to prove financial exploitation to report it. Your suspicion is enough.
  • Know your elderly relatives' acquaintances. Make sure you are becoming acquainted with the people interacting with your elderly friend or relative. It may also be helpful to know the nature of these interactions. Keep a close eye on anybody you don't know well and track suspicious behavior in acquaintances - and family members.
  • Have difficult conversations. It may be uncomfortable to ask an older relative about financial matters, especially if they've always been financially independent in the past. It might be equally difficult to approach a trusted relative about suspicious behavior toward an elderly acquaintance. While these issues might be sensitive, it's important they're brought to light, just in case.

Get professional help. A lawyer can work with elders to establish trusts and other financial arrangements that are difficult for criminals to breach, according to Money Crashers. Lawyers can also recommend mediators and counselors who can work with families experiencing tensions over the finances of an elderly relative.

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