Your parents, grandparents, aunts and uncles are growing older, and you may be asked questions about their care. Physical health is a top priority, but financial health is another important factor.
Elders are taken advantage of financially more often than you may realize. You might have seen the media reports about elderly folks being swindled out of their savings, investments, or home. The effects can be devastating and long-lasting.
As your loved ones age, they may need help managing their finances. Unfortunately, knowing when to step in isn’t an easy decision. If you put preventative measure in place and look for warning signs, you can protect your aging loved ones from elder financial abuse.
What is Elder Financial Abuse?
When someone uses the resources of an elder for monetary or personal benefit, profit, or gain, it’s considered elder financial abuse or exploitation.
As your loved ones age, they often have increased wealth, a more trusting nature, and declining physical and cognitive abilities. Those traits is what puts elders at risk for financial exploitation. However, even seniors who are cognitively aware and physically capable of managing their affairs on their own can fall victim to financial abuse.
The senior person may not know it’s being done. But the result is the same: it can deprive them of access to or use of their benefits, resources or belongings. The abuse can go beyond the simple taking of money or assets and might include coercion, harassment, and threats.
Warning Signs to Watch For
An estimated 37% of U.S. seniors have experienced financial abuse. If someone you love is advanced in age, know the warning signs:
Remember that the abusers aren’t always who you’d expect. It could be someone the senior knows personally, such as a caretaker, family member, neighbor, or friend. But abusers can also include professionals, such as attorneys, bank employees, pastors, and medical staff.
Reporting Suspected Elder Financial Abuse and Exploitation
Even the best prevention won’t stop a determined scammer. If you see a warning sign or have concerns, don’t hesitate to take action. Calling 9-1-1 is best if the senior is suffering a life-threatening situation. For other situations:
It can feel overwhelming, but it’s crucial to report suspected elder financial abuse, even if you don’t think the money or property can be recovered.
How to Prevent Elder Financial Abuse
Roughly $36.5 billion per year is lost to elder financial abuse. The Consumer Financial Protection Bureau (CFPB) found the risk is higher when a family member or friend is involved. The average loss was $17,000 for financial exploitation by a stranger, but rose to an average of $50,200 when the abuser was a family member or friend.
But there are ways to stop elder financial abuse before it starts. If you’re a senior, take stock of your situation and identify areas in which you may be financially vulnerable. Consider adding a reputable and trusted financial advisor to oversee your financial transactions and decisions. A second set of eyes can help you spot red flags before they become financially devastating.
Setting up automatic bill pay and direct deposit can also decrease the chances of being taken advantage of. And, make sure to plan for future diminished capacity by creating a power of attorney or trust.
Keeping in close contact with elderly friends and relatives can help prevent a financial scam. If you know someone who might be vulnerable, call them on the phone or visit them at home. If you don’t live nearby, ask their neighbors and close friends to check in on them.
When you work together with relatives, neighbors, and community members, you can prevent and stop your aging loved ones from being a victim of elder financial abuse.
