US News & World Report affirms that about 5 million seniors are financially abused each year with a whopping 59% of perpetrators being family members based on The National Center on Elder Abuse’s findings. This crime is believed to cost Americans as much as $36.5 billion annually.
What Constitutes Elder Financial Abuse
Defining exactly what is considered domestic financial abuse in a relationship can be difficult since parents tend to be generous with their children and loved ones. A key difference between a parent’s or friend’s financial gift and elder abuse relates to the giver’s mental and financial capacity to make that decision without harming themselves in the process.
Risk Factors that Contribute to a Higher Probability of Abuse
While anyone can become a victim of elder abuse, certain types of people tend to be targeted more frequently with various types of financial abuse.
Below is a list of examples of financial abuse facts and risk factors that can make seniors a target.
Seniors who are isolated are less likely to have friends or family members watching out for them. It’s easy to see how a lonely and isolated baby boomer can fall prey to scams or other deceptive maneuvers made by a friendly-seeming predator offering some much-needed attention.
Compromised Physical Health
While we all need other people, seniors dependent on others to drive them to doctor’s appointments, take them to church, or pick them up for routine activities are especially vulnerable. Unfortunately, predators seek out needy older people and know how to expertly con them out of their money.
That old saying that no man is an island seems to ring true for most of us. As social creatures, we need human contact and attention on a regular basis. With that said, loneliness can leave us vulnerable to overtures by financial predators.
Poor Cognitive Health
An obvious risk factor that leaves many boomers especially vulnerable to financial predators is cognitive impairment. Sadly, there are many relatives who will take advantage of the situation. Unscrupulous family members and friends acting as the agent for an impaired senior via a power of attorney are likely to allocate funds for their own use.
Overly Trusting Nature
Better Health While Aging reports that there are changes in the brain that take place as a person ages that actually make them more trusting. Granted, these changes can be positive since it makes them feel happier and more optimistic. The downside is that becoming more trusting can put a senior in harm’s way financially.
How to Protect Yourself and Loved Ones from Becoming a Victim of Financial Abuse
The two main ways to protect yourself and other loved ones is to take preventative measures and to also know the red flags so you can identify abuse when it occurs.
The American Bankers Association (ABA) warns of changes in a senior’s financial spending patterns as a major red flag.
Red flags indicating possible financial abuse:
- Large, frequent or unexplained withdrawals from bank account
- New friends accompanying the senior to the bank
- Unpaid bills
- Changing an account to one that offers sophisticated services that the elderly person does not understand
- Suspicious check signatures
- Attempts to wire significant amounts of money
- Uncharacteristic non-sufficient fund notices
- Erratic closing of accounts in spite of associated penalties
- Suspicious bank withdrawals or transfers that the senior customer can’t remember or explain
- Changes to wills and trusts
- Reluctance to discuss financial transactions
- Lack of eye contact when discussing certain financial matters
- Checks described as gifts or loans
- Unexplainable loss of assets or property
- Caretakers, friends or relatives that conduct financial transactions without the proper authority to do so
2 Quick Tips to Protect Aging Family Members From Being Financially Exploited
1. Establish a financial plan making your wishes known sooner rather than later. The goal should be to have this in writing long before you need it due to mental, or physical problems that can compromise your judgment.
2. Identify a team of trustworthy people and make them aware of your financial goals as you age. Consider family members, friends, and financial professionals like SilverBills. It’s a good idea to rely on several people as a way to keep everyone honest. This type of checks and balances strategy holds everyone accountable.
What to Do if You Suspect Abuse
Boomers who suspect they are being abused should not remain silent. Unfortunately, embarrassment sometimes renders seniors quiet, discouraging them from reaching out for help. It makes sense to talk to a trusted friend, family member or financial professional to voice your suspicions and get some ideas about the next steps to take.
There are also professional hotlines established to help seniors with this type of financial problem. The Eldercare Locator and VictimConnect helplines are two valuable resources to call for immediate help.
In cases where you are trying to help a senior who is worried about possible abuse, it is important to listen to them fully explain their concerns before jumping in uninformed. Seniors need to feel heard before they can trust you to work on their behalf.
Gather any available information you can find that confirms the senior’s suspicions. If deemed necessary from the evidence on hand, contact appropriate financial institutions or law enforcement to voice your concerns on behalf of the senior. New rules put in place to help address elder financial abuse makes it easier to orchestrate this type of maneuver as a third party.
Planning ahead with a strong financial plan in place that takes into account the aging process is always a good idea. By enlisting a number of trusted people to advocate on your behalf with your written wishes known ensures more accountability and lessens the chance for abuse.