What Is Elderly Financial Abuse?

And how to notice and combat it

By Canaan Suitt, J.D. | Last updated on February 6, 2023

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Elder financial abuse is when someone fraudulently or inappropriately takes or misuses an older adult’s resources for their own gain.  

Perpetrators of elder financial abuse might directly steal from an older adult or use other deceitful methods to take their money. Victims of elder financial abuse who are deprived of their financial resources often struggle to make ends meet. 

Elder financial abuse is one of the most common types of elder abuse in the United States. According to the National Center on Elder Abuse (NCEA), one in 10 Americans over the age of 60 has experienced elder abuse in some form.  

Despite the prevalence of elder financial abuse, “as much as 80-90% of vulnerable adult abuse and exploitation is unreported,” says Minnesota elder law attorney Laura J. Zdychnec. According to the NCEA, only one in 24 elder abuse cases is reported to law enforcement or other authorities.  

Why are incidents so often unreported?  

“The hard thing is that family members are, more often than not, the ones who engage in the exploitation,” says Zdychnec. According to the NCEA, most perpetrators of elder financial exploitation and other forms of elder abuse are spouses and adult children. Caregivers, neighbors, and best friends are also frequently involved. 

“Getting people to talk about it can be a real challenge. For example, mom doesn’t want to say that the son, who’s always been the apple of her eye, is taking money out of her checking account,” Zdychnec adds. 

Older adults with mental disabilities or impairments, such as dementia or Alzheimer’s, are especially vulnerable to being taken advantage of.  

Given the seriousness of the problem nationwide, federal and state laws exist to combat elder abuse. For example, the federal Elder Justice Act of 2010 (EJA) established robust requirements for reporting elder abuse in nursing home facilities. The EJA also coordinates federal, state, and local agencies in detecting and fighting elder abuse. States have their own elder abuse statutes as well as agencies for detecting and dealing with elder abuse. 

This article will give an overview of elder financial abuse, the red flags to look out for, and the steps to take if you suspect financial abuse.  

What Are the Warning Signs of Financial Abuse?  

Several warning signs can indicate someone you know is being financially abused or exploited. Zdychnec says detecting elder financial abuse is often not based on one factor or event. Instead, you have to look holistically at the situation and pay attention to developments over time.  

That being said, here are some things to look out for: 

  • sudden large withdrawals from bank accounts 
  • sudden changes in spending habits  
  • someone that the older person recently met is now making financial decisions for them 
  • someone close to the person is exercising undue influence over their financial decisions or is signing legal documents for them 
  • unpaid bills for credit cards or utilities start to accumulate, even though the person has money to cover their living expenses 
  • the elder says they have won a lottery or sweepstakes online and have to a pay a fee to claim the winnings 
  • the older adult complains about receiving a lot of telemarketing scams 
  • there are signs of identity theft 

“It’s essential for family members and loved ones to be alert to changes in a parent or grandparent’s spending habits. Also, if they suddenly talk about people they’ve met helping them with their money, that always makes my antennae go up,” says Zdychnec. 

Of course, confronting the issue of elder financial abuse “can raise hard questions about who gets to be the arbiter of what is best for a person,” she adds. 

“The older person has a right to autonomy, and it’s not necessarily my place as a lawyer to tell them that they can’t be giving so-and-so any more of their money, even if they risk bringing financial ruin on themselves by continuing to give that person money. It’s a constant balancing act between autonomy and being alert to whether the person is being taken advantage of in some way.” 

What To Do if You Suspect Financial Abuse? 

If you suspect that an older loved one is being financially exploited, there are several things you can do: 

  • Report the abuse to your state’s Adult Protective Services (APS). APS is generally under state social services agencies. The Consumer Financial Protection Bureau (CFPB) advises individuals making a report with their state APS to include as much information as possible, including details about the type of abuse, the people involved, and when the abuse happened. 
  • Notify law enforcement about the situation. 
  • If the older adult is a resident of a nursing home or other long-term care facility, you can notify your state’s Long-Term Care Ombudsman Program. 
  • Notify the individual’s financial institution or financial service provider (such as the local bank or credit union) about the suspected elder fraud. 
  • Notify the person’s financial advisor about suspected abuse and how to counteract it. 
  • Contact the U.S. Department of Justice’s National Elder Fraud Hotline. 
  • Encourage the older individual to speak with an elder law attorney about their situation and legal options. 

What To Do if You Think You’re a Victim of Financial Abuse?  

If you think you are the victim of financial abuse, the steps to take are the same as those discussed in the section above: report the abuse to law enforcement or the appropriate state agency, and strongly consider speaking with a lawyer as soon as possible. 

You can also take important steps ahead of time to avoid getting exploited altogether. 

“Doing estate planning is one important thing,” says Zdychnec. In addition to having a last will and testament, appointing a power of attorney (POA) when creating an estate plan is essential. There are different types of POA, including healthcare POAs and financial POAs. If you become incapacitated, the POA has a fiduciary duty to represent your best interests in making decisions on your behalf. 

“Ideally, when you do an estate plan, it means you’ve sat down with a lawyer who honors your wishes and gets enough information about your situation to be confident that they are appointing an appropriate person to be a surrogate decision-maker for you,” Zdychnec says. 

Having a POA “is legal protection all by itself—legally empowering someone you know and trust to act in your best interests, preferably long before you actually need them to.” 

Questions for an Elder Law Attorney 

Depending on the nature of the consultation, some elder law attorneys provide free initial meetings. In some cases, there is a fee for the consultation that may be put toward future legal services. In many cases involving elder abuse, attorneys work on a contingency fee basis, meaning they aren’t paid until the case is won. You can ask about fees upfront. 

To get the most out of a consultation, ask informed questions such as: 

  • What are your attorney’s fees and billing options? 
  • How many cases involving elder financial abuse have you handled? What were the outcomes of those cases? 
  • What counts as elder financial abuse in my state? 
  • How do I report the elder financial abuse? 
  • How do state agencies handle reports of abuse?  
  • What are the penalties for financial elder abuse? 
  • What is the process for bringing a lawsuit against the perpetrator of the financial abuse? 
  • What sort of compensation can be won in a lawsuit? 

Once you have met with a lawyer and gotten your questions answered, you can begin an attorney-client relationship. 

Look for an elder law attorney in the Super Lawyers directory for legal help with elder abuse issues.

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