What Is Elderly Financial Abuse?

Elder financial abuse involves taking advantage of older adults with scams, identity theft, caregiver theft, and misappropriated funds from people in a position of trust. Family members with a power of attorney or professionals with a fiduciary duty commit financial exploitation with unauthorized transactions, forged signatures, account skimming, and trust mismanagement. Signs of possible financial abuse include will changes and property transfers by someone with undue influence. After reporting abuse, victims of consumer fraud can get legal restitution to recover their monetary losses.

The process for reporting and investigating elder abuse can depend on where you live. Get legal advice about preventing elder financial abuse from an elder law attorney.

Prevalence of Elder Financial Exploitation

Elder financial abuse is one of the most common types of elder abuse. 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.

“Elder abuse is a huge problem, completely devastating, costs billions of dollars for society, and devastates families,” says Eric Einhart, an elder law attorney at Russo Law Group in Garden City, New York.

Despite its prevalence, Minnesota elder law attorney Laura J. Zdychnec says, “As much as 90 percent of vulnerable adult abuse is not reported.” According to the National Council on Aging (NCOA), people only report one in 24 elder abuse cases to law enforcement or other authorities.

“It’s a perfect storm,” says Marco Chayet, an elder law attorney at Chayet & Danzo in Denver. “Elder issues and exploitation are now entering the public consciousness similarly to how children’s issues came to the forefront in the ’70s and ’80s.”

Culprits of Elder Financial Abuse

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

Sometimes caregivers get themselves named to joint accounts or learn bank passwords. Once in a great while, they maneuver to marry the elderly person. “All of a sudden, you hear about a caretaker sitting on grandpa’s lap,” says elder law attorney Anthony Enea of Enea, Scanlan & Sirignano in White Plains, New York.

“The most typical scenario involves an immediate family member,” adds Ron Fatoullah, an elder law attorney at Meltzer, Lippe, Goldstein & Breitstone in Mineola, New York.

“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 impairments, such as dementia or Alzheimer’s, are especially vulnerable.

Federal and State Laws Against Elder Abuse

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 to detect and combat elder abuse. States have their own elder abuse statutes as well as agencies for detecting and dealing with elder abuse.

What Are the Warning Signs of Financial Abuse?

Several warning signs can indicate someone you know is being financially abused or exploited. 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.

Here are some things to look out for:

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

Being Alert to Elder Financial Abuse and Confronting the Perpetrator

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

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,” Zdychnec adds. “Older people have a right to autonomy. It’s not my place to tell them that they can’t be giving so-and-so any more of their money, even if they risk bringing financial ruin by continuing to do so.”

“The people exercise influence to isolate the victim, keep others away, and convince them that nobody else cares about them,” says Catherine Anne Seal, an elder law attorney at The Gasper Law Group in Colorado Springs. “They also make them dependent: withhold food and medication or threaten with harm or abandonment if they do not do what they want them to do.”

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 the purview of state social services agencies. The Consumer Financial Protection Bureau (CFPB) advises individuals to include as much information as possible about the type of abuse and who’s involved.
• Notify law enforcement about the situation.
• If the older adult is a resident of a nursing home or long-term care facility, you can notify your state’s Long-Term Care Ombudsman Program.
• Notify the individual’s financial institution about the suspected elder fraud.
• Notify the person’s financial service provider of any suspected abuse and how to address it.
• Contact the U.S. Department of Justice’s National Elder Fraud Hotline.
• Encourage the older individual to consult an elder law attorney regarding 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, take the steps discussed above. Report the abuse to law enforcement or the appropriate state agency. Then strongly consider speaking with a lawyer as soon as possible.

You can also take important steps in advance to avoid exploitation altogether.

Elizabeth Forspan, a partner at Forspan Klear in Great Neck, New York, says averting abuse starts with a good estate plan. “From a financial perspective, the advance planning piece is very important,” she says. “It all goes together to prevent the abuse and the neglect.”

When a family member is entering a long-term care facility, those with enough funds can hire a private aide to help safeguard a loved one from abuse.

“Doing estate planning is one important thing,” says Zdychnec. In addition to having a will, it is essential to appoint a power of attorney (POA). There are different types of POA, including healthcare POAs and financial POAs. If you become incapacitated, the POA has a fiduciary duty to act in 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. You can feel 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.”

Document Everything and Keep Evidence

“Document everything,” adds Einhart. “Document as much as you can as quickly as you can. Write down everything you think, or you fear may have happened, and take photos of all potential injuries.”

Such steps are crucial if you need to file a lawsuit. “It is usually a personal injury attorney who will bring a civil action against a facility,” Einhart says.

Questions for an Elder Law Attorney

Depending on the nature of the consultation, some elder law attorneys provide free initial meetings. In other cases, the consultation fee goes toward future legal services.

In many elder abuse cases, attorneys work on a contingency fee basis. This means there are no upfront legal fees, and you only pay if the attorney wins your case.

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