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National Council on Aging estimates elder financial abuse and fraud costs to older Americans range from $2.6 billion to $36.5 billion annually.
While it is easy to think that elder financial abuse originates from unknown masked callers and ingenious hackers, the truth hits much closer to home. Elder financial fraud often arises within families and caregiver networks and is perpetrated by those who have promised to care for and protect their loved ones. According to the National Alliance for Caregiving and AARP, about 34.2 million Americans have provided unpaid care to an adult age 50 or older in the last 12 months. With so many seniors relying on loved ones and caregivers, it is  crucial to recognize the signs of financial abuse and, more importantly, how to prevent it.
What is elder financial abuse?
Elder financial abuse is committed when an individual improperly, unethically, or illegally accesses a senior citizen’s funds, property, or assets for personal gain. Elders are particularly vulnerable to this type of financial abuse due to the unfortunate isolation experienced by so many. Older individuals may have significant liquid assets that were accumulated over a lifetime. Such assets are used to pay for their living expenses during retirement. At the same time social circles may be shrinking, leaving them increasingly more dependent on caregivers for all their social, emotional and care needs. The confluence of these circumstances may create a “perfect storm” for elders.
Financial elder abuse can take many forms. It can involve cashing an elder’s check without authorization, forging a signature, misusing or stealing money or possessions, coercing an elder to sign a document, or even convincing a senior to sign up for a risky business opportunity that benefits the other person. This type of financial abuse is not always overt. It can take the form of any undue influence even if a senior seemingly allows it.  A person who exercises such influence for their own benefit  can be held responsible for committing elder abuse, especially if the senior is physically or mentally impaired or dependent on others for care.
This gray area between right and wrong can prove challenging for seniors and caregivers alike. 
 Some warning signs of elder financial abuse include:
  • Relationships: Be wary of new close friendships or a withdrawal from existing friends and family. When a senior is isolated, they become more vulnerable to fraudulent financial scams and abuse.
  • Mental: Seniors may express confusion about their financial history, or they may act embarrassed or uncharacteristically resentful when you try to discuss finances with them. Be sure to keep the pathways of communication open and honest.
  • Assets: Watch for unusual account activity, large purchases, unpaid bills, or financial opportunities that seem 'too good to be true.’
  • Physical: Changes in appearance or hygiene may signal an elderly person is struggling. The cause may be the stress and pressure of ongoing fraud.
How can we prevent elder financial abuse?
It is up to all of us to identify and prevent elder financial abuse. Here are a few tips and tricks that you can use to protect yourself and your loved ones:
  • Create your “Dream Team:” Surround yourself with people you trust and  include independent advisors. No one person should have all the power. It takes a village.
  • Partner with a financial institution you trust: Financial institutions often cultivate warm and trusting relationships with their clients. Your relationship manager and professional financial partners are familiar with your spending habits and behaviors and can be the first ones to raise a flag if something goes awry. These types of partnerships do not have to be transactional. By partnering with a bank that you trust, you can build a solid relationship and ensure any deviation from a pattern will not go unnoticed.
  • Protect your privacy: Keep your important financial documents under lock and key. Make sure any financial summaries, bank and trust statements, estate planning documents and tax records are all in a safe place away from prying eyes.
  • Trust yourself: If something seems off, it very likely is. Do not be afraid to question decisions and advocate for your loved ones.
Elder financial abuse does not just impact the bottom line, it can leave lasting emotional damage as well. While seniors can lose money, assets, property, or even take a hit on their credit score, financial fraud can also cause depression, anxiety, conflict among loved ones, and a reduced quality of living.
Speaking up against elder financial abuse can be scary and uncomfortable. The elder may not know they are being taken advantage of or may become defensive when approached about the topic. But elder financial abuse is happening across the country. It is up to all of us to identify and prevent elder financial abuse, and to protect yourself and your loved ones from financial and emotional threats. Be wary, be vigilant, and be as informed as possible to protect your loved ones.  

Elder financial fraud is often perpetrated by those who have promised to care for and protect their loved ones.