Elder abuse is on the rise, including financial abuse. Many seniors, regardless of their income bracket, are at risk as people over age 50 control over 70% of the nation’s wealth.
The definition of financial exploitation varies between jurisdictions, but is broadly defined as the illegal or improper use of the property, assets, or funds of people 60 and older.
Financial Elder Abuse Can Include:
- Identity theft
- Credit card fraud
- Abuse of power of attorney
- Annuity scam
- Using undue influence to cheat seniors out of property or assets
Many times, the abuse goes unreported, as victims may be embarrassed that they fell for a scam.
Several years ago, I had a client in her 80s for whom I had prepared taxes for each year for almost 20 years. Though still very astute and sound, she fell for a scam. She didn’t tell anyone until one day, after the fact, when she admitted to writing a check for $10,000 to a group she had heard about on the news, which resulted in the FBI contacting her to let her know that she had been scammed.
Common Reasons the Elderly Become a Target:
- Lack of familiarity with consumer rights
- Unawareness of scams
- Loneliness or isolation
- Medical conditions such as dementia or Alzheimer’s
Signs that a Client or their Family Member May Be Being Exploited:
- Transferring assets to a new friend
- Changes in spending habits
- Excessive reimbursements to caregivers or family members
- New authorized signers on bank accounts
- Missing property
- Large withdrawals from bank accounts
- Unpaid bills or disappearing bank statements
Advisors, watch for these important signs and, where appropriate, consider communicating with the loved ones of your elderly clients to help prevent the spread of elder financial abuse.