Financial Abuse of Elders and Warning Signs

Elder exploitation is a growing problem in the United States. Our population is aging and, as a group, those over age 65 control about one-third of the wealth in the United States. This wealth is concentrated in a group that also disproportionately suffers from health problems and dementia. They also have higher health and long-term care costs than the rest of the population. Elders are particularly vulnerable to become targets financial abuse, scams, theft, and exploitation.

Unfortunately, those who prey on elders are not limited to strangers. The most common perpetrator of financial abuse of elders is a family member. However, elders are also victimized by their caregivers, financial planners, friends, clergy, attorneys, neighbors, friends, service workers, and bankers.

Some estimate that older Americans lose nearly $3 billion a year due to financial abuse, scams, and exploitation.  Often this exploitation goes undiscovered until all an elder’s money is gone. Determining whether someone has been victimized can be difficult.

Warning Signs

This is not an exhaustive list, but exploiters may show similar behaviors and actions when preying on an elder. There may be financial abuse or exploitation if:

1. The elder is being isolated or isn’t allowed to communicate with others without the presence of the “caregiver” or a particular family member.
2. The elder expresses paranoia that family members are out to steal his/her money (except for the exploiter).
3. The elder’s bank account has unusual activity such as strange on-line payments, automatic payments, or multiple payments for similar services each month.
4. The elder’s bank account has out-of-character withdrawals.
5. The elder adds a caregiver’s name to their bank account signature card and/or credit cards.
6. The elder has numerous withdrawals in round amounts. Example: $250, $500, $600, $1000.
7. The elder has odd purchases. Examples: A motorcycle for an elderly woman confined to her home; a new car when there is no need; expensive jewelry.
8. The elder is accompanied by a caregiver when conducting financial transactions and the caregiver gives most of the instructions.
9. The elder seems to be paying inordinately high compensation for caregivers. Example: The elder is paying a caregiver $1000 a week to drive them to doctors’ appointments.
10. The elder is making odd and duplicative payments to a caregiver. Example: The elder is paying a caregiver $500 more than once in a week or several times a month, but not in a consistent pattern such as weekly.
11. The elder is withdrawing large amounts of money from retirement accounts or investments despite adverse tax consequences or other penalties.
12. The elder is making large or repeated transfers of assets to another person that are out-of-character.  Example:  Loans or gives several thousand dollars to a caregiver when the elder never gave gifts in the past.
13. The elder is making large or frequent withdrawals from checking accounts with checks written for CASH.
14. The elder is making large or frequent withdrawals from accounts when withdrawal slips or checks are signed by the elder but completed by another individual.
15. The elder has numerous unpaid bills associated with the housing, care or food, but should have enough money to pay them.
16. The elder is making changes in beneficiaries on insurance policies, IRA’s or pay on death accounts, particularly to caregivers.
17. The elder makes changes to accounts, beneficiary designation, or ownership by an agent using a power of attorney, making that agent a joint owner or the beneficiary of accounts or policies.
18. The elder has valuable property missing without reasonable explanation. Example: Elderly woman’s wedding ring is missing and caregiver claims it was lost by the elderly woman who never took it off.
19. The elder lacks amenities he/she can or should be able to afford such as personal hygiene items, appropriate clothing, TV, phone.
20. The elder has recent changes to or there is creation of estate planning documents when a person is incapable of doing so.
21. The elder has recent changes to or there is creation of estate planning documents such as a power of attorney or trust, naming an unusual or unexpected individual as a fiduciary. Example: Durable Power of Attorney naming a caregiver instead of a trusted family member as the agent.
22. A caregiver or family member is unusually concerned about the financial status and location of assets belonging to an elder.

Do you believe you or a loved one have been the victim of financial abuse or exploitation?

How to Act

Step 1

Immediately report possible financial abuse to the adult protective services authority in your state or local law enforcement.

Step 2

After reporting the potential abuse, talk to an elder law attorney to recover any assets that may have been taken and for protection against further harm.