Preventing Elder Financial Abuse

Preventing Elder Financial Abuse

It is written about every day in newspapers all across the country.  It affects elderly individuals from all walks of life in every community regardless of gender, race, or ethnicity.  The annual financial loss to its victims is estimated to be at least $2.6 billion per year.  It is estimated to cost Americans tens of billions of dollars annually in health care, social services, investigative and legal costs, and lost income and assets. What is this costly phenomenon that is underrecognized, underreported, and underprosecuted?  It's called elder financial abuse, and it's on the rise in the United States.  The MetLife Mature Market Institute, the National Committee for the Prevention of Elder Abuse, and the Center for Gerontology at Virginia PolyTechnic Institute and State University recently conducted a comprehensive study about the extent and implications of elder financial abuse. Their findings reveal that even more than the economic loss, the human costs suffered by victims when taken advantage of by family, friends, and trusted strangers are immeasurable.  

What is "elder financial abuse?" According to the National Center on Elder Abuse, elder financial abuse is the illegal taking, misuse, or concealment of funds, property, or assets of a vulnerable elder at risk for harm by another due to changes in physical functioning, mental functioning, or both. Elder financial abuse encompasses a broad range of misconduct, including, but not limited to, fraud, scams, undue influence by family members and trusted others, and illegal viatical settlements; abuse of powers of attorney and guardianships; identity theft; internet "phishing;" failure to fulfill contracted health care services; and Medicare and Medicaid fraud.  The most common perpetrators of elder financial abuse are those that are close associates of the victim - family members, friends, caregivers, and neighbors.

Results from Adult Protective Services nationally suggest that, on average, the "typical" victim of elder financial abuse is between the ages of 70 and 89 years, white, female, frail, and cognitively impaired. Women may be seen as prime targets for elder financial abuse for a variety of reasons, including, but not limited to, (1) women tend to live longer than men and become responsible for the household finances for the first time after the death of their husbands, (2) women may have predictable patterns in the handling of their finances and in their daily routines so observant perpetrators can predict when an older woman will have money on hand or may be going to the bank, thus making older women targets for a variety of cons and scams, and (3) women may be more trusting in the advice of others, especially if they are new at seeking financial advice. 

While elderly women may be seen as the "typical" victim of financial abuse, older men are certainly not immune to it.  Like older women, older men also experience losses of spouses and friends as they age.  Such losses may leave them alone and lonely to the point that they may become unwitting victims of people who seek to "befriend" them - with the intention of creating a coercive relationship through which the abuser gains financially at the expense of these elderly men.

There are many reasons why the instances of elder financial abuse have increased over the years.  First, there are more elderly people in the population which means more potential for elder financial abuse.  Second, older Americans have the lion's share of the money and therefore are the obvious targets for predators looking for financial gain.  Third, many seniors tend to have diminished cognitive abilities which tend to create greater vulnerabilities to financial abuse. Finally, technologies such as the internet are opening up new and creative ways for perpetrators to financially abuse elders.

Elder financial abuse affects elders and their families in significant and long lasting ways by putting enormous emotional distress on these elders, increasing their risk of depression, decreasing their quality of life, and increasing the potential for institutionalization. What can you do to protect against elderly financial abuse?  First, any person - elders, family members, or professionals - who suspects that financial abuse of an elderly individual has occurred should immediately report it. There are a variety of precautions that older individuals themselves can take to avoid falling prey to financial abuse including:

1.     Staying Organized: Keep your financial records neat.  Have social security checks, etc., deposited if possible.  Complete and sign your own checks.  Do not provide personal information over the telephone.

2.     Staying Informed: Consult with an attorney about future planning, including implementing a power of attorney.  Know where to go if you suspect abuse.

3.     Staying Alert: Do not leave valuable items out in the open.  Do not sign any document unless someone you trust reviews it.  Do not be left out of decisions regarding your finances.

Oast & Hook has been providing quality legal services in Southeastern Virginia and North Carolina for more than 80 years. The attorneys at Oast & Hook can assist clients with their estate, financial, insurance, long-term care, veterans' benefits and special needs planning issues. Visit their website at for more information.