Financial abuse is the theft or embezzlement of money or any other property from an elder. It can be as simple as taking money from a wallet and as complex as manipulating a victim into turning over property to an abuser. This form of abuse can be devastating because an elder victim’s life savings can disappear in the blink of an eye, leaving them unable to provide for their needs and afraid of what an uncertain tomorrow will bring.
There are a variety of forms of financial elder abuse. Some are perpetrated by people who do not know the victim, such as telemarketing fraud or identity theft. However, some forms of abuse are carried out by family members or caregivers. In some cases, the abuse is as complex as a child convincing a parent to put property in his or her name so that, when the parent dies, the child owns the property outright (to the detriment of other siblings), or convincing an elderly person to buy something they cannot use, such as convincing an elderly person to buy a lifetime membership in a gym. In other cases, it is as simple as stealing money from the senior’s wallet when he or she is not looking. This is compounded with situations involving dementia.
Other potential financial abusers could include conservators, agents acting under durable powers of attorney, trustees, representative payees, financial planners, attorneys, family members and friends. Before a lawsuit is possible, investigation must take place to determine the extent, if any, of any abuse, particularly those having marginal evidence.
Recognizing the Warning Signs
The existence of any one or more of these indicators does not necessarily mean that abuse has occurred. Instead, treat them as signs that diligent attention or investigation is needed.
Behavioral warning signs:
- Withdrawn
- Confused or extremely forgetful
- Depressed
- Helpless or angry
- Hesitant to talk freely
- Frightened
- Secretive
Isolation warning signs:
- Elder is isolated or lonely with no visitors or relatives. Family members or caregiver isolate the individual, restricting the person’s contact with others.
- Elder is not given the opportunity to speak freely or have contact with others without the caregiver being present.
Other warning signs include:
- Unusual bank account activity, such as withdrawals from automatic teller machines when the individual cannot get to the bank.
- Signatures on checks and other documents that do not resemble the elder’s signature.
- Checks or other documents signed when the elder cannot write or understand what he or she is signing.
- Lack of personal amenities – appropriate clothing and grooming items.
- Numerous unpaid bills when someone else has been designated to pay the bills.
- Change in spending patterns, such as buying items he or she doesn’t need and can’t use.
- The appearance of a stranger who begins a new close relationship and offers to manage the elder’s finances and assets.
OTHER TYPES OF SCAMS:
While financial elder abuse can take many forms, the most widespread abuses include telemarketing fraud, identity theft, predatory lending and home improvement and estate planning scams.
Telemarketing fraud:
Americans lose an estimated $40 billion each year due to the fraudulent sales of goods and services over the telephone. AARP has found that 56% of those called by telemarketers are aged 50 or older.
It can be extremely difficult to tell if a telemarketing call is legitimate. This is especially true if you are being pressured to make an instant decision; for example, to send money right away in order to claim a prize that has been won. Scams can range from prize offers to travel packages to phony charities.
Be wary of telemarketing sales pitches such as these:
- “You have won a lottery, but in order to claim the money, you must send a payment to pay the taxes on the money you have won.”
- “We can give you a great home loan at a great price, regardless of your credit.”
- “We are offering you a fantastic buy on your favorite magazines; this is the last day and we must receive your money by midnight to guarantee this offer.”
Remember: It is very difficult to tell if a telemarketing call is legitimate. Be cautious and do not let any caller intimidate you.
Identity theft:
Identity theft is a frightening and fast-growing crime. There are more than 500,000 new victims each year. It is an easy crime to commit because every identifying number an individual possesses – Social Security, credit card, driver’s license, telephone – is a key that can unlock some storage of money or goods.
Identity thieves can obtain your personal information easily, not only by stealing your wallet, but also by taking mail from your mailbox, going through your trash for discarded receipts and bills or asking for it over the phone on some pretext. The identity thief can also get your personal information by watching your transactions at automated teller machines and phone booths to capture your personal identification number. Social Security numbers can even be bought on the Internet for as little as $20 each!
How to protect yourself from identity theft:
- Dispose of papers with personal information by tearing up charge receipts, bank statements, expired credit cards or offers for new credit cards.
- Never give out your Social Security number unless you have initiated the contact and you are familiar with the institution. Do not have your Social Security number printed on your checks.
- Do not give any of your personal account numbers over the phone unless you have placed the call and know the individual with whom you are speaking.
Home improvement scams:
Home improvement scams are often committed by groups of individuals who go door-to door in an effort to sell “home improvement” services. Often, they come into a neighborhood and offer to repair a driveway or re-shingle a roof which they claim is in immediate need of repair. They promise to do the work for a very low fee if the individual agrees to have the work done immediately. When the victim agrees, he or she discovers the fee is much higher after the work has been completed or that the work was done using inferior materials. Quite often the scam artist will do the work for a low fee for one resident in a neighborhood to create a referral in the area to draw in other victims.
It is important to remember that often these individuals can do more than overcharge or perform shoddy work. Sometimes one individual will work outside and another may go into the house for a drink of water and then steal valuables. Far too often the victim does not know the items are missing until the criminals are gone.
Predatory lending:
More than 80% of Americans aged 50 and older are homeowners. Elders are often the target of unscrupulous lenders who pressure them into high-interest loans they may not be able to repay. Older homeowners are often persuaded to borrow money through home equity loans for home repairs, debt consolidation or to pay health care costs. These loans are sold as a “miracle financial cure,” and homeowners are devastated to find out they cannot afford to pay off the loans and, as a result, may lose their home. Often these loans are packed with excessive fees, costly credit insurance, pre-payment penalties and balloon payments.
Estate planning hazards:
“Estate planning” is the ordering of one’s affairs so that personal and financial matters will be taken care of upon death or incapacitation. Estate planning devices may include wills, trusts, powers of attorney, advance health care directives and joint tenancies.
People can take advantage of the power given to them in estate planning devices. For example, a “Power of Attorney” works well if it contains clear directions that reflect your wishes and vests your care and well-being with a reliable individual. On the other hand, a “Power of Attorney” can lead to elder abuse if it grants power to a person with no interest in protecting you. Powers of Attorney can be used to take money from your bank, transfer property and even have you involuntarily placed in a long-term care facility.
- Telephone/email scams: the senior is contacted by someone requesting money in the form of deposit or upfront tax payment on money to be given to the senior later. The senior pays the deposit but never receives the money. These scams are sometimes referred to as lottery scams.
- Pigeon drop: the senior is approached by someone claiming to have a lot of money but unsure of what to do with it. The scammer agrees to leave the money with the senior in exchange for a “good faith” deposit of money. The scammer leaves with the money and the senior is left with fake money.
- Investment scams: the senior is convinced to invest his or her money in a variety of scams and schemes including a Ponzi scheme, pyramid scheme or fake real estate investment.
- Sweetheart swindle: the senior is befriended by a perpetrator who agrees to either marry or take care of the senior. The perpetrator, who says he or she will be receiving a large amount of money soon, then claims to require money for a family emergency and asks for a loan from the senior to be paid back once the scammer’s own money comes through.
- Imposters: the senior is approached by people who appear to be employees of a utility company and who say they need access to the home. Once they obtain access, the perpetrators steal the senior’s property.
- Other scams targeting seniors include funeral and cemetery fraud, in which funeral homes add unnecessary charges and fees to a funeral; fraudulent anti-aging products, seniors are sold fake anti-aging products and reverse mortgage scams, in which scammers steal equity from a senior or use the senior to steal equity from another property.