Elder Law Newsletter
Financial Exploitation of Elders
“Elder abuse” is governed by state law and, as such, its definition varies. Generally, elder abuse constitutes any knowing, intentional, or negligent act by a caregiver or any other person that causes harm or a serious risk of harm to a vulnerable adult. Forms of elder abuse can include physical abuse, emotional abuse, sexual abuse, neglect, abandonment and/or financial exploitation. Elders are financially exploited when an individual illegally takes, misuses, or conceals their funds, property or assets. There are generally two forms of elder financial abuse which include “fraud by strangers” and “exploitation by relatives and caregivers.”
Financial Abuse of Elders: Fraud by Strangers
Although state definitions of what exactly constitutes financial exploitation of elders vary, it is generally the improper use of an elder’s funds, property or assets. There are countless types of “financial” abuse scams that are committed by strangers.
Common financial abuse scams involving elders can include:
- Sweepstakes winner scams – Winner must pay fees or taxes before claiming their “prize.”
- Fortune teller or psychic healer scams – Elder hands over jewelry to have a curse removed or pays cash for “miracle cures” of their poor health.
- Home or auto repair scams – Cash paid to door-to-door solicitor for shoddy or no work.
- Verification of credit card number or Social Security number scams – Numbers are used to make unauthorized purchases.
- Hitting a car in parking lot scams – A stranger smears tar on elder’s bumper while they are shopping and the elder is later blamed for “hitting” their car.
- Cash scams – Elder approached with offer to share found cash or lotto proceeds, but must first hand over their own cash as a show of good faith or to redeem a ticket.
- Gold bar or diamond scams – Offers to purchase “fakes” at a large discount.
- Utility inspector scams – A phony inspector distracts elder while they are burglarized.
- Bank examiner scams – Elder asked to give a cash deposit to a “bank detective” to help catch a “crooked” bank teller.
- Investments – Turn out to be fraudulent or inappropriate for the elderly.
- Loans and mortgages – Usually have exorbitant interest rates, hidden fees and impossible payment schedules.
- Health, funeral and life insurance scams – Overpriced and duplicate existing coverage or offer inadequate coverage.
- Charitable “donations” – Often for non-existent charities or religious organizations.
- Estate planning, living trust or annuities scams – Marketed through a seminar or by a home visit from a “paralegal” to induce the elder to hire a “professional” to prepare unnecessary or expensive estate planning documents or to purchase an annuity.
Financial Abuse of Elders: Exploitation by Relatives and Caregivers
Elders may also be targeted as victims of financial abuse by their own relatives and caregivers. This type of financial exploitation can be more subtle and harder to detect immediately. There are generally three main categories of offenders including adult children, grandchildren or other relatives, professional caregivers and close friends or others in a fiduciary relationship or position of trust. These individuals use their close relationships with the elder to manipulate their way to gaining access to the elder’s finances.
Common methods of exploitation include:
- Taking the elder’s money, property or valuables;
- Borrowing money repeatedly and failing to repay it;
- Denying services or medical care to conserve funds;
- Giving away or selling the elder’s possessions without authorization;
- Signing or cashing pension or Social Security checks without permission;
- Misusing or using without permission ATM or credit cards;
- Doling out the elder’s funds to family or friends; and/or
- Forcing the elder to part with resources or sign over title to property.
Signs of Financial Abuse of Elders
Signs and/or symptoms of financial exploitation of elders can be difficult to identify, but there are several indicators of possible exploitation, including:
- Sudden bank account changes such as unexplained withdrawals of large sums;
- Additional names appearing on an elder’s bank account or signature card without a valid explanation;
- Disappearing funds or valuable possessions;
- Elder receives substandard care despite their adequate finances;
- Elder receives services that are unnecessary;
- Sudden asset transfers or changes in a will;
- Forged signatures transferring titles of property;
- Sudden appearance of previously uninvolved relatives in the elder’s life; and/or
- Elder reports financial abuse.
Reporting Financial Abuse of Elders
All states have laws to protect elders from abuse, including financial abuse, and in many states there are both criminal and civil penalties for the commission of elder abuse. In fact, penalties for the financial abuse of elders are enhanced in many states. All states generally have Adult Protective Service (APS) organizations to which elder abuse may be reported. APS agencies are governed by state law and thus, the procedures and availability of staff to investigate a particular case may vary. Any form of elder abuse may also be reported to law enforcement agencies in any municipality.
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