Elder Financial Abuse

If your loved one saved during their working years, they may now have a solid nest egg. They might also think their money is in a good spot.

For many Americans, retirement is a chance to enjoy that hard-earned stash. They might have a bucket list to go through, a dream cruise to board or a cottage by a lake to spend time in. As more of the population moves into the golden years, the amount of wealth is growing too. Older Americans have added $14 trillion in net worth since 2019 according to Bloomberg.¹

While there are many rays of sunlight that can make this stage of life truly golden, it is also a time that brings change. Your aging loved one might now have a neighbor walk the dog, rather than take the pet out themselves. A relative could look at their checking account once a week or once a month, just to see that things are in order. A family member may offer to help pay bills online. They might also help an elderly person track their savings, Certificates of Deposit or other retirement accounts.

During this shifting time, as others enter the life of your loved one, these acquaintances might want more than just friendship or a relationship. They may seek a piece of the senior’s retirement pie. Elder financial abuse can and does occur every year and often unfolds in surprising ways. It could happen with a few hundred dollars taken from a checking account. It could also occur by having thousands stolen from a retirement account. If you are concerned your aging relative’s funds are not safe, there are steps you can take to protect them. When someone looks for ways to steal money from older people, it is called elder financial abuse. To protect a senior’s nest egg, it can be helpful to look at what this type of financial abuse is and what can be done to reduce the risk of it happening to you or a loved one.

What constitutes elder financial abuse?

Financial abuse may be subtle or overt but in general, includes tactics to conceal information, limit the victim’s access to assets, or reduce accessibility to the family finances.² When this happens to an older person, it is called elder financial abuse.³ It could be done by someone who asks for money, pretends to be the elderly person for their own financial gain or steals their valuables.

It often happens in ways that are unexpected, such as the following:

• Stolen cards: Someone might steal a senior’s debit or ATM card. They could then take out money from the elderly person’s checking accounts or savings account. They could also use a credit card to make a purchase, such as buying an item online.

• Blank checks: A caregiver or family member could take a senior’s unused checks out of their checkbook. They might then write a check out themselves and forge the older person’s signature.

• Extra purchases: Someone a senior knows, like a friend or relative, might offer to help buy some house supplies online. Instead of just paying for the paper towels the elderly person needs, they might also buy some things for themselves without the person knowing about it.

• False charity: A person could ask a retiree to pay them $5,000 that they will give to an animal shelter. If the senior supports this type of charity, they might contribute to this cause. Instead of donating the money, the thief keeps it.

• Unfulfilled work: A person might offer to help redo a retiree’s deck and yard for $10,000. When they receive the money, they never do the job.

What types of elder abuse are most common?

There are many different types of elder financial abuse. When and how this type of fraud takes place can vary. Elder financial abuse can occur through:

• Fake government-related scams. A person might call or knock on a retiree’s door. When they answer, the stranger might say they are from the IRS and need to talk about taxes. Or the thief could say they want to go over Medicare and Social Security benefits. They will often ask for personal information, like a Social Security number or bank information. They might also ask the elderly person to make a payment.⁴

• Grandparent scam. A person calls and says they are a senior’s granddaughter or grandson. They may say they are in a tight spot and need money right away. They might ask the senior to send a gift card or mail some cash. They may also ask for information about a savings account so they can get online and transfer some funds for themselves.⁴

• Lottery or sweepstakes scam. A person knocks on your loved one’s door or calls them on the phone. They say the elderly person has won a great deal of money. Before they can send it, however, they might say the senior has to make a payment. This could be something to help cover the cost of the prize, or an amount to be able to access the full reward. They might also ask for personal information.⁵

• Romance scam. It may start out with roses or friendly phone calls. Maybe a senior meets someone online and agrees to get together to play cards. Over time, the individual might ask for a little bit of help to cover a hotel cost, medical emergency or car repair.⁶

Red flags of elder financial abuse

To help protect yourself or a loved one, it can be helpful to look for warning signs of financial abuse. You might watch for the following red flags, as they could indicate potential financial fraud:

• Missing checks
• Checks paid/negotiated that are out of sequence
• Unexplained withdrawals or wire transfers
• Confusion about account balances
• Confusion about financial transactions
• Signatures that seem suspicious or forged
• A relationship with a new best friend or sweetheart
• Changes in behavior, such as fear, submissiveness and withdrawal
• A third party who provides coaching to an elderly person
   

What’s the elder abuse law?

The government has recognized that older people can be affected by elder financial abuse. Every year, it is estimated that criminals steal $28.3 billion from seniors.⁷ With that in mind, the government has passed both federal and state laws to help protect retirement money.

There are federal laws that are set up to let financial firms respond to suspicious activity. For instance, an older person might keep some of their retirement money in an account. If a request is made to take out some funds and the firm thinks it may be suspicious, they may hold the money until they can confirm the transaction. Another federal law lets a financial firm communicate with an elderly person, or the person who should be contacted for the account, if it suspects financial abuse. There are state laws in place that also allow firms to temporarily hold funds if a crime is suspected.⁸

While these laws have been made to help protect funds, some seniors don’t report financial abuse. In fact, only 1 in 24 cases of elder financial abuse is ever reported.⁹ Some of the reasons for this might include that they might feel embarrassed. It could be difficult to know a family member was thinking of stealing. And it also might be hard to see the warning signs if you don’t know what to look for.

How can you protect yourself or a loved one?

Just understanding that elder financial abuse takes place can be a step toward keeping your loved one safe. One in ten elderly Americans are abused each year.¹⁰ The thieves may be someone the senior already knows, like a relative or close friend. A person that offers to help might not have the elderly person’s best interest in mind. Criminals could also sort through personal information online to try to tap into accounts. If elder financial abuse is suspected, there are trustworthy resources who can help the senior check financial records.

To avoid having it happen, it can be useful to keep several points about elder financial abuse in mind.

• Be aware that it might not be a stranger. More than half, at 66%, of financial abuse is committed by someone the victim knows.³ This doesn’t mean that everyone who helps an elderly person with money will try to commit a crime. If a relative or close friend, however, looks at your loved one’s accounts, you might want to keep an eye on the accounts yourself.

• Check on suspicious calls or visitors. Someone might knock on their door and wear a big smile. It can be a good idea to still ask questions. If the person asks your loved one for personal information or money, you may decide to be wary of their intentions. You might ask what company they represent and call the company yourself.

• Encourage online safety. It may be best to keep names, places or words connected to your loved one’s personal information out of their online passwords. If they use the name of their cat in passwords, a thief might notice their pet on social media and then use the information to access their accounts.

• Ask for help. You might decide to ask questions if you suspect financial abuse. You can assist your loved one with calling the bank or credit card company. A financial advisor could help your loved one go over accounts and statements to make sure everything is correct.

What to do if you or your loved one is a victim of elder financial abuse

If you find that money has disappeared from your relative’s checking account, and they don’t know how, you might decide to help them. And if your loved one calls you and says some money is missing and they don’t know where it went, you could offer to assist them. You might consider:

• Asking a trusted source: If the elderly person isn’t sure what happened to some funds, you can help them call the bank or a financial advisor managing the accounts. You might decide to ask about the financial records to see if you can find a path for the funds.

• Contacting the police: If you suspect fraud has taken place, you can get in touch with officials in your area. You might decide to call the National Adult Protective Services for help.

The U.S. government provides many resources that can be used to help spot financial abuse of the elderly. There are both national and local resources that can provide support and guidance.

• National Adult Protective Service Association

• United States Department of Justice

If you think something suspicious is going on with your loved one’s finances or someone is trying to access your aging relative’s personal information, it can be worthwhile to contact the police or a trusted family member. Taking action quickly might help keep your loved one’s money safe. Carrying out steps now can help keep your loved one’s nest egg the way it should be–protected and ready to use when they need it.