The financial abuse of older people is a serious problem. What can you do to protect elderly friends and relatives?
Financial abuse of older adults is a silent, but sadly widespread and potentially devastating problem. According to a 2008 study from the charity Help the Aged, now called Age UK, financial abuse of people over the age of 66 is the second-most prevalent form of mistreatment of the elderly in the country, after neglect.
A 2016 report by The National Centre for Victims of Crime in the US, found that financial exploitation of the elderly by a family member is almost three times more prevalent than physical mistreatment. It also found that nearly half of people with dementia are abused or neglected by their caregivers.
Financial abuse is particularly insidious because it can so easily go unnoticed.
It refers to the unauthorised use of an older person’s money or property, or the abuse of a position of power or trust to influence an older person’s financial decisions. It can take many forms, including theft, fraud, coercion, misuse of power of attorney, and identity theft.
Vulnerability
Older adults are particularly vulnerable because they may be isolated, physically or mentally impaired, or dependent on others for care. They may also be less likely to report abuse due to fear of retaliation or shame.
This not only leaves them prone to being caught in scams, but also at risk of being abused financially by relatives and those who should be caring for them.
As the Help the Aged study noted:
“Financial exclusion, low levels of financial capability, and cognitive impairment can mean that older people become dependent upon others to manage their finances or to access their income or savings. While in the majority of cases family, friends and professionals are trustworthy, calls to the Action on Elder Abuse helpline show that the vulnerability of some older people, or their reliance on others for assistance, can easily be abused.”
Warning signs
Financial abuse has a range of negative impacts on older adults. As a 2000 study of crime against older Australians noted:
“Financial exploitation has a devastating effect on older people. Not only can a comfortable lifestyle disappear, but also older people do not have the time or opportunity to recover financially. In addition, such a profoundly disturbing experience can be a life-threatening event characterised by fear, lack of trust and the onset, often, of acute and chronic anxiety.”
Friends and relatives should therefore be alert to warning signs that someone is being targeted. These include unusual or unexplained withdrawals from bank accounts, sudden changes in wills or powers of attorney, and even unexplained transfers of assets or property.
Unfortunately, however, the signs are not always so obvious. Caregivers that hang onto an elderly person’s bank card for “safe keeping” for example, or a child that moves a parent into sheltered accommodation in their “best interests”, but then takes the proceeds from the sale of the property, are harder to detect.
In these cases, it’s more important to be aware of who might be most at risk for financial abuse. These are particularly those who are socially isolated, cognitively impairment, and who have a history of abuse or trauma.
Getting help
If you suspect that an older adult is experiencing financial abuse, it is important to report your concerns to the appropriate authorities. You can contact your local Adult Social Services or the police. You can also seek assistance from organisations that specialise in helping older adults who have experienced financial abuse, such as Age UK or Action on Elder Abuse.
To prevent financial abuse, it is important to help older adults to be aware of common scams and to take steps to protect themselves. This includes encouraging them to be cautious about giving out personal information, verifying the identity of people who ask for money or personal information, and seeking advice from a trusted professional before making financial decisions.
Reducing isolation can also be a powerful antidote. Social exclusion increases the potential for financial abuse, so ensuring that elderly friends and relatives are part of a strong community can be a significant step.
Registering a lasting power of attorney well before it might actually be needed is also an important prevention strategy. As is ensuring that your elderly friends or relatives have the support of a trusted financial adviser who can be relied upon to act in their best interests at all times.
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TEBI’s principal partner in the UK is Sparrows Capital. We also have a strategic partner in Ireland — Biograph Wealth Advisors, a financial planning firm in Dublin.
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