How to identify & prevent elder financial abuse.

How to identify & prevent elder financial abuse.

One week from today millions of Americans will be celebrating Thanksgiving with family and loved ones. For many of us, we will be visiting with elderly family members. With that in mind, November is National Family Caregiver Month, which reminds us that it’s a good time to talk with older relatives about their finances.

The American Bankers Association Foundation also advises people to be aware of “warning signs” that an older loved one might be targets of financial abuse or fraud. Older adult financial abuse is becoming an increasingly more common and costly problem affecting victims, their families and our nation as a whole. How can you know if corrupt people or advisors are victimizing your elderly loved one? There are several indicators that an older adult has become the victim of elder abuse.

Here are some signs of elder financial abuse or exploitation courtesy of the National Community Reinvestment Coalition (NCRC)  “which was formed in 1990 by national, regional, and local organizations to develop and harness the collective energies of community reinvestment organizations from across the country so as to increase the flow of private capital into traditionally underserved communities.”   

Be aware of:

• Unusual banking activity such as large or unexplained withdrawals or payments outside of a normal bill pay.
• Abnormal signatures that look different than usual, are on checks written by someone else, or are created at a time when an older adult cannot physically write.
• Excessive gifts or donations to caregivers, new friends, or newly formed charities.
• Large investments or loans that may have been used to finance investments in time shares, properties or annuities.
• Changes to power of attorney, property titles and wills that remove the older adult or add a caretaker, often made when older adult is unwell or not mentally competent.
• Memory related mistakes, such as unpaid bills, lack of proper nutrition or hygiene, or increased instances of misplacing or losing personal belongings.
• Lack or reduction of care provided by relatives or caregivers in order to “conserve” money.
• Sudden interest or affection by long-lost relatives, caregivers or new friends.
• Loss of control over finances, for example bank statements no longer coming to the older adult, or older individual is not aware of or does not understand their current financial arrangements.
• Unopened mail or spoiled food.

There are a number of ways in which older adults are tricked out of their money by strangers. Some of the more common types of abusive scams and fraudulent practices include:

• Lottery and sweepstakes scams where an older adult is informed that they have won the lottery and must send in money to cover mailing and other related expenses before receiving winnings.
• Grandparent scam in which someone calls an older adult claiming to be their grandchild and asks for money to get out of an emergency situation.
• Internet phishing for account information, often done by emailing an older person with a false claim from a bank and then asking for personal account information.

Trusted professionals can also drain an older adult’s account through methods such as:

• Predatory Lending where older adults are convinced to take out harmful or unnecessary loans.
• Variable Annuities that will not mature until much later in their lifetime when an older adult would be in their 90s or over 100.
• Investment schemes that promise unrealistic returns on investments.
• Identity theft where individuals who receive an older adult’s information might use it to fraudulently open credit cards or steal from the older person.
• Roof repair, yard work, home repair scams where work is not done or badly done, yet the homeowners might be charged excessive amounts for the work.
• “Financial Certifications” that have no real meaning, but are used to engage older adults into allowing these so-called financial planners and advisors to handle their finances.
Friends and family members are often trusted to help manage an older adult’s finances and may abuse that role by using methods such as:
• Power of Attorney and joint/custodial bank accounts in which family members, after obtaining power of attorney or opening a joint/custodial bank account with the victim, might use them to steal money for their own use. In addition, family members might use ATM cards and checks to withdraw money from an older adult’s account.
• Threats of abandonment or physical harm unless the older adult gives the family member money.
• Neglect to care for the older adult, potentially using the victim’s money for personal needs.

Hera are some general recommendations and guidelines to help older adults avoid financial exploitation include:

• Use only trustworthy people and organizations when making financial arrangements and decisions.
• Get everything in writing; do not take verbal assurances.
• Take time before making decisions, do not sign a document or make purchases or donations over the phone or online without careful consideration.
• Do not send money by cash or make wire transfers.
• Lock financial documents and information in safe places at home and at work.
• Ask why someone needs your personal or financial information before you share it.
• Become familiar with up to date information on scams and frauds available through the Consumer Financial Protection Bureau Office of Older Americans.

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