Seniors have increasingly become the targets of shady con artists. An estimated 5 million elderly persons are victimized each year—losing a staggering $36.4 billion dollars. We have all heard of scams in which strangers pose as IRS agents, Social Security personnel, or grandchildren in some kind of distress. However, there is another kind of financial exploitation that is less commonly discussed: family member fraud. Even those who are hyper-alert to attempts by strangers to steal their money or personal information, can be cruelly exploited by those who profess to love and care for them.
How common is this problem? Writing in Psychology Today Dr. Stacey Wood, Ph.D., a leading expert on financial elder abuse and fraud, says “[r]oughly 6 in 10 cases of elder financial abuse are committed by relatives and 3 in 10 cases are traced to friends, neighbors, or home care aides. Because the abuse often happens over a long period of time, the amounts stolen tend to be higher than amounts in other forms of fraud against seniors.”
Experts in the field of elder financial abuse say that premeditated plans to steal from an elderly family member are rare. More likely, family fraud starts small and with a feeling of entitlement. For example, it could be the grandchild who picks up groceries for her grandmother may feel she is owed some compensation for her efforts. While there is nothing inherently wrong with being paid for these kinds of services, payment should be planned, upfront, and everyone should be aware of it. In many cases those who are financially abusing a family member believe that they will inherit the money anyway and so there is nothing wrong with taking an “advance.” In many cases what starts a small amount of money taken here and there often grows to become thousands of stolen dollars.
There are “red flags”—warning signs—which may signal that someone you care about is being financially exploited, says Dr. Wood:
- “A new ‘friend’ or a previously distant child or other relatives suddenly becoming close to the senior.
- A friend or relative in the person’s life who has addiction issues, financial difficulties, or a history of criminal activity.
- Having trouble paying bills or making purchases (food, clothing, medicines) that they could previously afford.
- A relative or caregiver acting as “gatekeeper” toward other family members, and avoiding having visitors or direct phone contact with the elderly person.
- Complaints of mislaid or missing items in the household, or suspicious transactions in bank or investment accounts that the senior cannot explain.
- A decline in mental acuity that can make them more vulnerable to being taken advantage of.
- A decline in physical health that can make the elder more dependent on others for transportation, home repairs or chores they previously did themselves, or personal care — all ways that someone with bad intentions can gain access to the person and their finances.
- Changes in legal paperwork, including power of attorney, will, property deed or automobile title, or additional names on bank accounts.
There are steps seniors and their families can take to prevent financial exploitation. AARP.org offers this advice:
- “When a person is still mentally sharp, help him or her make a plan that designates power of attorney and health care directives.
- Stay connected with older loved ones through regular phone calls, visits or emails.
- Develop a relationship with your parent’s caregiver. ‘They’ll be less likely to financially exploit Mother because they know you’re paying attention,’ [according to Bonnie Brandl, director of the National Clearinghouse on Abuse in Later Life.]
- Become a ‘trusted contact’ to monitor bank account and brokerage activity.
- Sign up for a service such as EverSafe to track financial activity and notify an advocate of unusual withdrawals or spending.
- Set up direct deposit for checks so others don’t have to cash them.
- Do not sign any documents that you don’t understand.”