Financial exploitation of older adults is emerging as one of the most prevalent forms of elder abuse, according to “Elder Financial Exploitation,” a report from the U.S. Securities and Exchange Commission (SEC). Why are older adults an appealing target for financial abuse?
Cognitive decline is a key factor that makes older adults more vulnerable. But other factors are at play as well, such as the good chance that older people have more wealth or savings. Yet the elderly poor have an even greater chance of being targeted for financial exploitation, according to the SEC report.
As our parents grow older, they become more vulnerable to various forms of exploitation, including financial abuse. Protecting aging parents from financial exploitation is of utmost importance to ensure their well-being and security. In this article, we will explore the different types of financial exploitation, warning signs to watch out for, and steps you can take to safeguard your aging parent’s finances. Let’s delve into this crucial topic and learn how to protect our loved ones from elder abuse.
Aging parents often face an increased risk of financial exploitation due to their vulnerability and potential cognitive decline. Financial exploitation refers to the unauthorized or improper use of an individual’s funds, property, or assets, which can lead to significant financial losses. Understanding the various types of financial exploitation is the first step toward protecting our aging parents.
Understanding Financial Exploitation of Aging Parents
Financial exploitation can occur through different channels, with varying perpetrators. It is essential to be aware of these tactics to prevent and address any potential exploitation. The three primary types of financial exploitation are:
Exploitation by Family Members
Unfortunately, financial abuse can be perpetrated by those closest to the aging parents. Family members, including adult children or grandchildren, may exploit their access to their parents’ financial resources for personal gain. This can involve using their funds without permission, coercing them into changing their wills, or pressuring them to transfer assets.
Exploitation by Caregivers
Caregivers, whether hired professionals or family members, may have access to an aging parent’s finances and exploit that trust. They may engage in unauthorized use of credit cards, steal money or valuables, or manipulate the parent into giving them control over their financial affairs.
Exploitation by Scammers
Scammers specifically target older adults, taking advantage of their trust and limited knowledge about modern financial schemes. They employ various tactics such as phone calls, emails, or even door-to-door visits to deceive aging parents into providing sensitive financial information, making fraudulent investments, or falling victim to identity theft.
Warning Signs of Financial Exploitation
Detecting financial exploitation early is crucial for preventing further harm. Look out for the following warning signs that may indicate your aging parent is being financially exploited:
Unexplained Financial Transactions
Keep an eye out for sudden or unexplained withdrawals, transfers, or large purchases made by your aging parent without a reasonable explanation. These transactions may be a result of coercion or manipulation by an exploiter.
Changes in Banking or Investment Patterns
If your aging parent suddenly changes their bank or investment accounts, it could be a red flag of financial exploitation. Exploiters often convince vulnerable adults to switch to accounts they control, making it easier for them to gain unauthorized access to funds.
Missing Money or Valuables
Discrepancies in financial records, missing cash, or unaccounted-for valuables can point towards financial exploitation. Exploiters may take advantage of an aging parent’s vulnerability to steal money or valuable possessions discreetly.
Sudden Financial Dependence on Others
If your aging parent, who was previously independent, suddenly becomes financially dependent on another person without any logical reason, it could indicate exploitation. Exploiters often manipulate their victims into relying on them for financial support, isolating them from their usual support networks.
Steps to Protect Aging Parents from Financial Exploitation
To safeguard your aging parents from financial exploitation, consider implementing the following proactive measures:
Open Communication Channels
Maintain open and honest communication with your aging parents about their finances. Encourage them to share their concerns, financial decisions, and any suspicious activities they may have encountered.
There’s no need to come across as an interrogator when asking Mom or Dad about finances. After all, this is the person who raised you, who deserves the respect of being treated as an adult, not as a child in need of supervision or guidance.
Instead, ask where you can locate financial and estate documents and account passwords if the parent becomes incapacitated or needs assistance paying bills. Ask how things are going financially and if your parent needs help with any financial or legal matters.
If your parent has an illness or disease such as dementia, Alzheimer’s or other types of cognitive decline, you may need to be more assertive or involved. However, keep in mind that your mom or dad probably wants to remain independent when it comes to finances for as long as safely possible.
Stay Involved in Their Financial Matters
One of the best things you can do to prevent someone financially exploiting a parent is to be involved in his or her life. You probably won’t notice if your parent is behind on paying bills, making large or suspicious purchases or transferring funds to someone you don’t know if you only come around every few months or during the holidays.
Be actively involved in your aging parent’s financial affairs. Review their bank statements, investment portfolios, and legal documents regularly. This involvement ensures that you are aware of any unusual transactions or changes that may signal financial exploitation.
Visit frequently and listen to what’s going on in your parent’s life. If you live far away, call often and take time to have a good conversation with Mom or Dad. Listen carefully for any mention of loaning money to someone, taking out a loan, forgetting to pay a bill or other red flags.
Find out: How Seniors’ Bank Accounts Are Protected From Garnishment
Educate Them About Scams and Exploitation
Help your aging parents become aware of common scams and exploitation techniques targeting older adults. Educate them about the importance of protecting their personal information, not engaging with unsolicited requests, and verifying the legitimacy of financial offers.
Check out new “friends”: Does Mom have a new friend you’ve never met who visits frequently? Does Dad talk about a new buddy he met at the grocery store who is suddenly becoming a big part of his life? If these people are genuine friends with something positive to add to your parent’s life, great. However, your parent’s new “friend” could instead be an opportunist who sees an older person as a potential target for financial exploitation.
Try to meet your parent’s new friends to get a feel for their character and intentions. Swing by when the person is visiting or suggest that you all go to lunch. Keep an eye out for any suspicious activities or financial transactions.
Run background checks on caregivers: Always perform a background check, including the applicant’s driving record and credit report, on a potential caregiver. You don’t want to unwittingly hire a convicted felon with a record of theft or someone with a string of DUIs to drive your parents to doctor’s appointments and on errands around town.
Contact your local state police for information on how to run a thorough background check that includes criminal and credit history. Important: Before performing a background check on a caregiver, you are legally required to obtain written permission from that person.
Establish Power of Attorney or Guardianship
If a parent is slipping on paying monthly bills on time, offer to assist with completing the task each month. This doesn’t mean using your own money to pay their bills. Let Mom or Dad know that you are happy to get online and use your parent’s credit card or bank account – with their permission – to make sure all the bills are paid on time.
Consider helping your aging parents establish a power of attorney or guardianship. These legal mechanisms allow a trusted individual to make financial decisions on their behalf, providing an added layer of protection against potential exploitation.
If your parent is resistant, start out with a minimal offer, such as paying only the utility bills. Once your parent no longer has that worry, he or she may welcome the assistance.
Find out: Who Is Responsible for a Deceased Parent’s Debt?
Monitor Their Accounts Regularly
Regularly monitor your aging parents’ bank accounts, credit cards, and other financial statements for any suspicious activity. Promptly address any unauthorized transactions or signs of exploitation.
Next time you visit, keep an eye out for past-due notices or unopened bills. If your mom or dad is falling behind on bills, that could be a sign of memory loss, a medication that needs to be adjusted, or secret financial troubles.
If you notice red flags of a parent paying bills late or not at all, ask him or her about it in a non-confrontational way. Maybe it’s a one-time oversight. Or, maybe it’s a sign you need to remind or assist your parent with paying the bills on time.
Seek Professional Assistance
Consulting with financial advisors, attorneys specializing in elder law, or geriatric care managers can provide valuable guidance and support in protecting your aging parents’ finances. These professionals can help you establish safeguards, identify potential risks, and take appropriate legal measures if exploitation occurs.
Connect with a certified credit counselor to review your options.
Legal Recourse for Financial Exploitation
If you suspect your aging parents have been victims of financial exploitation, it is crucial to take immediate action. Consider the following legal steps:
Reporting to Authorities
Contact local law enforcement or Adult Protective Services to report the financial exploitation. They can guide you on the appropriate steps to take and help investigate the matter further.
Seeking Legal Protection
Consult an attorney specializing in elder law to explore legal options for protecting your aging parents from further exploitation. They can assist with obtaining restraining orders, seeking conservatorship, or pursuing other legal remedies.
Find out: Why Most Seniors Don’t Need to Be Afraid of Judgements From Debt Collectors
Pursuing Civil Action
In cases of financial exploitation, civil lawsuits can be filed against the perpetrators to recover the stolen assets and hold them accountable for their actions. Consult with an attorney to assess the feasibility of pursuing civil action.
Community Resources for Support and Prevention
Various community resources exist to support the prevention and detection of financial exploitation of aging parents. Consider utilizing the following resources:
Adult Protective Services
Contact your local Adult Protective Services agency to report suspected elder abuse or to seek guidance on protecting your aging parents. They can provide social services, conduct investigations, and connect you with other relevant resources.
Senior Centers and Support Groups
Engage with local senior centers or support groups that focus on financial education and elder abuse prevention. These organizations often provide workshops, counseling services, and a network of individuals who share similar concerns.
Financial Education Programs
Look for financial education programs specifically designed for older adults. These programs aim to enhance their understanding of financial matters, scams, and exploitation, empowering them to make informed decisions.
Fraud Hotlines and Helplines
Many organizations, such as the National Center on Elder Abuse, offer helplines dedicated to reporting fraud and providing assistance to victims and their families. Save these helpline numbers for quick reference in case of emergencies.
FAQs
How common is financial exploitation of aging parents?
Financial exploitation of aging parents is unfortunately quite common, with studies indicating that millions of older adults are affected each year. The true extent of the problem may be even higher, as many cases go unreported.
What are some red flags of potential financial exploitation?
Signs of potential financial exploitation include unexplained financial transactions, changes in banking or investment patterns, missing money or valuables, and sudden financial dependence on others.
What legal measures can be taken to prevent financial exploitation?
Legal measures to prevent financial exploitation include establishing power of attorney or guardianship, staying involved in financial matters, and seeking professional assistance from attorneys specializing in elder law.
Are there any resources available for reporting financial exploitation?
Yes, there are resources available for reporting financial exploitation. You can contact local law enforcement, Adult Protective Services, or helplines dedicated to reporting fraud and elder abuse.
How can I ensure my aging parents are financially secure?
To ensure your aging parents are financially secure, maintain open communication, stay involved in their financial matters, educate them about scams, monitor their accounts regularly, and seek professional assistance when needed.
Protecting aging parents from financial exploitation requires vigilance, open communication, and proactive measures. By staying involved in their financial matters, educating them about scams, and seeking professional assistance, we can significantly reduce the risk of elder abuse. Remember, early detection and intervention are key to safeguarding our loved ones’ financial security and overall well-being.
