Could someone you love be a victim of elder financial abuse? Just as you would protect him or her from falls, you’d want to protect against financial injury too.
Financial exploitation “is the most common form of elder abuse and yet only a small fraction of incidents are reported,” the Consumer Financial Protection Bureau noted in a 2019 report.
Estimates of the actual damage range widely. According to one study cited by the agency, seniors lose over $37 billion each year to elder financial abuse and more than a third of seniors are affected by financial abuse in any five year period. This total includes criminal fraud, caregiver abuse, and financial exploitation, where seniors are subjected to high-pressure sales tactics and misleading marketing.
Lawmakers are paying attention. Federal and state governments have begun to pass laws to protect seniors from financial abuse. This is good news.
However, these laws often protect a senior only after someone realizes that an elderly person is being exploited. An elderly person can lose a significant amount of their savings before someone close to the senior realizes what has happened.
In order to stop elder financial abuse, it is critical that those closest to seniors be on the lookout for possible red flags. As a family member or close friend of an elderly person, you may be in the best position to detect early signs of elder financial abuse.
Would you know the signs of elder financial abuse and exploitation? Here are some:
- The elderly person becomes dazed, nervous or fearful when discussing financial matters
- He or she does not remember having requested certain transactions
- The elderly person provides contradictory or questionable explanations for financial transactions
- You observe a significant change in the senior’s financial habits (such as more frequent or larger withdrawals)
- There is the appearance of a new “friend” who is insistently requesting information about the elderly person’s accounts, or who tries to make changes without the senior’s permission. This new “friend” could be an acquaintance, a family member, a health care provider, or even someone the elderly person met on-line.
- The new “friend” or family member refuses to let you speak to the elderly person, or insists on being present when you talk with the elderly individual.
- You may see questionable signatures on documents, or it may appear that numbers on financial documents have been forged or changed.
- You may learn of sudden or unexplained changes in beneficiaries on life insurance policies, or see that there have been unexplained changes of address on an elderly person’s financial statements.
What to do?
If you see any of these signs, it is critical to act quickly.
There are a number of steps that you can take:
- Contact the bank or financial professional who manages the elderly person’s accounts. The bank or financial professional can freeze accounts or take other action. (MassMutual has resources to help its clients with these situations. You can email ElderAbuse@massmutual.com with questions).
- Contact the Adult Protective Services agency in your state. Like Child Protective Services agencies, Adult Protective Services agencies are created to protect elderly and vulnerable adults. You can find an office near you here.
- Contact your local police department if you believe that the elderly person has been a victim of fraud.
- Finally, if the elderly person has another trusted contact such as an attorney or accountant, he or she may be able to help.
Of the $37 billion seniors lose through elder financial abuse, $13 billion was in criminal fraud, $7 billion in caregiver abuse, and $17 billion in other general financial exploitation. Keeping an eye out for red flags of elder abuse can help protect the ones you love.
Learn more from MassMutual…
This article was originally published in February, 2016. It has been updated.