A new neighbor moves in next door to a senior who lives alone. The new neighbor strikes up a friendship with the senior – bringing over home-baked goodies, accompanying her on shopping trips, calling during snowy or stormy weather to make sure that she has enough heat…
One day, a few months into their friendship, the neighbor asks for a loan. A sizable loan. The senior, feeling close to her friend and grateful for all the help and warmth she’s received, transfers the money immediately. A week later, the neighbor has moved away. And the senior never sees her neighbor or her money again.
A man goes through a messy divorce with custodial battles, loses his house and moves in with his elderly father.
The son has no other financial resources, and eventually he issues an ultimatum. “Dad,” he says, “either you give me more money – or I won’t ever take you with me when I go to visit your grandkids.”
A senior meets with the representative of an emergency medical services provider. The sales rep emphasizes how critical it is that she have this extended coverage. The senior looks over the contract, but it’s long with a lot of fine print, and she says that she’d like to take it to her adult children and have them look it over before she makes a decision.
“Ma’am,” says the representative, “I urge you to sign now. This is the price for the service today. It’s not guaranteed that it will be as low tomorrow. And if I were in your situation, I wouldn’t go 24 hours without this kind of coverage. It’s just not safe.”
The senior reluctantly signs on the dotted line. She does talk about it the next day with her daughter, who suggests that a different provider would be better for her needs. But when the senior calls the provider back, she finds out that she cannot back out of the 5 year contract. That clause was in the fine print.
Financial abuse of seniors has faces as varied as the situations above… and then some.
In a 2005 survey of seniors in Israel, 6.6% of respondents reported financial exploitation.
In 2010, changes were made to Israeli consumer protection laws because of numerous complaints by seniors who had been exploited by commercial companies established to prey on an aging population.
Unfortunately, consumer protection laws cannot protect seniors from those most likely to be the abusers: family members and trusted others. While any family member might end up being the perpetrator of abuse, those most at-risk for abusing include those who:
- Are desperate for finances due to gambling, substance abuse or other financial problems
- Are afraid the senior will use up their savings due to illness, moving into assisted living, or hiring at-home help – leaving nothing for an inheritance
- Want to prevent other family members from inheriting the senior’s assets
- Feel the senior’s assets are effectively “theirs” since they’ll inherit them soon anyway
- Had a rocky relationship with the senior and feel he owes them for the pain he caused them
The closer the family member is to the senior, the harder it will be for the senior to protect himself. Additionally, the family member may also have significant manipulative power, using the grandchildren as an emotionally overwhelming threat.
Seniors are attractive targets
One reason would-be financial exploiters are attracted to seniors is because they control more wealth than any other segment of the population. In the United States, 70% of the country’s wealth is owned by people over 50.
Seniors are often easier to take advantage of. Many are isolated. Lonely people are more willing to trust a new person who offers them friendship. The dangers of isolation are one of the reasons why it’s so crucial for seniors to maintain social activity.
In addition, the proliferation of new technologies used for dealing with and managing money can be confusing for some seniors. The confusion provides openings to people looking to trick and exploit.
Seniors with physical and mental disabilities are at an increased risk for being taken advantage of. If they are exploited – if they even realize what has occurred – they are less likely than other segments of the population to report the abuse.
Devastating effects of financial abuse on seniors
Abuse of any sort leaves the victim with a profound loss of security. If someone they trusted could hurt them so badly, how can they trust anyone else?
Other emotions that plague victims of abuse are fear, shame, guilt, anger, self-doubt and worthlessness. Depression is not uncommon.
In addition to the emotional trauma, financial abuse makes a very tangible mark on a senior’s life. For a retired individual, lost assets cannot be replaced through employment. Depending on the extent of the abuse, seniors may lose their home or their ability to provide for their long term care needs. Without assets, it is often impossible to hire an attorney to pursue legal action and remedies.
The impact can be severe. Abused seniors are three times more likely to die and elder abuse victims are four times more likely to go into a nursing home.
Seniors at particular risk for financial abuse are those with a physical or cognitive disability. If a senior is dependent on another for care, especially if the lives with the senior, the chances are higher that the senior might suffer financial abuse.
Isolation and loneliness, as mentioned above, make a senior more susceptible to falling prey to friendly overtures… and not noticing the ulterior motives behind them.
Warning signs of financial abuse
If you notice any of the following things, it should be a red flag. It’s time to take a good look at your loved one’s finances and see if anything looks suspicious.
- Critical utilities such as telephone, water, electricity or gas are shut down
- Bills aren’t paid – even though your loved one should have enough income to cover the payments
- Your loved one has new “friends” who go everywhere with her – and assist her with financial decisions
- An unusual amount of ATM cash withdrawals from his account
- Your loved one gives over control of finances to a new party – and can’t clearly explain why
- Changes to wills made without the understanding or consent of the senior
- Cash or valuable objects disappear from the senior’s wallet or home
- Your loved one doesn’t understand her current financial situation
- Unusual bank account activity, especially transfers to another account, unexplained recurring payments or withdrawals from CDs or other “locked” money
Neglect can also be financial abuse
Abuse doesn’t always have to be overt manipulation or exploitation. Not having basic needs met by those who are responsible for caring for you is also abuse. Some caretakers will neglect needs of elderly in order to take money for themselves or save it for their inheritance.
Unfortunately, neglect is even more prevalent than overt abuse. 25% of elderly in Israel reported neglect at least once in the past three months.
Help seniors protect themselves
Empower your loved one to realize that her money is hers, to do with as she wishes, and not to feel pressured by anyone else. People who pressure – especially if they use threats or manipulation – very rarely have her best interests in mind.
Seniors should plan ahead to ensure their wishes are followed when it comes to their assets, consulting with a lawyer or financial advisor to get guidance.
Hired caretakers’ references should be thoroughly checked. Caretakers should not have information about their employer’s finances.
Seniors should choose an individual they fully trust to keep an eye on financial accounts and check up on any suspicious activity. An outside pair of eyes can identify and stop issues before they become a significant drain.
Don’t keep checkbooks, account statements or any other financial paperwork in accessible locations. They should be hidden or locked up.
Never sign a document you don’t understand – especially under pressure. Take your time, and get a second opinion from someone you trust personally and professionally. There are exceedingly few circumstances in which you will lose out if you wait a day or two to sign a contract with a legitimate provider.
Prevention is the best medicine
Don’t let anyone take your loved one’s physical, financial and emotional security away. Expected financial resources lost to exploitation can mean the difference between a life of comfort and security… and a life of difficulty, destitution and depression.
Keep an eye out for warning signs of abuse and share them with your loved one. Above all, offer your senior relative companionship, security and love… so they won’t be as vulnerable to a would-be abuser.
An ounce of prevention can be worth thousands upon thousands of dollars in cure.