How to Protect Elders Against Financial Fraud and Abuse

Could you help an elderly adult protect the money and assets they worked for their entire lives?

If you regularly work with older adults or have elders in your care, you may be a mandated reporter of elder abuse. From in-home caregivers to financial professionals, the list of people required to identify and report elder abuse, including financial abuse, includes a wide range of professionals.

Discover how you can help you protect elderly adults against financial fraud and abuse.

How to Protect Elderly Adults Against Financial Fraud

Nearly 4 out of 10 older adults (aged 60+) will be victims of financial abuse within a five-year period, reports Consumer Affairs.

The U.S. Treasury Financial Crimes Enforcement Network (FinCEN) has identified two primary categories of victimization across elder financial exploitation incidents: elder scams, where the victim is unknown to the perpetrator, and elder theft, where the victim is known to the perpetrator.

• Elder scams involve the transfer of money to a stranger or imposter for a promised benefit or good that the older adult did not receive.
• Elder theft involves theft of an older adult’s assets, funds, or income by a trusted person.

Preventing Elder Financial Scams

Elder financial scams can take many forms. The most common elder financial abuse scams are tech-support scams and romance scams deployed across online dating platforms.

Avoiding Tech Support Scams

In a tech support scam, someone may call pretending to be a technician from a well-known company. They will say they’ve found an issue with your computer and ask for remote access to “fix” the problem. Then, they will request payment for the fix. Another common tech support scam involves a computer screen pop-up window that warns of a security issue and provides a phone number to call.

According to the FTC, there are two things an older adult needs to know to avoid a tech scam:

1. Legitimate tech companies won’t contact you by phone, email, or text message to tell you there’s a problem with your computer.
2. Security pop-up warnings from real tech companies will never ask you to call a phone number or click on a link.

Avoiding Romance Scams

Falling victim to a romance scam can be easy. Many factors can make someone vulnerable to a romance scam, including declining cognitive abilities, grief from a passing loved one, or simply loneliness.

Romance scams most often occur via online dating platforms or social media sites. The victim believes they are entering a legitimate relationship, while the scammer gets the victim on the hook for a scam that can play out over weeks, months, or even years.

A common pattern of online dating romance scams has emerged:

1. The initial phase of the relationship is quick and intense — the perpetrator claims to fall in love with the victim early on.
2. The perpetrator may move the “relationship” away from the dating site and onto an instant messenger or email platform.
3. The perpetrator will never be available for in-person meet-ups; they live and work outside the country, are in the military, or are involved in an organization abroad.
4. They may request “small gifts” early in the relationship to test the victim’s agreeableness: a new phone, for example.
5. Requests for increasingly larger amounts of money follow.
6. A third party may get involved, and the victim may receive a message from a family member or “doctor” claiming they need to send money to help with a medical bill or other emergency involving the perpetrator.
7. Perpetrators will often tell their victims how they want to get paid, and it’s usually fast and nonrefundable. They may request wire transfers, gift cards, or cryptocurrency.

According to the FTC , there is one single thing that can prevent romance scams:

Never send money or gifts to a sweetheart you haven’t met in person.

Avoiding Other Financial Scams

While tech support and romance scams are two of the most common, there are countless ways fraudsters and criminals attempt to financially exploit older adults. Personal data breaches (identity theft), investment scams, government impersonation scams, and reverse mortgage scams are also extremely common.

The most insidious of these is the “grandparent scam,” in which a scammer pretends to be a grandchild or other family member who is in danger or experiencing an emergency that requires money immediately. These scams are made increasingly easier with new advances in artificial intelligence and deep fake technology.

Older adults can avoid most of these scams by:

• Keeping personal identifying information private: never providing personal or banking information to someone over the phone or online.
• Closely monitoring bank accounts, credit card statements, and credit reports for fraudulent activity.

Preventing Elder Financial Theft

Not all elder financial exploitation comes at the hands of faceless strangers. Elder financial theft is financial exploitation from someone known, like a caregiver or family member.

FinCEN found that a family member was involved in the theft of assets from older adults in 46% of elder theft cases.

Trusted family members and caregivers will use tactics such as deception, intimidation, and coercion in order to access, control, and misuse finances and assets. Using their relationships with the victims, they may exploit legal guardianships and power of attorney arrangements to drain income and retirement savings, liquidate assets, steal Social Security benefit checks, transfer property and other assets into their name, or max out victim credit cards until most of their assets are gone.

When Trust Goes Wrong: A Real-Life Case of Elder Financial Theft

Here’s a real-life example of elder financial theft at the hands of a trusted family member:

William, 85, had purchased five real estate properties across multiple states and saved $400,000 over the years. As William’s mental capacity diminished, his son, Michael, was given power of attorney for financial and healthcare decisions.

With the power of attorney in place, Michael went to the bank and added himself to all of William’s accounts, and transferred the title of all five properties to his own name. Within a year, Michael had withdrawn all of the money in William’s bank accounts, including the $400,000 savings. Michael also sold off two of the five investment properties, pocketing the proceeds.

Michael used the healthcare power of attorney to send his father to a nursing home, where William was placed with written instructions that no visitors or contact with anyone were allowed without Michael’s approval. This isolation made it easier for Michael to transfer all of William’s assets and finances, sell off investment properties, and drain away William’s life savings.

Fortunately, William was able to get help and a legal team that fought hard to protect his remaining properties and get him the safety of a court conservatorship. Unfortunately, many victims of family-perpetrated financial theft don’t get the chance to protect themselves.

It can be difficult to safeguard against exploitation when the perpetrator is a trusted family member or caregiver.

One way to prevent financial theft by a trusted caregiver is to establish a financial security team. If possible, assign more than one person to oversee financial transactions, like a family member plus an attorney, accountant, or financial professional.

Know the Signs, Make the Report

The best way to protect elders from financial exploitation is to know the signs of potential elder financial abuse and to make a report to the proper agencies. Mandated reporters of elder abuse, such as employees of financial institutions or nursing homes, could be the first ones to notice that an elderly adult is being scammed or stolen from. Making a report to local police, adult protective services, and/or a local ombudsman can start the investigative process that can ultimately stop financial abuse and exploitation from happening. Know the signs of financial exploitation and make a report — it could help protect an older adult from losing everything they’ve worked their entire lives for.

Learn the signs — find convenient online mandated reporter training of elder abuse courses so you can better protect older adults from financial and other forms of abuse.