Elder Financial Abuse

WHAT IS ELDER FINANCIAL ABUSE?

Elder financial abuse is the illegal or improper use of an older person’s money, property, or assets. Elder financial abuse can involve fraud or can happen when a wrongdoer manipulates a victim into voluntarily providing information or assets. AARP reports that older people in the United States lose an estimated $28.3 billion each year to elder financial exploitation¹.

Elder financial abuse may be limited to an isolated attempt to steal money from your account, but can also be a series of ongoing events designed to drain resources.

The National Committee for the Prevention of Elder Abuse defines elder financial abuse as a broad spectrum of conduct including:

Fraudulently signing for older adult people or forging their signatures
Coercing or using undue influence to get someone to sign a deed, will, or power of attorney
Promising long-term care in return for money or property and then not fulfilling the promise
Taking a vulnerable elder’s money or property
Taking or using an older person’s property or possessions without permission
Using deception to gain a victim’s confidence (also known as confidence crimes or “cons”)

¹AARP

WHY OLDER ADULTS?

There are many reasons why older adults become targets and fall prey to scammers or thieves. Older adults are often targeted because they tend to be trusting and polite. They also usually have financial savings, own a home, and have good credit – all of which make them attractive to scammers. But not all wrongdoers are strangers.

Caregivers, close friends, and other trusted individuals may have ready access to their homes, financial accounts, personal information, medical supplies and medications, and they are typically trusted companions who can easily influence an older adult.

FAMILY MEMBERS / CLOSE FRIENDS

Close friends or family members might:

Attempt to isolate the older adult from other friends and family members
Believe they are entitled to, or justified in taking, what they believe is rightfully theirs
Have had a negative or abusive relationship with the older adult
Need money to pay for a substance abuse, gambling, or other problem
Think the older adult will spend all of their savings, depriving them of an inheritance
Try to prevent other family members or siblings from inheriting the older adult’s assets

SERVICE PROVIDERS

Service providers might:

Overcharge for services or products
Use deceptive or unfair business practices
Use positions of trust or respect to gain compliance

CRIMINALS

Many criminals look for older adults to try to exploit or scam them. They might:

Attend church or other community functions to find older adults who may live alone
Drive through neighborhoods to identify older adults who live alone or are isolated
Gain access to older adults as caregivers, counselors, or other professional service providers
Find vulnerable widows or widowers by reading obituaries
Connect with older adults through online mediums, such as social media
Quickly move from community to community to avoid being noticed or apprehended
Say they love the older person (also known as “romance scams”)

ASSETS

Older adults may not realize the value of their assets. This could make them a target for scammers or predators who could offer to buy their homes or possessions for a fraction of what these items are really worth.

TECHNOLOGY

Many older adults are not comfortable with technology in general. Criminals could volunteer to help older people set up online access to their bank accounts in an attempt to gain control over their usernames and passwords.

PATTERNS

Some older adults have predictable patterns, such as receiving monthly checks or going to the bank on the same day every week. If criminals notice this pattern, they can break into the home while they are away. Also, they could steal the older person’s possessions through strong-arm tactics such as robbery or mugging.

EXAMPLES OF SCAMS TARGETING OLDER ADULTS

There are many scams aimed at older adults. Here are some examples that could affect you or a loved one:

In this scam, a fraudster, posing as a tech support employee, contacts an older adult and warns them about a potential technical support problem. The fraudster tricks the older adult into believing their computer is infected with a virus or has a service issue that can be fixed remotely.

The criminal either asks the older adult to pay for fake tech support and/or they access saved data on the older adult’s computer, such as names, addresses, account numbers, and other personal information. The fraudster uses this information to steal the older adult’s identity or make transactions in their name.

Many older adults find themselves managing their savings and investments once they finish working. A number of investment schemes are targeted at older adults – they promise low-risk investments with guaranteed returns. Cryptocurrency investment scams are common. Be wary of investment opportunities that seem “too good to be true.” They often are. In 2023, the FBI received more than 6,400 complaints from older adults reporting losses of $1.2 billion related to investment scams. (Source: FBI’s Internet Crime Complaint Center annual reports)

In a romance scam, a criminal uses a fake online identity to gain a victim’s affection and trust. The scammer then uses the illusion of a romantic or close relationship to manipulate and/or steal from the victim. Scammers may propose marriage and make plans to meet in person, but that will never happen. Eventually, they will ask for money. The criminals who carry out romance scams are experts at what they do and will seem genuine, caring, and believable. Scammers are present on most dating and social media sites.

Scammers use fake telemarketing calls to prey on older people. With no face-to-face interaction and no paper trail, these scams are incredibly hard to trace.

Also, once a successful deal has been made, the buyer’s name is then shared with similar criminals looking for easy targets, sometimes defrauding the same person repeatedly.

This scam is done by letters, phone calls or emails. The message will say something like “Congratulations! You’ve just won a lottery!”. The criminal will convince the victim that, before they can claim their winnings, they will need to pay taxes on the winnings. The victim then sends the “tax payment” to the fraudster.

The older adult receives a letter, an email, or a fax from a foreign “dignitary.” The correspondence promises huge monetary rewards in exchange for helping an official from a foreign country out of an embarrassing legal problem.

All the older adult needs to do, the correspondence states, is to send a small amount of money (in comparison to what they will receive in turn) to help out the foreign dignitary. The victim never receives any rich reward and loses the money that is sent.

A criminal calls an elder adult and whispers or mumbles phrases designed to get the older adult to reveal a grandchild’s name. Once the criminal has the grandchild’s name, they will impersonate the grandchild and claim to need money for an unexpected financial problem (lost wallet, overdue rent, and/or payment for car repairs). Then, the criminal will ask the older adult to wire money to them.

Medicare’s universal coverage makes it easy for criminals to pose as Medicare representatives and ask older adults to provide personal information.

Many older adults will shop online to find the best price for their prescription drugs. Criminals could rip them off by providing counterfeit drugs. Not only will the older adult lose the money, but they will receive drugs that may harm their health.

Scammers can create fake anti-aging products, medications or remedies that can be worthless or might have toxic substances in them. The danger is that aside from paying money for something that will not help a person’s medical condition, victims may purchase unsafe substances that can inflict even more harm. This scam can be as hard on the body as it is on the wallet.

There are two different types of funeral and cemetery fraud to watch out for. First, a criminal will read the obituaries or attend a funeral to find the contact information for a widow or widower. Then, the criminal will claim they are owed money and continue to extort the grieving victim. The other scam is done by disreputable funeral homes that increase the already large cost of funeral services and add in extra charges. Both scams usually are perpetrated in person.

A victim receives a telephone call from what seems to be a legitimate company. The criminal claims there are problems with the victim’s account and the company simply needs to verify some information. The caller seems to already have information about the victim, so the victim feels comfortable sharing additional information. The fraudster uses the shared information to steal money from the victim.

Criminals ask older adults for money for fake charities. This often occurs after natural disasters.

People working in real estate, financial services, or related companies may use reverse mortgage scams to steal equity from the property of older adults. In many of these scams, older adults are offered free homes, amazing investment opportunities, or assistance with foreclosure or refinancing in exchange for their home’s deed.

OTHER EXAMPLES

Caregiver scam
Unsolicited work scam
Inheritance scam

WARNING SIGNS

Know the signs of elder financial abuse. To help protect older family members and friends from financial abuse, it’s important to know what to look for:

Behavioral changes, such as fear or submissiveness, social isolation, withdrawn behavior, disheveled appearance, forgetfulness, impulsiveness, secrecy, or paranoia.
Large, frequent “gifts” given to caregivers.
Large, unexplained and unexpected loans taken out by elders, such as student loans.
Missing personal property.
New best friends and “sweethearts”.
Onset or worsening of illnesses or disability.
Sudden, atypical or unexplained withdrawals, wire transfers, or other changes in their financial situations.
Sudden desire to change their wills, especially when they might not fully understand the implications.
Sudden increase in spending by family or friends.
Sudden reluctance to talk about finances.
Transfer of titles of homes or other assets to other people for no apparent reason.
Utility or other bills not being paid.

WHAT YOU CAN DO

Unfortunately, elder abuse is often not reported. There are things you can do to protect yourself or a loved one from fraud or financial abuse. Here are some tips to help you:

ORGANIZE YOUR FINANCES
No matter how old you are, it’s a good idea to update and organize all your financial documentation, including:

Birth and marriage certificates
Car titles
Financial powers of attorney
Insurance policies
Pension and trust documents
Real estate deeds
Social Security paperwork
Will

Maintaining an organized file and helping others (such as a parent, uncle, or close friend) do the same can make it easier to spot the inconsistencies and red flags that could signal financial abuse.

MONITOR FINANCIAL ACTIVITY
Check your account statements and credit reports regularly to make sure nothing has changed without you knowing. If there are any signs of changes not made by you, contact your bank or credit card company right away.

CREATE A LIST OF FINANCIAL CONTACTS
Bankers, insurance agents, attorneys, accountants, financial advisors, and other professionals should be on your list of financial contacts. Share your list, but not usernames or passwords, with those that help you manage your money such as your financial planner or advisor and family members you trust.

WATCH OUT
An older person could be at risk for exploitation. Be careful if the individual is unfamiliar with their finances, has family members who are struggling financially, or have substance abuse problems. Look for financial mishandling, which can include anything from the use of property or belongings without permission to persuading someone to sign a deed, will, or power of attorney through deception or coercion.

REPORT THE ABUSE

If you believe you or someone you know may have been a victim of elder financial abuse, file a complaint with the FBI.

When reporting a scam—regardless of dollar amount—include as many of the following details as possible:

Names of the scammer and/or company
Dates of contact
Methods of communication
Phone numbers, email addresses, mailing addresses, and websites used by the perpetrator
Methods of payment
Where you sent funds, including wire transfers and prepaid cards (provide financial institution names, account names, and account numbers)
Descriptions of your interactions with the scammer and the instructions you were given
Whenever possible, you should keep original documentation, emails, faxes, and logs of communications.