July 5, 2022 | Article | 5 min Personal insights
Spotting Elderly and Vulnerable Financial Abuse
Seniors are increasingly becoming targets for financial abuse. As people over 50 years old control over 70 percent of the nation's wealth, fraudsters are using new tactics to take advantage of the growing number of older and vulnerable Americans. Senior financial abuse is estimated to cost victims at least $2.6 billion annually, according to the NCOA.
What Is Elder Financial Abuse?
Elder financial abuse is a crime that deprives older adults of their resources and ultimately their independence. Financial abuse can take many forms including investment scams, bogus lottery schemes, stolen jewelry, identity thefts, credit card misuse, forged checks and many more. Anyone who sees signs of theft, fraud, misuse of a person’s assets or credit, or use of undue influence to gain control of an older person’s money or property should be on the alert. These are signs of possible exploitation.
Sadly, most perpetrators of financial abuse aren’t strangers. Older Americans that may have disabilities or rely on others for help can be susceptible to scams and other fraud. Technological advances can also present difficulties for seniors to know whom to trust and what's safe.
Despite these threats, taking simple steps to safeguard personal information and being aware of warning signs can help protect the elderly and vulnerable from financial abuse.
Why Are the Elderly and Vulnerable Targets?
There are three sets of factors that can make the elderly and vulnerable targets. The first factor is health-related. As seniors get older, the aging process can bring about cognitive and physical changes that elevate the risks associated with financial exploitation. The changes can include cognitive impairment, poor physical health, functional impairment, and dependency on others. These changes are associated not only with elderly financial abuse, but with other forms of elder abuse as well.
The second factor pertains to financial and retirement trends. The wealth or assets of older Americans have accumulated throughout life and make them a target for financial exploitation. Also, wealth management trends have shifted responsibility of retirement funds and assets to the elderly. Thus, another target factor for fraud.
The third factor is demographic trends that are propelling steep rises in the elderly population. According to the 2010 census, the elderly had increased in numbers and the overall percentage of the population. By 2014, the elderly population had increased by 10 million. By 2030, the estimate is that one in five Americans will be sixty-five years or older and have a projected population of 74 million within the United States alone. The aging trend lends an urgency to the problems of elder financial exploitation as well as other forms of abuse.
What Can You, Your Family, and Friends Do to Protect the Elderly and Vulnerable?
Tips for seniors and vulnerable:
- Plan ahead to protect your assets and to ensure your wishes are followed. Talk to one of our banking professionals at Wisconsin Bank & Trust, an attorney, or financial advisor about the best options for you. Establish a relationship with these professionals. They can help look out for any suspicious activity related to your accounts.
- Shred receipts, bank statements and unused credit card offers before throwing them away. Lock up your checkbook, account statements and other sensitive information when others will be in your home.
- Carefully choose a trustworthy person to act on your behalf in all estate-planning matters.
- Order your credit report at least once a year and check for accuracy.
- Never give your personal information, including Social Security Number, account number, or other financial information to anyone over the phone or email unless you initiated the call and the other party is trusted.
- Never pay a fee or taxes to collect sweepstakes or lottery “winnings.”
- Never rush into a financial decision and always get information in writing.
- Never sign a document you do not understand. Consult with a financial advisor or attorney.
- Check references and credentials before hiring anyone.
- Pay with checks and credit cards instead of cash to keep a paper trail. Set up a direct deposit so that others do not need to cash checks.
- Understand that it's okay to say “no”. Trust your instincts. If something does not feel right, it may not be right. Exploiters and abusers often are very skilled.
Tips for family and friends
The key to spotting financial abuse is identifying a change in a person’s established financial patterns. Listed below are red flags to look for:
- Unusual activity in an older or vulnerable person’s bank accounts, including large, frequent or unexplained withdrawals, or unusual purchases.
- Changing from a basic account type to one that offers more complicated services that might not fully be understood and/or needed.
- A new “friend” accompanying an elderly or vulnerable person to the bank.
- Non-sufficient fund account activity or unpaid bills.
- Closing CDs or other accounts without regard to potential penalties.
- Uncharacteristic attempts to wire large sums of money.
- Suspicious signatures or obvious forgeries on checks, or checks written as loans, gifts, or made out to "Cash".
- Refusal to make eye contact, shame or reluctance to talk about the problem.
- Bank statements with different home addresses.
- New powers of attorney the older person does not understand or cannot explain.
- A caretaker, relative or friend who suddenly begins conducting financial transactions on behalf of an older person without proper documentation.
- Altered wills and trusts.
What Should You Do if You Are a Victim of or Suspect Financial Abuse?
- Talk to a trusted family member, doctor, or attorney who has your best interests at heart.
- Plan ahead to protect your assets and to ensure your wishes are followed. Contact our banker team so that we can help look out for any suspicious activity related to your accounts.
- Contact Adult Protective Services in your state or your local police for help. Police should investigate if fraud is involved.
- If the financial abuse involves a scam, report it to the FTC.
- Additionally, to help with investment issues, the Financial Industry Regulatory Authority has a newly established toll-free help line (844.57.HELPS, or 844.574.3577) that older people can call if they have questions about their brokerage accounts, including statements and individual investments.