What is elder financial abuse?
Elder financial abuse covers a wide range of abusive conduct designed to extract a monetary or material gain from an elderly victim.
There's no uniform definition of elder financial abuse because it's considered a state and not a federal concern. Most states include financial abuse in their elder abuse laws, but the exact definition varies from state to state.
For example, some states only consider it elder financial abuse if the perpetrator uses dishonest tactics to take advantage of the victim. In these states, the definitions of elder fraud and elder financial abuse overlap quite a bit. In other states, elder financial abuse includes any situation where the perpetrator knew or should have known that the victim lacked the cognitive capacity to make financial decisions, regardless of whether they used dishonest or fraudulent tactics.
Elder financial abuse statistics
Because elder financial abuse doesn't have a firm definition, data on it is scarce. However, the research that has been done indicates that this type of abuse happens frequently and has a massive financial impact.
A 2011 study of elder adults in New York compared self-reported financial abuse to documented cases of financial abuse. Financial abuse was self-reported at a rate of 42.1 out of 1,000 participants (4.21%). The documented rate was just 0.96 per 1,000 people (0.096%).
Estimates of annual losses due to elder financial abuse could be $28.3 billion.
What to do about elder fraud and financial abuse
Unfortunately, there's no simple solution to elder fraud. Social isolation and loneliness are two significant risk factors, so older adults who regularly talk with friends and family are less likely to be victims. But elder financial abuse is often perpetrated by someone close to the victim, such as a family member or caregiver.
Here are some methods the American Association of Retired Persons (AARP) recommends to prevent elder financial exploitation:
- Designate someone you trust as your financial power of attorney. It's important for older adults to do this while they're still able to make financial decisions in case they later become incapacitated.
- Appoint a trusted contact for accounts and investments. This is a person you authorize your bank to contact about questionable activity on your account.
- Sign up for a service that tracks your bank accounts, investments, and credit cards. These services monitor your accounts for suspicious activity, including missing deposits or unusual withdrawals.
If you have a case of suspected or confirmed elder fraud, call the National Elder Fraud Hotline at 1-833-372-8311. This toll-free hotline is managed by the Office for Victims of Crime, a program within the U.S. Department of Justice. It provides services to adults aged 60 and older who may be victims of financial fraud.
It's sad to see the growing numbers of elder fraud and financial abuse. On a positive note, these issues are getting much more attention than they have in past years, and there are resources such as the National Elder Fraud Hotline available to help. Hopefully, this increased attention will result in higher reporting rates and more protection for seniors.
