Older adults, aged 60 and above, are both one of the fastest-growing demographics in the United States and uniquely vulnerable to many kinds of abuse, including financial abuse and exploitation. According to a 2023 report from the AARP, elder Americans lose an estimated $28.3 billion annually to financial exploitation.
First things first: let’s quickly talk about the difference between financial abuse and financial fraud, according to the U.S. Department of Justice’s Elder Justice Initiative (EJI). Both are categorized as financial exploitation, but they’re separated by who the perpetrator is. Financial abuse is committed by someone the victim knows; financial fraud is committed by a stranger. Both can have devastating consequences, but we’re going to focus on the first type.
Elder financial abuse is when someone illegally or improperly takes and/or misuses the money, property or other assets of someone aged 60 or older, usually for their own use or benefit. According to Fidelity Investments, around “90% of financial exploitation is carried out by people close to the victim,” and that more personal relationship really makes it a more insidious form than straight-out fraud.
The EJI outlines several forms of this abuse:
These are all separate from financial fraud, which includes the more stereotypical exploitation like:
Remember that statistic we mentioned at the beginning from the AARP? About how older adults are exploited out of $28.3 billion a year? That same report says that 72% of that total is the result of abuse by a friend, family member, or caregiver. Even worse, 87.5% of victims of elder financial abuse never report it to authorities.
There are several reasons why older adults are popular targets for this form of exploitation, including physical health complications, physical disabilities, mental health impairments and worsening cognitive abilities, financial or care dependency, or social isolation. Most abuse takes place either at home, via adult children, or in assisted living or residential care facilities, via staff or employees.
Spotting financial abuse like this can be tricky, especially if the victim is dealing with dementia or other cognitive impairments. Depending on whether it is you who are the potential target or you’re looking into this on behalf of a loved one, you should look for:
Clear communication and pre-planning can help prevent elder financial abuse before it happens. At WithU Loans, we suggest discussing finances with your loved ones early and often. Have multiple trusted people help monitor accounts and keep the dialogue open. This can make it easier to spot unusual financial activity. And be very deliberate about who you appoint as your power of attorney. Make this decision while you’re still of clear and sound mind and consider naming two people for accountability. Other safe measures include:
Regularly change your passwords to strong, unique ones, and use a password manager if you need help tracking all of them. Shred sensitive documents. And only share this information with trusted loved ones.
Run background checks before hiring anyone or bringing them into your lives and then get to know them and stay in consistent contact.
Abusers of any type will attempt to cut their victim off from family, friends, or other support networks who might attempt to interfere with the abuse.
If you or your loved one do become a victim of elder financial abuse or suspected financial abuse, the first thing you need to do is report it. Guilt, shame, and embarrassment often keep victims from coming forward about what happened to them, but it’s important to bring these types of crimes to light. It will not only be key to facilitating any potential recovery of your assets, but also, talking openly about this issue can help reduce the stigma and support others in coming forward.
The first thing to do is to report what happened to a couple of different organizations:
You can also contact the local sheriff, police, and/or district attorneys to file a report and seek prosecution. You’re likely to be asked specific information like the victim’s known medical conditions or disabilities, the date and location of any incidents, the names of anyone involved, a description of the financial abuse and any other suspected abuse, and any urgent concerns or risks to safety.
While reporting is the first step toward recovery, the rest of the process is often much longer. If you’re looking for the return of stolen assets, it’s generally a civil matter, and the legal procedures vary state by state. Engaging with a local advocate can help you navigate the proceedings.
It’s also important to consider how this might have shaken mental and emotional health, especially feelings of mistrust or humiliation. Remember that you are not alone; this is a wide-scale problem that affects thousands of people every year. Reach out to local support groups and therapy resources to help you on your path to healing.