If you have a parent who is getting up there in age and is living alone, you undoubtedly worry about their mental and physical health. You may also worry that your parent could become the victim of elder abuse in the form of physical or mental abuse. What you may not be worrying about, however, is the very real risk of financial exploitation. To help you protect your parent.
What Is Elder Financial Exploitation?
The Older Americans Act of 2006 defines elder financial abuse, or financial exploitation, as “the fraudulent or otherwise illegal, unauthorized, or improper act or process of an individual, including a caregiver or fiduciary, that uses the resources of an older individual for monetary or personal benefit, profit, or gain, or that results in depriving an older individual of rightful access to, or use of, benefits, resources, belongings, or assets.” Although financial exploitation can take a wide variety of forms, some common examples include:
- Family members taking advantage of an elder person’s diminished capacity to either cajole, or outright steal, money or assets.
- A caregiver using an elder person’s money without permission or taking property from the individual’s home.
- A family member or caregiver getting an elderly individual to sign documents under false pretenses that transfer assets to the perpetrator, either now or after the elderly person’s death.
- Targeting an elderly individual for financial scams, over the telephone, through the mail, on the computer, or even in person.
Financial Exploitation By the Numbers
Sadly, elder financial abuse is not uncommon in the United States. In fact, most experts agree that it is the most common form of elder abuse. While precise figures are difficult to come by, due in large part to the fact that victims are reluctant to report being victimized, conservative data regarding financial exploitation of the elderly show that:
- Experts believe more than one in 10 seniors will be the victim of elder abuse
- Each year, there are over 5 million instances of financial exploitation with a senior victim
- For every instance of elder abuse reports, as many as 14 go unreported.
- 90 percent of the perpetrators are family members
- When a family member is the perpetrator, two-thirds of the time it is an adult child or spouse of an adult child.
Preventing Elder Financial Exploitation
If you are concerned that a parent is at risk for becoming the victim of financial abuse, there are some steps you can take to minimize that risk, such as:
- Speak up. Seniors make attractive victims in large part because they tend to be more trusting and they lack technological know-how. Sit down with your parent and have a very frank discussion about the issue. Impress upon him/her that there are predators out there who will target them so if they are unsure about someone or something, talk to you first.
- Warn your parent about social media. Your parent likely doesn’t really understand how most social media platforms, such as Facebook, Instagram, or Twitter, operate. The privacy settings, in particular, are problematic. Predators know this and can gather a wealth of personal information from a potential victim’s social media profile/page. That information is then used to scam a victim. The easiest way to avoid this scam is to be vigilant about keeping privacy settings private.
- Never give out information over the phone. Tell your parent to be very careful when talking to someone over the phone. There may have been a time when it was safe to give out personal information over the phone; however, if there was, it is long past. Never give out a social security number, bank account information, passwords, or other personal information over the phone. Explain that if someone calls claiming to have a legitimate need for personal information, the best thing to do is to insist on calling them back using a verified telephone number.
- Screen household help. Conduct a background check on anyone – other than family members and long-time acquaintances—who is allowed in the home. Do not assume that an agency has conducted a proper background check. Take the time to do one yourself to make sure the individual has the proper credentials and does not have a criminal history.
Since founding Parman & Easterday in 1985, Larry has led over 1,000 free, community-service education programs and helped more than 10,000 Oklahoma families go from putting off their estate plan to getting it done. His goal for every client is the same: to become the person their family calls "the one who took care of everything."
Larry is the author of three books: The Straight Shooter's Guide to Estate Planning; Estate Planning Basics; and Guiding Those Left Behind in Oklahoma. He served as Oklahoma's Secretary of State and Secretary of Commerce, and his firm is the only member of the American Academy of Estate Planning Attorneys in the state.
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