One of the most prevalent and devastating forms of elder abuse is financial exploitation, also known as elder fraud. As our population ages, older adults become increasingly vulnerable to individuals who seek to exploit their financial resources.

The Internet Crime Complaint Center’s (IC3) 2022 Elder Fraud Report reveals a staggering 84% increase in total losses to seniors from the previous year’s report. Much of this loss is attributed to investment fraud involving cryptocurrency … Technical-support fraud, where criminals trick victims into giving remote access to their computers under the guise of providing technical support, ranked second for victim loss behind investment fraud.1

Sadly, only 1 in 23.5 incidents of elder fraud are reported to authorities. According to FinCEN reports, deposit accounts were the most common product involved with elder fraud cases (62%), followed by debit cards (18%) and credit cards (9%). Even with such low reporting, losses due to elder fraud total $269.5 billion each year. In the state of Wisconsin, the estimated and reported elder fraud losses are as follows2:

  • Estimated $ Amount Lost: $3.42 billion
  • Estimated # of Cases: 103,034
  • Reported $ Amount Lost: $145.6 million
  • Reported # of Cases: 4,384

Let’s take a deeper look at the issue of financial elder abuse, its impact on seniors, and the steps we can take to protect our older loved ones from this crime.

Understanding Elder Financial Abuse

Financial elder abuse involves the unauthorized or improper use of an older adult's funds, property, or assets by a caregiver, family member, or stranger. It can take various forms, including scams, fraud, theft, forgery, coercion, or undue influence. Perpetrators often target seniors due to their perceived vulnerability, diminished capacity to manage finances, or social isolation.

The Impact on Seniors

Financial elder abuse not only results in significant financial losses but also has severe emotional and psychological consequences for older adults. Seniors who fall victim to financial exploitation may experience feelings of shame, guilt, helplessness, and a loss of trust. Moreover, the financial impact can jeopardize their ability to cover basic needs, access healthcare, or maintain a comfortable standard of living.

Recognizing the Warning Signs

Detecting financial elder abuse can be challenging, as victims may be unaware or unable to articulate their experiences. It is crucial for family members, friends, and caregivers to be vigilant and look out for the following warning signs:

  • Unexplained financial transactions: Large or frequent cash withdrawals, unusual bank transfers, or sudden changes in financial account activity.
  • Missing personal belongings or valuables: Disappearance of jewelry, antiques, or other assets without a plausible explanation.
  • Unpaid bills or financial struggles: Evidence of unpaid bills, eviction notices, or the inability to cover basic expenses despite having sufficient funds.
  • Sudden changes to legal documents: Alterations to wills, trusts, power of attorney, or other legal documents without the senior's knowledge or understanding.
  • Isolation from family and friends: The presence of a new and controlling caregiver or family member who restricts the senior's access to others or manages their finances without transparency.

Prevention and Protection

To safeguard older adults from financial elder abuse, it is essential to take proactive measures:

  • Education and awareness: Educate seniors about common scams and fraudulent schemes, empowering them to recognize and avoid potential risks. Download the “Protect Your Family From Scams” handout created by the Wisconsin Bankers Association to share with your loved ones.
  • Open communication: Foster an environment of trust and open dialogue, encouraging seniors to discuss their financial concerns and seek advice from trusted family members or financial professionals.
  • Regular monitoring: Regularly review financial statements and transactions with the senior, keeping an eye out for any suspicious activity.
  • Power of attorney: Designate a trustworthy individual to act as a power of attorney, ensuring they have the senior's best interests at heart and are legally bound to protect their financial well-being.

Protecting our older loved ones from financial elder abuse requires a collective effort. By increasing awareness, recognizing the warning signs, and taking preventive measures, we can help ensure the financial well-being and dignity of our seniors. Let us stand together to safeguard our aging population and build a society that cherishes and protects its most vulnerable members.

1 https://www.fbi.gov/contact-us/field-offices/springfield/news/fbi-springfield-warns-elder-fraud-continues-to-be-a-growing-problem
2 https://www.comparitech.com/blog/vpn-privacy/elder-fraud-by-state/