Avoiding Elder Financial Exploitation

WHAT IS FINANCIAL EXPLOITATION?

Financial Exploitation is the illegal or improper use of another person’s resources for personal or gain. Also called fiduciary abuse, economic abuse, and financial mistreatment, this type of exploitation encompasses a broad range of conduct.

HOW DOES THIS OCCUR?

A vulnerable adult can be exploited in three ways:

without the elder’s consent;
by trickery, intimidation or coercion; or
when the elder is too confused to give informed consent.

DATA

According to recent data, elder abuse is primarily a “family problem” with perpetrators most likely to be:

adult children of the victim (47%)
spouses (19%)
grandchildren (9%), or
other relatives (9%)

The most common types of abuse are:

neglect (49%)
emotional /psychological (36%)
financial/material exploitation (30%) and
physical (25%)

TYPES OF EXPLOITATION

Financial exploitation of elders can be generally classified in two broad categories:

exploitation by a person known to the victim; or
exploitation by a stranger

Examples of exploitation perpetrated by a family member, acquaintance, person acting with power of attorney or count-appointed fiduciary include:

Misappropriating income or assets
- The perpetrator obtains access to an elder’s social security checks/payments, pension payments, checking or savings account, credit card or ATM card, or withholds portions of checks cashed for the elder victim.
Charging excessive rent or fees for services
- The perpetrator charges an elder victim excessive rent or unreasonable fees for basic care services such as transportation, food, domestic services (such as housecleaning and lawn maintenance) or medicine.
Obtaining money or property by undue influence, misrepresentation of fraud
- The perpetrator improperly or fraudulently uses the power of attorney or fiduciary authority to alter an elder victim’s will, borrower money using an elder victim’s name or disposes of an elder victim’s assets or income.

Examples of exploitation perpetrated by a con artist, unscrupulous salesman/contractor or a person representing a bogus charity.

Bank examiner scam
The perpetrator represents him/herself as a bank examiner and convinces an elder person to make a large withdrawal to help catch a dishonest bank employee or other ruse.

Fake accident ploy
The perpetrator convinces an elder person that the elder’s child, grandchild or other family member has been seriously injured or is in jail and needs money for medical treatment, bail or to pay a fine.

Telemarketing and mail fraud
The perpetrator persuades an elder person to buy a valueless of non-existent product, donate to a bogus charity or invest in a fictitious enterprise

Romance scheme
An elder victim is contacted by a perpetrator either by telephone or internet either representing a person interested in a romantic relationship or the romantic partner him/herself stating that the romantic person needs money to pay to come to the United States, needs money or wants the elder victim to invest in a business.

You’ve just won a prize!
The perpetrator tells an elder person that he/she has won a non-existent prize and obtains the elder person’s credit card or bank account number to pay for shipping and handling charges, to verify the elder person’s identity or to pay fictitious charges in order to secure the prize.

Unsolicited work
The perpetrator arrives unexpectedly at an elder person’s residence and offers to perform work for a reasonable fees. After starting the work, the perpetrators insists that the elder person pay more than originally agreed before the work will be completed – perhaps even threatening the elder person with legal action if the elder does not agree to pay.

COMBATING ELDER FINANCIAL EXPLOITATION

The following information may come in handy and is a valuable tool for an elder person to consider:

Power of attorney
Representative payee
Bill paying programs
Direct deposit
Joint bank accounts
Advance directive for health care
Living trusts and life estates
Public education for older adults, their families and the community
Remember: Some of these tools (particularly powers of attorney) can be part of a financial exploitation scam.

GOOD FINANCIAL PRACTICES FOR ELDER CUSTOMERS

Use direct deposit for all checks,
Do not leave money, bank account information or valuables in plain view,
Sign your own checks. Do not sign “blank checks” and allow another person to fill in the amount,
If someone is helping you with managing your finances, get a trusted third person to review your bank statements,
Do not sign any document without reading it carefully. You may want to ask a trusted third party, such as an attorney, to review any documents you are asked to sign,
Do not sign any agreement until it has been reviewed by a trusted third party, such as an attorney,
Do not send money in return for a general promissory note,
Do not send money to anyone who is not a long standing friend or trusted person who have known for a long time. Never send money to strangers for any reason,
Do not allow anyone, even a relative, to put his/her name on your bank account without your express consent. The Bank can set up a separate account in both your names with automatic transfer of limited funds.

PLANNING AHEAD

Establish relationships with personnel at the Bank,
Cultivate friends of all ages so you maintain a strong support network
Become familiar with resources in your community that are designed to help elder people and their families,
Execute a power of attorney that will grant financial decision-making power to a trusted friend, relative or attorney. Know the person to whom you are granting this authority. A power of attorney can be as limited or as broadly defined as you wish and can be revoked at any time. The specific “powers” given to this person should be detailed in writing. Never execute a power of attorney unless that power of attorney has been prepared by your attorney in consultation with you,
Consider a durable power of attorney that will remain in effect even if you become incapacitated,
Consider a trust, a legal arrangement whereby a person manages assets for you,
Keep accurate and complete financial records of all transactions,
Gather all important documents together (wills, deeds, insurance policies and bank account information). Tell someone you trust where these documents are kept.

AVOID SCAMS

If a deal seems too good to be true – it probably is a scam’
Never let yourself be rushed into a “deal”. This usually means the person is up to no good. Ask for details in writing and time to review them with a trusted friend, relative, advisor or attorney. If someone is trying to sell you something or make a deal with you is reluctant to have you consult a third party before deciding, it is a good sign the deal is a scam,
Never give out credit card numbers over the phone or internet unless you placed the call’
Never give out your social security number or bank account number over the phone or interest. The Bank will NEVER phone you or email you to ask for this information,
Do not pay in advance,

Fraud and scams are a current threat to everyone, especially to older adults.

TYPES OF FINANCIAL EXPLOITATION
Below are some examples of fraud and scams targeting older adults:

Using ATM cards without permission
Forging a signature on a check or property title (wills, deeds, or other legal documents)
Telling an older adult money is needed for college expenses when the money is being used for other purposes
Using a Power of Attorney to benefit oneself rather than the older adult
Unauthorized sales, such as a family ring or the family farm
Threats to harm precious property if money is not handed over
Telephone scammers impersonating representatives of telecommunications companies
Telephone scammers contacting older adults with offers of phone, internet, tv and plans that appear to be too good to be true
Telephone calls from scammers that tell the older adult that personal information is required to confirm identity or to complete a transaction, thereby gaining access to your accounts and personal data
Grandparent scams---phone calls from someone posing as a family members saying they are in trouble and need money immediately
Telephone scams from someone posing as a police man, court personnel or other governmental agency person stating that a debt must be paid either over the phone or to meet them with payment in place outside the actual governmental payment window inside a government building
Fraudsters posing as bankers or investment advisers to scam older adults with fraudulent investment opportunities
Scammers posing as a bank representative contacting older adults to gain access to your accounts.
Elder financial exploitation. Usually involves obtaining your money, property or assets under false pretenses. The scammer can be someone you know and trust, such as a partner, family member, friend, neighbor or a caregiver.

WARNING SIGNS OF FINANCIAL EXPLOITATION
There are a number of warning signs to watch for, including:

Changes to banking practices
Being accompanied to the bank by an unknown person
An person giving you directions to do a banking transaction either in person or on the telephone
Adding a new name on a bank signature card
Sudden changes in a will or other financial document
Unexplained disappearance of funds or possessions
Substandard care or unpaid bills when there are adequate financial resources
Sudden appearance of previously uninvolved relatives

Protect yourself from financial exploitation

Check your bank, brokerage, investment, annuity and other financial statements each month
Store financial materials in a locked drawer, safe deposit box, or somewhere always locked out of sight
Be careful who you give a Power of Attorney
Talk to your bank about age-friendly banking options
Contact a civil legal attorney before signing any type of documents whatsoever
Place a credit report freeze with all three major credit bureaus to protect your identity