Some Facts about Elder Financial Exploitation

Old lady on computer“As with those who have endured other types of abuse, victims of financial elder abuse often feel they can't or shouldn't seek recourse.”

Perpetrators of financial exploitation are frequently family members, caregivers or other people who are known and trusted by the elderly. This makes many seniors who are financially exploited, even more reluctant to come forward. Perpetrators often depend on this or pressure victims to keep quiet.

As Yahoo Finance recently posted in “What to Do If You or Someone You Love Has Been Financially Exploited,” betrayal by a family member or another trusted person is especially hard on those who are financially abused. Seniors who've been financially exploited, may feel shame and guilt. Consequently, they do not feel entitled to help or support, let alone to feel victimized.

The widespread nature of financial exploitation shows that it can happen to almost anybody. More states are trying to find ways to legally address financial exploitation and to better address and deter this abuse, as the population ages and an increasing number of seniors are vulnerable.

Most states criminalize financial elder abuse.

This means that, in addition to laws already in effect to prosecute theft, there are added penalties, which can be filed in financial exploitation cases involving seniors or vulnerable adults,  increasing the jail time for perpetrators.

Some states also now have statutes allowing older or vulnerable adults to sue specifically for elder financial exploitation. The states include Arizona, California, Florida, Oregon, Minnesota, Utah, Illinois and Washington.

A key feature of elder financial exploitation cases is that they allow victims to sue for multiple times the amount lost (usually two or three times the amount) and to recover attorneys' fees. This punishes perpetrators more and acts as a deterrent. This approach also encourages settlement of these cases. Awarding attorneys' fees is another incentive for seniors to secure legal representation.

Remember that the cost of financial abuse goes beyond the monetary loss. Victims and their families should access services, like counseling and case management, to help them heal after being financially abused.

Reference: Yahoo Finance (March 14, 2017) “What to Do If You or Someone You Love Has Been Financially Exploited”


Use Caution in Helping with Seniors’ Finances

Old lady on computerAssisting someone with his or her finances sounds simple, right? Your mom, a neighbor or the person for whom you provide home health care may ask you to write a few checks out of her checkbook because it’s difficult for her to see. She may ask you to pick up a few groceries and gives you some cash. You’d think that folks would understand your good intentions and maybe even thank you.

But Bankrate’s article, “Be cautious before helping seniors with their finances,” warns that, unfortunately, it may turn out differently. Unless you’re an only child helping your parent, when you start writing checks, suspicions may arise, with or without justification.

Elder law attorneys hear of financial elder abuse suspicions and actual abuse on a regular basis.  Therefore, just because a senior asks for your help, doesn't mean you should help. This is because things can get complicated.

Once you get involved, you may see that there are many moving parts.  There could be an already-troubled senior who’s paying some bills twice and some not at all, or donating money to questionable organizations. Their finances may be in disrepair. Remember, if you don't have the time and aren’t ready to take on a complex process with legal implications, just say no.

Power of Attorney. A power of attorney gives the holder authority to execute certain transactions. While you don't need an estate planning attorney to create up a power of attorney (POA), you're taking a chance if you choose the do-it-yourself route. If you need to obtain a guardianship (or conservatorship) for the senior, you’ll need an elder law attorney. A guardianship gives you the authority to take control of the senior’s finances. There will be a court hearing, and you’ll have to present medical records and be represented by an attorney.

Minimize Risks. It is important to try to minimize the risks for the senior and maximize financial accountability. Monthly bills like utilities can be directly debited from the senior's bank account.  You should never sign the senior’s name on checks or credit card purchases. They may insist that it is okay, but they would be wrong.

Record-keeping. Regardless of the amount of authority you have been given to help a senior or control their finances, it's crucial that you keep meticulous records to protect yourself. POAs should hang on to receipts for everything and never combine their money with the senior's money. You should never borrow money from them, and don’t fall into the trap of believing you’re entitled to money because their family is never involved. That’s financial exploitation, and it is a criminal act.

Communication. If a senior has adult children or close family members, you and the senior should maintain a strong line of communication. One suggestion is monthly reports to at least one other person. It is important to document everything and to make certain that all family members are informed.

Reference: Bankrate (February 15, 2017) “Be cautious before helping seniors with their finances”


CFPB Publishes New Guide to Combat Elder Exploitation

Old ladies in swim caps“CFPB issues guide and best practices to help communities create protection partnerships for seniors.”

The Consumer Financial Protection Bureau’s (CFPB) recent press release, “Consumer Financial Protection Bureau Report Finds Hundreds Of Counties Nationwide Fighting Elder Financial Abuse With Community Efforts,” announced that hundreds of counties around the country have developed coordinated community-based efforts to prevent, detect and respond to elder financial exploitation. The report also found that a strong collaboration among community stakeholders—such as financial institutions, adult protective services and law enforcement—can be very effective in protecting seniors from financial exploitation.

The CFPB has recently released a resource guide and best practices to assist communities across the country in creating their own protection partnerships to fight elder financial abuse.

CFPB Director Richard Cordray said the new guide and recommendations can help more community stakeholders build these very helpful networks to pool information, expertise and resources for addressing this growing crisis.

To address the rapidly growing problem of elder financial exploitation, communities across the country are working to bring together local stakeholders and resources to form protection partnerships. These protection partnerships—also called “networks”—can make it easier for different community stakeholders to detect and respond to elder financial abuse through case review, case consultation, community education, professional training and professional advocacy.

The CFPB’s report takes a closer look at how protection partnerships work in several communities and their effectiveness in responding to elder financial abuse. It found that these voluntary community-based partnerships can increase reporting of suspected financial exploitation cases, improve partner skills and ability to combat financial exploitation, and provide consumer and professional education.

The CFPB’s recommendations include creating protection partnerships that involve law enforcement and financial institutions. The agency noted that professionals and volunteers working with or serving older adults should join to form protection partnerships in communities where they don’t currently exist. The participation of financial institutions and law enforcement is critical to improve response to cases.

Another recommendation is serving rural communities and ethnically, racially and linguistically diverse communities. Protection partnerships in diverse areas should engage stakeholders that serve in these populations—like community-based groups and faith-based organizations, which can support the partnerships’ educational activities and provide expert services. The CFPB’s report also said partnerships should expand into rural areas. These locations are largely underserved by community efforts.

Reference: The Consumer Financial Protection Bureau (August 23, 2016) “Consumer Financial Protection Bureau Report Finds Hundreds of Counties Nationwide Fighting Elder Financial Abuse with Community Efforts”

  • Fill in the form below to download your e-book

    Download your free Avoid These Five Common Estate Planning Myths e-book
  • This field is for validation purposes and should be left unchanged.