Financial Abuse and Exploitation of the Elderly and How to Protect Yourself

Elder abuse or exploitation is any intentional act or failure to act by a caregiver or another person that causes or creates a risk of harm to an adult aged 60 or older. Elder abuse can be physical, emotional, or sexual in nature. It can also take the form of neglect. Each form of abuse violates the trust an older person places in others and threatens their health and dignity. The federal Elder Justice Act was enacted to establish a coordinated response to these issues.

The National Elder Mistreatment Study, an eight-year study conducted under the auspices of the National Institute of Justice, a research agency within the U.S. Department of Justice, identified financial abuse and exploitation as one of the most prevalent types of elder abuse. This is a specific type of abuse, legally defined as the illegal, unauthorized, or improper use of an elder’s funds, property, or assets. This includes forcing an individual to act against their financial interests or taking control of their resources for another person’s benefit. 

Generally, the term financial abuse applies to behavior perpetrated by an elder’s friends or family. By contrast, the term financial exploitation generally applies to behavior perpetrated by strangers. Below are some specific types of financial abuse and exploitation.

Financial Abuse:

• Power of Attorney Abuse – In this type of financial abuse, the person whom you have named as having a power of attorney on your behalf engages in financial exploitation of you by using their power of attorney and, for example, taking out money from your bank for their own benefit, or selling your stocks for their own enrichment. 
• Using an Elder’s Credit or Debit Card – In this type of financial abuse, someone takes your credit or debit card and uses it to buy things for themselves without your knowledge or approval.
• Theft by a Trusted Professional – Many elders have bankers, lawyers, and other professionals they trust, who often have access to their bank accounts, stock portfolios, etc. It is financial abuse when such a trusted professional takes advantage of your trust and goodwill and gains access to your financial accounts for nefarious purposes.
• Extortion – Extortion occurs when someone you trust threatens you unless you give them something of value, such as money or belongings. In some cases, people extort from elders by threatening to withhold care or assistance unless the elder gives them something of value.
• Forgery – Forgery occurs when someone signs your name, for example, on a bank withdrawal form, in order to take your money or other belongings.

Financial Exploitation (Typically Perpetrated by Strangers):

• Romance Scams – In this type of financial scam, you are typically contacted online, perhaps through social media, a dating website, or an online game, by someone who tries to gain your trust and then asks you for money. The scammer will tell you they’ve fallen in love, but have some reason they can’t meet in person. The scammer will start asking you to send money so they can meet you, deal with an emergency, start a business, or help you “invest”, sometimes in cryptocurrency.
• Government Scams – In this type of financial abuse, someone will contact you either by phone or online, claiming to be from the Internal Revenue Service or Social Security Commission, or a similar government agency, and claim that you owe money, or that there is a problem with your account, or that you are a suspect in a crime. They will often give you an account number associated with a bank or other financial institution and ask you to deposit money into it.
• Grandparent Scams – In this financial scam, you will receive a phone call from a person who says that a loved one, typically a grandchild, is in trouble and that you must send money to help the grandchild avoid a police investigation or time in jail. 
• Investment Scams – In this type of financial scam, someone will call you and offer an investment opportunity that seems like a great deal. Scammers trick you into putting your money into stocks, real estate, cryptocurrency, or other assets that they can then access.

How to Protect Yourself

Financial abuse and financial exploitation can occur in your own home as well as in institutional settings. So, what is the best way to project yourself from these types of situations? 

Organizations such as the American Association of Retired Persons have many specific examples of how to keep yourself safe from situations of financial abuse and financial exploitation. Two suggestions rise to the top of the list in our opinion as Long Island elder lawyers. 

First, it’s important to have at least one trusted family member or friend who can help you identify potential scams by being a financial confidante — an objective party you can consult before making big purchases or money transfers to ensure that they’re smart and legitimate. 

The second suggestion is to reframe the way you think. In these modern times, it’s best to rethink being responsive to calls, emails, and texts from strangers. Learn how to avoid engagement. You are under no obligation to respond to calls, emails, or texts from strangers — especially given that so many of them are fraudulent and whose objective is to scam you out of your money. One option is to add your family, friends, doctors, and other important numbers to your phone contact list, then turn on the setting for “silence unknown callers.” This will send any caller who isn’t in your contacts list directly to voicemail.

Contact Our Long Island Elder Lawyers Today

At Davidow, Davidow, Siegel & Stern, LLP, elder law is what we do. We care about our senior clients and work closely with them to help them maintain a high quality of life. This includes educating them about estate planning, Medicaid Law, and how to protect their financial security. Contact us today to see how we can help you or your loved ones.