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Identifying and Dealing With Financial Abuse of the Elderly
by Judy Heft, Judith Heft & Associates, LLC
It is not uncommon for the elderly to become victims of financial abuse. They may be losing -- or already have lost -- some of their cognitive ability, and their judgment may be clouded. The perpetrator can be anyone from a stranger to a friend, caretaker, relative, or trusted financial advisor.
"As people grow older, they grow dependent on others for care, and part of that care means someone must help them with their finances," says Larry Pickard, who supervises the unit that deals with financial abuse of the elderly at San Francisco Adult Protective Services.
I have seen this financial abuse in the course of my own work helping the elderly organize their finances. Mr. Smith (all names in this article have been changed) was 101 years old and living independently in an upscale facility in Fairfield County, Connecticut. None of his children or relatives lived nearby. About three years ago, I started helping him with his bill-paying and financial organization. I visited him twice a month to sort through his mail and help him decide what was junk and what he needed to read. I also took all the bills back to my office to prepare the checks. During the entire time I worked with him, Mr. Smith was very independent, but he was starting to slow down physically. A few months ago, he fell, and it became obvious that he needed 24/7 care to stay out of assisted living. He gave in to having what he referred to as "24-hour surveillance."Â
The home health aide, Maria, came from an agency and was recommended by the facility. She took good care of Mr. Smith, helping him bathe and dress, and staying constantly by his side. She won his trust and confidence. But then . . .
Maria started having Mr. Smith write checks payable to cash for drug store supplies and the few groceries he needed. She also started paying some of the bills, which I believe is how she convinced him to sign the checks over to her. Maria then endorsed the checks with her own signature and deposited them to her own checking account. Since I wasn't a signer on his checking account, I didn't notice this until it was too late. By the time the bank statement arrived, there was a total of $16,000 in either forged checks or checks Mr. Smith had been coerced to sign.
I reported this to the police and Maria was fired from the agency. Since the agency was bonded, it had to make good on the losses. Unfortunately, Mr. Smith was devastated to learn that someone he trusted took such advantage of his sweet, trusting, and generous nature. A few weeks later, Mr. Smith passed away. It was terrible for him to spend his final weeks knowing about this crime.
Family Members Often the Culprits
Financial abuse of the elderly knows no boundaries. It can occur when someone steals or embezzles money, Social Security checks, or other property from an older person. It can be as simple as taking money from a wallet or manipulating a victim to turn over or sell personal property or belongings. In many cases, the financial abuse is done by someone the victim knows and trusts. Family members commit more than half of the crimes of financial abuse of the elderly, according to the National Association of Adult Protective Services Administrators.
Sometimes the abuser has gambling, substance abuse, or financial problems. After Mrs. Green's daughter passed away suddenly at age 50, her teenage granddaughter stole her grandmother's credit cards and charged, with interest, more than $20,000. Mrs. Green's surviving daughter took her mother's medications to feed her own substance abuse problem. This daughter also stole money, perhaps thinking it was "rightfully" hers. Mrs. Green could barely make ends meet, and the fact that her own relatives were stealing from her made it even worse.
Often the elderly are afraid to report this abuse, fearing that their children will consider them too demanding or unfit to handle their finances. They may fear losing an important part of their independence and can be embarrassed that they can't handle the situation themselves. Mrs. Green did not want to report these crimes, because she was afraid of alienating her only surviving daughter and getting her granddaughter into more trouble. She was also depressed over the loss of her daughter.
Americans over the age of 55 control 70 percent of the nation's wealth. Many of the elderly do not realize the value of their assets and how those assets make them vulnerable. A recent FBI investigation found that fraudulent telemarketers were directing nearly 80 percent of their calls to seniors; the elderly are often dependent on others for help, and a "helpful" voice at the end of the telephone line can exert a significant influence.
How to Detect Financial Abuse and What to Do About It
There are many signs to watch for in detecting financial abuse of the elderly. Someone could force an elderly person to sell or give away property or to sign a power of attorney. Valuable objects may start to disappear. There may be unusual activity in bank accounts, such as sudden withdrawals of large amounts, many checks made out to cash, and low bank balances when there should be plenty of available funds. A new "best friend" or "sweetheart" might appear on the scene. Signatures on checks do not resemble the older person's signature. A name may be added to an older person's bank account.
There are several ways to prevent this financial abuse. One way is to have several family members be involved with the older person. Encourage the elderly to become involved with the community, senior centers, or religious groups, which all can provide a strong support system. Take advantage of direct deposit of income checks, including Social Security and dividends. Carefully screen and verify caregivers' references and do a thorough background check.
California Advocates for Nursing Home Reform estimates that only one in six cases of financial abuse is ever reported. Any person who suspects that financial abuse has occurred should report it either to her local police department or to a trusted social worker or adult child, assuming the child is not also the abuser. When in doubt, err on the side of caution. Financial abuse can continue and can escalate if there is no intervention. Reporting the abuse and intervening in time can save the assets, health, and dignity of the elderly.
Judy Heft is a personal financial organizer who provides daily money management and bill paying services to the elderly and people of all ages. She is based in Stamford, Connecticut, and can be reached at: email@example.com and www.judithheft.com