Elder Financial Abuse

Each year, hundreds of thousands of older persons are exploited, neglected, or abused. Victims are people who are older, frail, and vulnerable and often depend on others to meet their most basic needs. Abusers of older adults may be family members, friends, or “trusted others.” In general, elder abuse is any intentional or negligent act that causes harm or serious risk of harm to a vulnerable adult. Legislatures in all 50 states have passed some form of elder abuse prevention laws. While federal definitions of elder abuse first appeared in the 1987 Amendments to the Older Americans Act, these definitions are only guidelines.

  • Institutional abuse generally refers to any of the following types of mistreatment that occur in residential facilities (such as a nursing home, assisted living facility, etc.) and is usually carried out by someone with a legal or contractual obligation to provide an element of care or protection.
  • Domestic abuse generally refers to any of the following types of mistreatment committed by someone with whom the elder has a special relationship (for example, a spouse, sibling, child, friend, or caregiver).
  • Physical Abuse—Inflicting, or threatening to inflict, physical pain or injury on a vulnerable elder, or depriving them of a basic need.
  • Emotional Abuse—Inflicting mental pain, anguish, or distress on an elder person through verbal or nonverbal acts.
  • Sexual Abuse—Non-consensual sexual contact of any kind, coercing an elder to witness sexual behaviors.
  • Financial Exploitation—Illegal taking, misuse, or concealment of funds, property, or assets of a vulnerable elder.
  • Neglect—Refusal or failure by those responsible to provide food, shelter, health care or protection for a vulnerable elder.
  • Abandonment—The desertion of a vulnerable elder by anyone who has assumed the responsibility for care or custody of that person.

Financial Exploitation

Although all these types of abuse are serious, as a financial institution, AmeriCU is most concerned with financial exploitation.  In September 2013, seven U.S. agencies* overseeing various financial industries came together to publish Interagency Guidance on Privacy Laws and Reporting Financial Abuse of Older Adults. According to these guidelines, elder abuse “…includes the illegal or improper use of an older adult’s funds, property, or assets. Recent studies suggest that financial exploitation is the most common form of elder abuse and that only a small fraction of incidents are reported. Older adults can become targets of financial exploitation by family members, caregivers, scam artists, financial advisers, home repair contractors, fiduciaries (such as agents under power of attorney and guardians), and others. Older adults are attractive targets because they may have significant assets or equity in their homes. They may be especially vulnerable due to isolation, cognitive decline, physical disability, health problems, and/or the recent loss of a partner, family member, or friend.”

According to the Consumer Financial Protection Bureau (CFPB), examples of financial abuse include:

  • Exploitation by an agent under Power of Attorney or person in a fiduciary relationship;
  • Theft of money or property, often by a caregiver or in-home helper;
  • Investment fraud and scams, including deceptive “free-lunch seminars” selling unnecessary or fraudulent financial services or products;
  • Lottery and sweepstakes scams;
  • Scams by telemarketers, mail offers or door-to-door salespersons;
  • Computer and Internet scams;
  • Identity theft;
  • Reverse mortgage fraud; and
  • Contractor fraud and home improvement scams.

The CFPB maintains lots of useful information for older Americans to protect themselves against financial abuse. Their top five suggestions are:

  1. Ask questions about your money.
  2. Never give out personal information, such as account numbers, over the phone or online unless you know the company and initiated the call.
  3. Before retiring, find out how your pension plan (or your spouse’s) works. Learn the rules for social security benefits.
  4. Your home may be the most valuable asset you have. Before you do anything that would put your home on the line, make sure you understand what you are doing and can explain it to a friend using your words. Be very careful when considering a reverse mortgage.
  5. Just say no.  If you feel pressured to make a decision, chances are you ARE being pressured. It may be hard, especially if it is a friend or relative, but just saying “No, I am not interested,” may save you from being scammed.

Reporting

Often, financial exploitation is unreported for a variety of reasons. In some cases, victims are ashamed to admit and/or blame themselves for being “stupid” or “too trusting”. Others are in denial or simply unaware of the abuse.  Still others are reluctant to report a family member or caregiver either out of love and loyalty, or out of fear of retaliation, of losing the abuser’s support, of not being believed, or of losing their independence.

AmeriCU is here to help!

If you are a member of AmeriCU and suspect that you may be a victim of financial abuse or exploitation, we can help you.  We can act as your advocate and can help you safeguard your accounts and contact the proper authorities if necessary. Our telephone number is 1.800.388.2000 and our email address is support@americu.org.

Additional Resources

*Board of Governors of the Federal Reserve System (Federal Reserve), Commodity Futures Trading Commission (CFTC), Consumer Financial Protection Bureau (CFPB), Federal Deposit Insurance Corporation (FDIC), Federal Trade Commission (FTC), National Credit Union Administration (NCUA), Office of the Comptroller of the Currency (OCC), and Securities and Exchange Commission (SEC).