Spotting financial abuse of the elderly is not always a transparent process. It may be hard to discover. But if you're monitoring what an older person is doing and how they are acting, it may be much easier.
Often the abusers are people who are friends and relatives. A 2010 national study found that "over 5% of Americans ages 60 and older were financially exploited by a family member in the past year, and in 2011, approximately 7% of adults ages 65-74, and 6.5% of adults age 75 and older were defrauded by strangers," notes SIFMA, the securities trade association,
While these crimes share similar risk factors, elder financial exploitation is committed by people who occupy traditional positions of trust, such as friends and relatives, and fraud is typically perpetrated by strangers.
With financial abuse, the best place to start is to observe behavior. There are certain warning signs that they are vulnerable. Here's what to look for:
- Poor Physical Health
Those who are physically compromised are unlikely to be focused on financial matters. They are often vulnerable to swindles.
- Cognitive Impairment
When the ability to do basic things like read a banking statement or balance a checkbook declines, that's when you have to pay attention. Those with declining math skills will not be asking important questions about new investing "opportunities."
- Difficulty in Activities of Daily Living
If a person has trouble feeding themselves, bathing or shopping, that's a big set of red flags. That also means that they will have trouble managing money.
- Social Isolation
Are they all alone? Then they won't have the support of a network of peers, who could warn about scams.
In general, having strong social connections -- whether with family or friends -- can help curb financial abuse. Others can vet potential swindles.
When adults are well connected to those around them, and those around them are well connected with each other, they in turn often act as a sort of watchdog over the actions of the others.
This deters potential perpetrators from gaining too much influence over the elder."
It's no secret that swindlers know that an elder who is isolated from family and friends is an easy mark. Notes Marguerite DeLiema of the Stanford Center on Longevity:
"Social isolation is not only a potential risk factor for financial victimization, it is also a tactic perpetrators use to manipulate their victims and hide acts of exploitation," Prof. DeLiema states.
"Fraudsters and financial exploiters use undue influence - the substitution of one person's will for the will of another (Quinn, 2000) - to limit and control an older person's social interactions, thereby creating a sense of powerlessness and dependency.
This makes elders easier to manipulate, even if they are mentally competent. In one of the elder fraud cases I studied, a caregiver isolated the older person from her family and withheld food to coerce her to sell property and fire a long-term accountant."
Have they been approached by "new" friends? Have they been offered a "unique" investment opportunity. If you listen closely enough, you'll be able to stop scams before they go too far.