Discovering that an elderly loved one is being financially abused sometimes does not occur until it is too late. The abuser has already done significant damage, stealing possessions and cleaning out bank accounts.
Findings by a Securities Industry and Financial Markets Association (SIFMA) study revealed:
- More than five percent of Americans ages 60 and older suffered financial exploitation by a family member in 2010
- During the following year, approximately seven percent ages 65 to 74, and 6.5 percent ages 75 and older were defrauded by strangers
The study also reveals a distinction between mistreatment and cons. Friends, relatives and others in positions of trust usually commit elder financial exploitation. Outright fraud is typically perpetrated by strangers.
Short of catching the culprit or culprits red handed, careful monitoring of their actions and emotions can go a long way to identifying abuse early or outright preventing it.
Warning signs to look for include:
- A decline in the ability to perform the most basic tasks – At a certain age, reading a banking statement or balancing a checkbook presents significant challenges. Those suffering severe cognitive impairment often fail to ask important questions about so-called investment “opportunities.”
- An older person in poor physical health who is particularly vulnerable to scams – An elderly family member can become easily compromised because of a physical state that results in a lack of focus on financial matters.
- An elderly person unable to navigate activities that are part of their daily lives – Anyone who has challenges in feeding themselves, bathing or shopping may not be the best authority in managing their money and assets.
Strong connections to dense social networks can make a significant difference. Isolation denies them access to a supportive network of family, friends and peers. Closer relationships allow trusted loved ones to serve in watchdog roles, warning their family member of possible scams or vet possible swindles.
Perhaps the best safeguard against financial abuse is getting family and friends involved early. The most simple of conversations can uncover information about so-called “new” friends and “unique” investment opportunities.