How to Prevent Elder Financial Abuse

Quick Answer

Elder financial abuse involves misusing or stealing an elderly person’s money or property for their own benefit, rather than the elderly person’s benefit. Ways to prevent elder financial abuse include carefully guarding financial documents and consistently reviewing bank statements.

An elderly woman frowns as she sits down on the couch and looks outside her window.

Elder financial abuse is a multibillion-dollar problem. In 2020, banks, credit unions and other financial institutions in the U.S. reported possible financial exploitation of elderly Americans totaling more than $3.4 billion. On average, a victim of elder financial abuse loses $120,000 per incident.

Elder financial abuse happens when someone, such as a relative or friend, illegally or improperly uses an elderly person's money or belongings for their own benefit.

Aggravating the problem, according to the FBI, is that elderly people often are trusting and polite. In addition, many of them own sizable assets, such as a retirement account or a home, and they're frequently afraid to report financial scams because they aren't sure how or they're ashamed to acknowledge being victimized. On top of all that, many elderly people suffer from memory loss and other cognitive impairments that can worsen the problem.

Here's how to spot elder financial abuse and steps to take to protect yourself or a loved one.

What Is Elder Financial Abuse?

Elder financial abuse occurs when someone takes or misuses an elderly person's money or property for their own benefit, rather than the benefit of the elderly person (usually age 65 or over). Those most vulnerable to elder financial abuse tend to be 80 to 89 years old.

Warning Signs of Elder Financial Abuse

A number of warning signs can indicate that someone is the victim of elder financial abuse. These include:

  • Unusual banking activity: This could include unexplained, big or frequent withdrawals from a checking account, savings account or another type of financial account. Frequent ATM withdrawals when the person typically doesn't use the ATM is another red flag.
  • Unexpected increases in credit card balances: If the balances on an elderly person's credit cards suddenly climb, this might be a red flag.
  • Insufficient funds: All of a sudden, the elderly person's bank account doesn't contain enough money to cover transactions.
  • Large withdrawals: It could be a warning sign if a lot of money is being withdrawn from an account that had been inactive.
  • Unexplained transfers: Money is being transferred between accounts, yet the elderly person has no knowledge of the transfers.
  • Absence of financial statements: If bank and credit card statements stop showing up at the elderly person's home, it could signal that something shady is happening.
  • Forged signatures: If signatures on financial documents don't match those of the elderly person or their appointed representatives, financial misdeeds could be happening.
  • Sudden changes in financial documents: If you notice that changes have mysteriously been made in an elderly person's will, trust or other financial documents, this may be a sign of trouble.
  • Surprise involvement of distant relatives: If relatives who've never been part of the picture suddenly appear to make claims to the elderly person's assets, something fishy is likely going on.
  • Disappearance of valuables: If jewelry and other valuable property goes missing, it could be the work of someone committing elder financial abuse.
  • Missing benefit checks: If checks for Social Security and other benefits aren't showing up, this may mean elder financial abuse is taking place.
  • Mysterious purchases: Purchases are being made with the elderly person's debit or credit cards, yet the items can't be found.
  • Suspicious wire transfers: Uncharacteristic wire transfers involving large sums of money may indicate elder financial abuse.
  • "Loan" or "gift" checks: If the memo line on checks written by the elderly person indicates the money is a loan or a gift, someone might be ripping off the account holder.
  • Friendly strangers: An elderly person's new "friends," people who are suddenly part of the person's life, may be plotting a financial scam.

How to Report Elder Financial Abuse

Here are seven steps you can take if you suspect someone is the victim of elder financial abuse:

  1. Contact the Adult Protective Services agency in your area. The agency in your location might go by a different name, but all Adult Protective Services agencies are set up to help older adults and disabled adults who've been abused, exploited or neglected.
  2. Reach out to the authorities. If you believe an elderly person faces immediate harm and urgently needs help, call 911. In other situations, call the non-emergency number for your local police or sheriff's department.
  3. Report suspected abuse to the local prosecutor's office. The prosecutor in the county where the elderly person lives may be able to pursue criminal charges against the person who carried out the financial abuse.
  4. Notify the elderly person's bank. If you've uncovered potential abuse tied to financial accounts, alert the elderly person's bank, credit union, credit card issuers and other financial services providers.
  5. Get the nursing home involved. If the elderly victim lives at a nursing home or a similar facility and an employee or volunteer there is suspected of committing financial abuse, contact the facility's administrator or the state agency that licenses the facility.
  6. File a report with a government agency. If you're concerned that an employee of a federal agency like the Social Security Administration or the U.S. Department of Veterans Affairs may be stealing an elderly person's benefits, inform the agency.
  7. Reach out to the court. If you believe a court-appointed guardian or conservator is financially abusing an elderly person, contact the court.

How to Prevent Elder Financial Abuse

While there is no way to reliably prevent all elder financial abuse, elderly people and those close to them can take action to decrease the chances of becoming a victim. Here are some of the recommendations for heading off elder financial abuse.

  • Consult several people about financial decisions. An elderly person should involve close trusted relatives, friends, attorneys and financial professionals when major financial decisions are made.
  • Set up automatic bill payment. Automatic payment of bills creates a record of transactions so an elderly person or their relatives, friends or caretakers can monitor bill-paying activity.
  • Sign up for direct deposit. While direct deposit of Social Security checks and other types of checks won't guarantee that financial fraud will never happen, it does eliminate the opportunity for paper checks to be stolen.
  • Go over bank statements. Statements from banks, credit unions, card issuers and other providers of financial statements should be reviewed every month to help spot suspicious activity.
  • Monitor credit reports. Credit reports should be scrutinized regularly so the opening of unauthorized accounts and other questionable activities can be caught.
  • Store important documents in a safe place. Rather than leaving documents with personal or financial information out in the open, they should be kept in a secure spot, such as in an at-home safe or a safe deposit box.
  • Don't hand over personal data to random people. If someone calls you and asks for information such as your Social Security number, bank account numbers or other financial data, don't provide it. A scammer very well could be on the other end of the phone. The same advice holds true if a stranger contacts you by text or email. Reputable financial institutions and other legitimate businesses will not request this type of personal information by phone, text or email.
  • Be careful when opening a joint bank account. Anyone listed on a joint account has equal access to funds in the account. Therefore, an elderly person should be extremely cautious about who the joint holder of the account is.
  • Shred documents. Any sensitive documents, such as credit card offers received in the mail, should be shredded to help avoid identity theft.
  • Don't sign blank checks. This is an easy way for someone to steal an elderly person's money.
  • Resist pressure. Don't give in to demands from relatives, friends, caregivers or anyone else to do something with your finances that you don't want to do.

The Bottom Line

Both elderly people and those close to them must stay on their toes to guard against elder financial abuse, since crooks have an assortment of ways to financially exploit their elders. One way to protect against elder financial abuse is to regularly get a free Experian credit report to check for suspicious activity, such as new credit card accounts that an elderly person never opened.

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