By: AnnaMarie Mock, CFP®
Financial elder abuse involves family members, caregivers, or professionals that illegally exploit an older individual for their monetary assets and property for their financial gain.
It is estimated that elder financial abuse costs older Americans upwards of $36 billion. According to the National Council On Aging, 1 in 10 Americans aged 60+ have experienced some form of abuse, but only 1 in 14 cases are estimated to be reported to authorities.
The Federal Trade Commission (FTC) documented that those aged 70-79 reported losses greater than any other age group for an average loss of $45,300.
Elder abusers can be family members, caretakers, neighbors, or professionals and usually develop close relationships with their victims to manipulate their finances over time. However, seniors can be targeted by anonymous fraudsters trying to collect money through imposter, debt collection, and identity theft scams.
In the FTC report, about 51% of the cases identified strangers as the culprit for exploitation, 36% as an existing relationship (including family, friends, and professionals), and 14% did not indicate.
As a fiduciary wealth advisory firm, we focus on developing and maintaining long-term relationships with multiple generations of families. We are trained to recognize the warning signs that can lead to financial abuse.
Signs of Financial Abuse
Common signs of financial exploitation include:
Introduction of a new relationship where they show excessive interest in their finances
Substantial changes to existing financial habits, such as;
Sudden new credit card balances inconsistent with lifestyle changes
Dramatic change in spending habits
Atypical wire transfer requests
Large, unusual withdrawals
Establishment of new joint accounts
Unusual urgency to make an investment or transaction
The client makes abrupt changes to financial documents, such as a power of attorney, account beneficiaries, wills, trusts, etc., that are not in line with what was discussed.
The client shows an unusual degree of fear or anxiety toward their new relationships.
The client shows unusual excitement over an investment opportunity or financial windfall
A new relationship improperly conducts financial transactions without proper documentation or has inauthentic signatures on documents
We provide our client's peace of mind knowing we can identify warning signs of financial abuse and provide guidance to act immediately. Suppose you or a loved one is experiencing any warning signs. In that case, you should reach out to a trusted advisor for a second opinion before making any financial or estate planning decisions. For more details about popular scams and how to report an incident, check out an earlier article - "Don't Fall For These Common Financial Scams". Please feel free to reach out to the HIGHLAND team with any questions, popular scams, and how to report an incident.
Author’s Bio
AnnaMarie Mock is a CERTIFIED FINANCIAL PLANNER™ and Partner at HIGHLAND Financial Advisors, LLC, a Fee-Only financial planning firm that offers comprehensive financial planning, retirement planning, employer retirement planning, and investment management. AnnaMarie graduated from Montclair State University with a degree in finance and management and successfully passed the CFP® national exam in 2016. She has been working at Highland Financial Advisors since 2013 as a fee-only, fiduciary Wealth Advisor and is a member of NAPFA.