When you think of financial elder abuse, the first thing that comes to mind is probably a caregiver siphoning off an older person’s life savings or a shady new “friend” worming his way into a lonely widow’s confidence and sweet talking her into a fraudulent investment. Those types of financial abuse do happen, and far too often.
Other common scams include:
- Persuading an elderly person that he or she has won a sweepstakes or other contest, but must pay fees or taxes before receiving the prize
- Pretending to be a grandchild of the victim who has been arrested, is stranded out of state (or outside the country) or otherwise needs emergency funds
- Tricking the elderly person into contracting for unnecessary repairs, such as home repairs, and then collecting the money without doing any real work
This type of financial crime preys on the hopes and fears of some of America’s most vulnerable citizens. But, there’s another type of financial exploitation of the elderly that is more insidious, often occurs in smaller increments, and may go entirely unnoticed. Often, when the exploitation is recognized by relatives, or by the victim, there’s no remedy available, because the predator hasn’t clearly violated the law.
Financial Exploitation in the Gray Zone
Accurate estimates of the cost of financial exploitation of the elderly are hard to come by. While many sources put the annual cost at about $36 billion, others suggest that it is actually much higher. A 2016 study from the New York State Office of Children and Family Services determined that as few as one in 45 cases of elder financial abuse might be formally reported. Researchers estimated that more than 4% of older New Yorkers were victimized during the single year the study was conducted.
But, according to an earlier TrueLink Financial study, nearly $17 billion of the recorded losses are attributable to forms of financial exploitation that may not technically be illegal. That’s nearly as much as criminal fraud and caregiver abuse combined.
Some common types of exploitation that may be legal, or difficult to prove illegal, include:
- Hidden fees, such as shipping and handling costs or membership fees
- Work from home and other money-making schemes
- Unsanctioned and ineffective weight loss and nutritional products
- Cultivation of excessive gifts, or open-ended loans
- Misleading financial advice
While these types of schemes may impact people of all ages, the elderly may be more vulnerable, may be harder hit by losses, and may be less inclined and less able to take action to recoup losses.
Victims of Elder Financial Abuse Often Keep Quiet
The New York study referenced above is just one of many that suggests that most victims of financial elder abuse never report it. Some common reasons for non-reporting include:
- Failure to recognize that the exploitation has occurred, particularly among those who may be suffering from Alzheimer’s, dementia, or other cognitive impairment or memory deterioration
- Reluctance to admit to friends and family members that they have fallen victim to a scam or entered into a bad deal
- Uncertainty about where to turn for help or whether help is available
Help for Victims of Financial Elder Abuse and Exploitation
If you are a friend, relative, or caregiver for an elderly person and you suspect that he or she is experiencing financial stress, ask questions. Many older people are private about money—they may be uncomfortable volunteering information and you may be uncomfortable asking for it. However, exploitation thrives in the dark, and losses may continue to mount until someone intervenes.
If you have yourself been the victim of financial abuse or exploitation, seek help wherever you are most comfortable, but do seek help. If you don’t have a trusted family member to turn to, consider contacting local law enforcement, or reaching out to adult protective services in your area. Millions of people fall victim to this type of abuse every year.