What it is, and what to do to prevent it

Stephen Trefts, President

Financial exploitation of the elderly has always been a major problem, and one that I see all to often in our community.  Exploitation can take many forms, all of which are designed to use the vulnerable individual’s assets for the personal gain of the exploiter.  Exploitation can take the form of:

  • Selling unneeded items to a vulnerable person, often at unreasonable prices
  • Charging exorbitant fees for services
  • Accepting “gifts” from an incapacitated person 
  • “Borrowing” money or personal items and refusing to return them
  • Theft of money or personal items, such as jewelry
  • Unauthorized withdrawals from financial institutions or misuse of credit cards
  • Misuse of a Power of Attorney
  • Changing wills, trusts or other estate plans to benefit the exploiter

In our role as trustee, we have seen many instances of elder exploitation.  The offenses have run the gamut from overselling expensive cosmetics to a vulnerable person to having a terminally ill individual change his will in favor of the exploiter.  Usually, the exploiter has been an individual in whom the vulnerable person has a great deal of trust, such as a family member or a caregiver.   Sometimes, the exploiter is an outsider, such as a telephone or computer scammer, or a new “friend.” 

If you are a friend or a relative of an elderly or vulnerable person, you should watch for these signs of financial exploitation:

  • Change in banking habits, i.e. numerous withdrawals or increased ATM activity
  • Unusual withdrawals from investment accounts
  • Increased credit card charges
  • Changes in account signers, beneficiaries or property titles
  • Changes in estate plans or in Power of Attorney
  • Caregivers or new friends taking an unusual interest in financial affairs
  • Fearfulness or reluctance to discuss financial matters with formerly trusted advisors

The best way to avoid financial exploitation is to reduce lifestyle risks.  Loneliness makes a vulnerable person a prime target.  It is important that the vulnerable person has family or friends who will visit and check up on them frequently.  A lack of financial accountability is another risk factor.   A trustworthy and reputable person should routinely monitor bank, brokerage and credit card statements for signs of unusual activity.  Finally, there should be a plan in place for a reputable individual or firm to assume management of financial affairs in the event of incapacity.

Print date:  Fall 2006