I recently attended an elder abuse presentation provided by several attorneys. The extent of the problem was surprising to me. One study estimates the financial loss to victims is in the billions of dollars. Also it is a crime that is vastly under reported, with less than 5% of victims actually reporting the losses. The victims of these crimes often don’t tell anyone for a whole host of reasons. They may be embarrassed about the loss. They might fear the loss of their independence or have a psychological dependence upon the perpetrator. There also may be cultural factors that play a role.
What was also surprising to me was some of the typical victim profiles. When I think of elder financial abuse, I think of someone with dementia and poor eyesight, living alone. Scientific studies show that people over the age of 55 have lower warning signals to detect untrustworthiness. We start to lose our ability to feel those gut instincts that something is off. We also have significant differences in the ability to interpret facial clues as we age. The takeaway from this is, you don’t have to be that old or senile to be the victim of financial abuse. We slowly start to lose the ability to recognize someone who may not be trustworthy. It isn’t really about dementia, but rather misplaced trust.
The other surprising factoid was the profile of the perpetrators. They tend to be family members, paid caregivers, religious leaders, or new best friends and sweethearts. They tend to be adult male children or relatives. Because these people have close relationships with the victims, the excuses for the abuse lean toward, “It was a loan.” ”I did some work for them.” “I am in the will; I am just getting it early.” “It was a present.”
The saddest consequence discussed was the severe emotional distress this can cause the victim. The trauma can lead to depression, deterioration of health, and a shortened lifespan. Also financial exploitation may be a part of a larger issue of neglect and physical abuse towards the victim.
So what are the warning signs that a family member or friend is a victim of financial abuse? The list is long, but I would categorize them into three areas.
- Changes in account activity – whether it is spending or the paying of bills.
- Changes in possessions – are things missing or are new things purchased that they can’t use?
- Changes in relationships – is the victim agitated when certain individuals are around or new friends or sweethearts are on the scene?
Stay alert to anything that is a change or seems off.
What can we do about the problem? First, spread the word. Everyone should be on alert for themselves as well as their family members. Second, if you suspect abuse, call law enforcement or Adult Protective Services. The Minnesota Department of Human Services provides information on their website as well as the Minnesota Board on Aging. Finally, contact an attorney to put in place some legal tools such as Power of Attorney, Trust, or Guardianship documents to protect you and your family before abuse occurs.
Kristi L. Andersen is the principal of Kristi L. Financial Partners, LLC. (www.KristiLAndersen.com) Securities offered through and Registered Representative of Cetera Advisor Networks LLC, member FINRA/SIPC. Some Advisory services offered through AdvisorNet Financial. Cetera is under separate ownership from any other named entity.