The Crime of the 21st century – Elder Financial Abuse
“While her mother was in the hospital, Karen moved her mother’s silver tea service, some valuable books and a grand piano to her own home. When her mother returned from the hospital, she asked the police to assist her in recovering her stolen property. Karen stated that she had taken the goods for safe-keeping and that these items are heirlooms belonging, not just to the mother, but to the entire family.”
Vancity`s 2014 and 2017 reports on Financial Abuse in Lower Mainland and Capital Region revealed more that than a third of the senior population, who are over the age of 65 had been a victim some form of financial abuse. It is an embarrassing situation and mostly happens at the hands of that senior’s adult children or grandchildren. So, why the numbers are so high? Perhaps it is hard to identify?
"Both the abusers and the victims may not recognize the actions as abusive. Elder abuse is a serious issue that undermines the independence, dignity, health, and sense of security of the victim."
What is Financial Elder Abuse?
Financial exploitation of an elder is the misuse and/or exploitation of an older adult’s funds and assets without that person’s knowledge and/or full consent. It often starts when family members are given power of attorney. A “Power of Attorney” (“POA”) is the legal document through which the donor grants the power to the attorney to ‘step into the donor’s shoes’ and act on their behalf in legal and financial matters. This authority can be limited by the terms of the document. Although the power of attorney or joint bank accounts is not created for malicious purposes, they sometimes end up that way.
Indicators
According to Seniors First BC, some common Financial Abuse indicators are:
- Standard of living not keeping up with income or assets;
- Unusual or inappropriate activity in bank accounts,
- Overcharging for services or products, overdue bills;
- Missing property;
- Forged signatures on cheques; or
- Forcing a person to sign over property or execute a Will or Enduring Power of Attorney1( “EPOA”).
The role of Life-Changing Events in Financial Abuse
Life-changing events may increase the potential for financial abuse of an older adult. These can be things like;
- widowhood for a woman with little or no experience with financial matters
- when an older person’s health is changing, and he/she begins relying on new-found friends
- when cognitive capacity is starting to decrease
- when a person becomes dependent on others to aid with banking or shopping and more…
Typical Financial Exploitation Scenarios
Undocumented Loans
Older adults with some money or a house will often be pressured by family members for;
- Emergency loans;
- Places to live when they are out of a job;
- Help to pay for higher education (university);
- Assisting with major purchases (e.g., a car);
- Help to avoid bankruptcy (adult son/daughter) at the point of losing business or home.
Most family loans are undocumented. The borrower may later claim it was a ‘gift unless the adult child can show proof otherwise (e.g., money was in a birthday card). The legal presumption’ that these types of advancements from an older adult to an adult child are considered a loan rather than a gift.
A care-giver befriends a senior and persuades him or her to open a “joint-account” so that she can assist with bill paying and getting cash from the account as required. Within a few months, the senior discovers that the account has very little money remaining. A considerable amount of money has been withdrawn. Because it is a joint account, either party can take money out of the account.
Joint Bank Accounts
An older adult may set up a joint bank account with a relative or friend to help with banking chores and paying bills. Or older adults will often put another person on the title of a car or real property, such as a home. But this may create another “a license to steal” because each signer on the account has accessibility to 100% of the money at any time.
How to Protect Elders From Financial Exploitation;
- Adding more than one person with power of attorney creates more accountability among family members.
- Assigning a “Financial Power of Attorney,” which gives the appointee control over assets, but also binds them by statute to act in elder`s best interest.
How to Report Financial Abuse?
If you suspect you or someone you love is being taken advantage of financially and your funds or property are about to be mishandled, please make sure to follow these emergency procedures below. Let`s do our part to support our elders to stop living in fear and silence and help them to enjoy their retirement years.