When you think of scams targeting the elderly, chances are you think of old-school email phishing scams. Maybe the Nigerian prince ploy comes to mind, in which a rich young African royal needs your bank account and routing numbers so he can move millions of dollars out of his corrupt country.

While those types of scams are still around (and still working), they’re only one type of elder financial abuse. Scammers have an infinite number of ways to gain a senior citizen’s trust and steal their money. 

Luckily, there are steps you can take to protect your elderly loved ones from becoming victims of financial abuse.

What is elder financial abuse?

Before you can prevent financial abuse, you have to understand it.

And if you have elderly loved ones, you have to understand it. In 2022, more than 88,000 victims of elder financial abuse lost nearly $3.1B, with an average loss of $35,101 per victim. This total is 84% higher than it was in 2021, proving that scammers have gotten more sophisticated with time.

According to the U.S. Department of Justice, financial abuse is the “illegal, unauthorized, or fraudulent use, or deprivation of use, of the property of a vulnerable adult with the intention of benefiting someone other than the vulnerable adult.”

It’s important to recognize that the perpetrators of elder financial abuse are most often family members, friends, caregivers, or other trusted individuals, not random strangers on the internet. While you do need to make sure your elderly father understands what phishing is, family and friends are more likely to have account access, avoid raising red flags, and be trusted by the older adults around them.

Common types of scams targeting seniors

There are three general types of elder financial abuse: scams, appropriation, and financial neglect.

Scams

Scams involve a bad actor attempting to trick older adults into sharing account information or somehow giving up control over their assets. 

Elder financial abuse scams that are common in Texas include the following.

• Advance fee fraud: an individual is charged a fee to obtain a fake prize or reward, often from a lottery or sweepstakes program that doesn’t actually exist.
• Tech support scams: a scammer pretends to be a representative of a cell phone, cable, internet, or computer company and calls a senior to preemptively “fix” a fake problem for a small fee.
• Counterfeit cashier’s check scams: an individual is asked to deposit a seemingly real check from a scammer who “doesn’t have a bank account” and then asked to withdraw some of their own money to pay the scammer back.
• Travel scams: the promise of a fake free trip (or a luxury trip for an unbelievably low price) as long as a credit card is provided for “incidentals” or “resort fees.”
• Government impersonation scams: a scammer posing as a civil servant or law enforcement officer tells an individual they’re facing jail time or heavy fines unless they pay fake “back taxes” or “entitlement program overpayments” right then and there.
• Service scams: an individual accepts a large deposit for something like yard work, home improvements, or car repairs they have no intention of completing.

Appropriation

Appropriation is a type of financial exploitation wherein someone (often a person the victim trusts) takes a senior’s personal information, assets, or other valuable items for personal use without authorization or permission.

Examples of appropriation abuse include:

• Use of debit cards, credit cards, cash, or checks without permission
• Addition of a name on a savings or checking account
• Withdrawal of money from retirement, investment, or bank accounts
• Intercepting and/or stealing disability checks, Social Security, pension, etc.
• Use of a senior citizen’s identity and open credit cards, get loans, etc. (aka identity theft)
• Signing of important legal documents on behalf of an elderly individual 

Financial neglect

Financial neglect occurs when someone intentionally mismanages a senior’s assets to benefit themselves, denying an elderly individual access to their own assets or accounts or delivers poor care even if there are enough assets to provide better care.

One of the most common types of financial neglect happens when someone slowly removes access to debit cards, credit cards, and checks by offering to take over paying the bills because it’s “too confusing” or “too much work” for their elderly relative. 

Then, instead of keeping accounts current, the perpetrator squanders assets or other funds for their own expenses.

Providing inadequate or subpar care, pocketing the difference in expenses, and denying access to bank statements or credit reports that reveal asset mismanagement also constitute financial neglect.

How to protect your elderly loved ones from financial abuse

There are many things you can do to protect elderly loved ones. Some are easy to do yourself, some require help from an elder law attorney or financial services professional.

1. Designate a power of attorney

A power of attorney gives a trusted relative or friend the authority to make financial, legal, and in some cases, medical decisions for someone who is incapacitated or otherwise unable to make decisions for themselves. A financial POA allows the trusted representative to buy or sell property, manage investment portfolios, oversee banking activities, pay bills, file taxes, etc. 

Power of attorney can be abused by bad actors, so make sure the person selected is trustworthy and accountable to someone else.

2. Appoint a trusted contact for financial accounts

Most financial institutions allow account holders to name a trusted contact who can be contacted when suspicious activity is identified. This trusted contact has view-only access to assigned accounts but cannot make any transactions or withdraw funds, providing an added layer of accountability and protection.

3. Maintain open, honest, and frequent communication

Finances are often a personal, private matter. Not everyone is willing to talk about them openly, especially if there isn’t an existing relationship of trust and respect between parties. 

One of the best ways to prevent elder financial abuse is to keep a running dialogue about everything happening in your senior’s life. You might be able to pick up on behavioral inconsistencies that indicate declining faculties, and they will be more likely to come to you if they start to have problems.

A Texas elder law attorney can help

If you need help creating a plan to keep your elderly loved ones safe from scammers, or if you suspect financial abuse has occurred and need help contacting adult protective services, schedule a consultation with our experienced elder law attorneys today.