Preventing Financial Elder Abuse

Whether the abuser is an outsider or a family member, here's what to look for

Elder abuse doesn't always mean physical harm. In its financial form, it's the exploitation of people to gain access to their property, investments, cash, or real estate.

As the recession drags on, some law-enforcement officials and attorneys say they're seeing an up tick in reports of elder fraud committed by strangers, friends and most commonly, by family members.

Abuse by relatives and “friends” By far the most disturbing abuse is by family members, or “friends”. People closest to seniors who seem reliable can turn bad from greed or desperation. They can abuse power of attorney or a joint account to siphon funds. 

Relatives and friends entrusted with the elder person's welfare commit such crimes with alarming frequency.  Steven Peck, an elder-law attorney in Van Nuys, Calif., estimates that someone in the immediate family is responsible for over 75 %of elder abuse.  Philip Fornaci, an attorney in Washington DC specializing in disability law and fraud prevention, cites family members/friends commit a number approaching 90% of financial fraud against seniors and disabled people.

Paul Greenwood, a deputy district attorney in San Diego and head of the office's elder-abuse prosecution unit advises caution in assigning power of attorney to a relative. He recommends seniors appoint a bonded, licensed professional such as an estate attorney with expertise in elder law, a financial planner, or a bank officer, rather than a relative. 

Law-enforcement and social services professionals see exploitation rising sharply. Rhode Island Attorney General Peter Kilmartin’s office opened 128 financial-elder-abuse cases in 2011, a 40 percent rise from 2010. Paul Greenwood says his office will prosecute about 200 cases this year. “I’ve never been busier,” he says

Take these steps to protect seniors:

Order a background check
Don't assume that a placement agency will do a thorough criminal check and drug screen on caregivers. Insist on a national, rather than state, criminal check. Ask for proof that the agency is bonded and has adequate liability insurance.  Hire an agency rather than a private caregiver who can far more easily take advantage of a senior in his/her care.

Protect identity and property Don't leave incoming or outgoing mail in an unsecured mailbox. Shred documents with identifying information. List and photograph all jewelry and valuables. Keep the items in a locked drawer and the photographs in a separate place.

Arrange for another pair of eyes.  Have financial institutions send monthly statements to an objective trusted professional adviser to check for inaccuracies and fraud.

Be careful with powers of attorney. Powers of attorney can be easily misused because they allow the appointed person to step into the senior’s shoes, taking money from their accounts and borrowing money in their name. Arrange for a provision in the power-of-attorney document to have a third party review the appointed person's actions, or mandate joint powers of attorney

Verify if the senior is indeed incompetent by two physicians.  Family members will often cite seniors as “incompetent” to understand simple concepts, when they are in fact quite cognitively aware and should participate in decisions about their finances and care.

Closely monitor credit card, bank and investment account activity. Seniors should review all account statements as soon as they receive them and look for unauthorized or suspicious transactions, which should be reported to your bank immediately.

The Financial Fraud Enforcement Task Force (FFETF) advises that fraudulent activities always be reported to your local law enforcement office. Check out the FFETF website for additional information about how to report specific types of fraudulent crimes: 

http://www.stopfraud.gov/report.html ■