Older Americans have spent years building up their savings and assets or working at a job that provides a decent pension. Along with their Social Security checks, these are all assets that nefarious characters can find appealing. Unfortunately, elder financial abuse is a common occurrence. Victims may lose some or all of their savings that they were planning on using for their needs, and getting some or any of it back may be difficult.
What is elder financial abuse?
The term elder financial abuse only refers to the target of a variety of scams and techniques unscrupulous people use to obtain money from senior citizens in the United States. Unfortunately, these crimes can range from phone calls asking for personal identifying information or payment information to a trusted family member writing checks without the person’s knowledge.
One of the things that makes it difficult to understand the scope of elder financial abuse is the small amount of data on the subject. There is no federal law regarding the practice, and collecting data from individual states can be difficult. However, the National Center on Elder Abuse indicates that perhaps one in three cases of elder abuse included financial misappropriation, and those were only the cases reported to state authorities.
Warning Signs of Elder Abuse
People who commit fraud rarely want to face scrutiny. Therefore most signs of elder financial abuse come from performing a review of existing financial accounts and watching out for new ones. For example:
- Any new and unusual activity in a bank account, such as frequent or large withdrawals
- Stock sales or purchases far outside the range of a senior’s normal range
- Bills that go unpaid
- Changes to wills, trusts or power of attorney where the family isn’t given a heads up
- New people in a senior’s life who seem to have control over finances
These are just a few of the major signs that an older American could be at risk for fraud. There are countless others, as has been previously noted.
Elder Financial Abuse by Family Members
It’s also unfortunate but true that many family members may take advantage of their aging relatives. Some may feel like they are being taken advantage of themselves, or missing out on the life that they want to lead. Whatever the reasons, these parties are often in a position of trust and also may have access to financial account login information or be friendly with staff at local banks.
What to do if you’re a victim of elder financial abuse
If you or someone you know is the victim of elder financial abuse, you need to make sure to stop the flow of funds outside of that person’s control. Contacting their power of attorney, if they have one, or their banks, can be a start. You may also want to notify their attorney, if they have one, as well as state regulators regarding banking and securities.
You may need to enlist the help of an elder financial abuse lawyer to assist in recovering any lost assets. If you are, be sure to look for ones with experience working in probate court and with complex financial structures.
Elder Financial Abuse Laws by State
Many states offer various legal remedies for victims of elder financial abuse. There are the common law protections regarding contractual obligations of financial advisors and those who have a fiduciary responsibility to an elderly relative. In addition, many passed versions of a model act provided by the North American Securities Administrators Association (NASAA), a group of state securities regulators.
Those 32 states include some of the largest, including California, Florida, New Jersey, Texas and Virginia. The act specifically requires mandatory reporting by bank agents and financial advisors to state agencies like adult protective services and the state’s securities regulator. They may also be able to delay disbursements of transactions they believe are fraudulent.
Where to Report Financial Abuse of the Elderly
As noted in the mandatory reporting guidelines for the recent elder abuse laws, you can start by contacting two state agencies: the one that handles security regulation if there is the possibility of annuity or stock fraud and/or the agency on aging or adult protective services.
Be extremely careful to not go overboard when it comes to who you tell. While it can be a shock, you are not a private investigator and may unwittingly warn someone who is in touch with the alleged fraudster. If that occurs, it can become extremely difficult to recover funds on behalf of a loved one or respected relative.
What is the punishment for elder financial abuse?
The penalties for elder financial abuse largely depend on the path taken by the victim or the victim’s advocate. Many seek to first pursue a claim in civil court, in part to get their money, real estate or other property back. In addition to the initial value of the asset, someone who hires an experienced elder financial abuse lawyer may also seek:
- Any interests, gains or profits arising from the initial amount taken
- Treble damages
- Punitive damages
While the facts of each case and the ability of one’s representation affects any outcome, the possibility of additional damages can lead some defendants to settle out of court. However, in some states like California, the allegedly-wronged party may also seek to press criminal charges.
In that situation, the penalties depend on whether the crime is classified as either a misdemeanor or a felony. Jail time of one year and a fine of $1,000 for the former and four years in jail and a fine of up to $10,000 in the latter.
How to Protect Yourself or Loved One From Financial Elder Abuse
It can be difficult to understand the true depth of any financial elder abuse, and the emotional impact of the discovery is significant itself. If you believe that you or a loved one have been defrauded of funds, consider the value of working with an elder abuse attorney who can help you recover the funds lost as a result of wrongdoing.
At Stone & Sallus, we have decades of combined experience helping families navigate complex and difficult financial journeys. We look forward to serving you.