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.
Examples of Financial Abuse
Elder financial abuse is when an older adult is financially exploited by a friend, family member, caregiver, or another fiduciary party. This specific kind of abuse can leave seniors destitute after decades of hard work to save money for retirement.
As we get older, many need the help of others to manage their finances and care for them as their own ability to do so decreases. This is especially true in any cases where someone has Alzheimer’s or dementia, as these conditions cause mental functioning to decline.
These positions of trust and authority allow individuals close to elderly individuals the opportunity to exploit the financial resources they are in charge of managing. This includes theft, the unauthorized use of an older person’s assets, gaining power of attorney through trickery, engaging in fraud, hiding, secreting, or appropriating assets, and financial neglect.
Unfortunately, older people may put their trust in family members who do not have their best interests at heart. Whether it’s a relative, friend, or caregiver, anyone may try to steal an elder’s finances in various ways.
Here are some key examples of elder financial abuse:
- Scams: This mechanism for financial abuse typically involves a predator who is seeking to trick or scam a senior into relinquishing control over their assets or personal information.
- Appropriation: This involves a caregiver or family member taking an item or asset belonging to an elderly individual without permission. This could be a vehicle, credit card, or other assets.
- Financial Neglect: This includes but is not limited to: squandering or negligently mismanaging the money, property, or financial assets of an elderly adult, withholding necessities or utilities in a timely manner, or providing subpar care to a vulnerable adult despite the availability of adequate financial resources.
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.
How do I prove Financial Elder Abuse?
Financial elder abuse is difficult to prove to a court of law depending on the circumstances of how the abuse occurred.
Typically, to prove a financial elder abuse claim, you need to establish:
- That it is “more likely than not” that the abuse did happen
- That the victim was 60-65 years or older (depending on the state) when and at what time the abuse occurred
- That the person knew or should have known that this negligence would cause harm to the elderly victim.
Proving that the abuse occurred can often be difficult depending on the arrangement of finances and what financial records have been retained.
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.
Criminal Charges for Financial Elder Abuse in California
Depending on the type of negligence committed, elder financial abuse may be considered a criminal act. California created Penal Code § 368 provides criminal penalties for elder abusers who have committed theft, embezzlement, or any financial fraud.
In such a case, the victim can bring any number of associated criminal charges, or they may choose not to.
In general, California does not see a majority of victims filing criminal charges. This could be because most elder financial abuse’s culprits are often close family members or loved ones. In this case, the victim is typically more concerned with rectifying the situation financially—they don’t necessarily want to place anyone behind bars.
If a victim does decide to file criminal charges for whatever reason, they may result in a misdemeanor or a felony instead.
Here is what the potential charges can result in:
- Misdemeanor: Misdemeanor elder financial abuse claims can result in fines up to $1000 and jail time up to 1-year maximum. Those guilty of a misdemeanor may be eligible for summary probation and will not have a strike on their legal record.
- Felony: Those guilty of felony elder financial abuse claims face fines up to $10,000 and state prison sentences between 2 to 4 years in length. If great bodily injury or death occurred as a result of the abuse, an additional 3 to 7 years of prison can be added to the sentence. In felony cases, there may be the opportunity for formal probation.
What Are the Warning Signs of Elder Financial Abuse
Unlike other types of abuse, financial abuse can be much harder to detect since there are no physical warnings. Furthermore,because elder financial abuse can take multiple forms, it can be difficult to identify when abusive behavior is occurring.
Examples of common warning signs of elder abuse include:
- Forgeries on legal documents and checks
- Large bank withdrawals or account transfers
- Sudden mood changes (depression, anxiety, etc.)
- New changes to wills, trusts, or powers of attorney.
- Recently signed documents the elder didn’t understand
- Unpaid bills or eviction notices
- Utility or service cutoffs due to non-payment
- Unexplained financial withdrawals or purchases.
Preventing Elder Financial Abuse
When it comes to financial exploitation, helping older adults prevent this issue can be delicate and hard to deal with. The challenge often lies in taking steps to reduce the chance of exploitation. It often requires older adults to do two things that most elders find difficult or uncomfortable.
The first thing they must do is realize that they are at risk of abuse. This acknowledgment that they are potentially vulnerable or have cognitively declined is difficult for many people to swallow. The second issue is convincing the elder to give up some of their privacy and autonomy. This is necessary for prevention since so many of the warning signs of financial abuse are subtle or only discoverable on financial statements.
Understandably, many people refuse to give others the ability to review their financial decisions and intervene in their autonomy. Still, such sacrifices are necessary if there is to be any kind of preventative action to ward off financial abuse.
Once an elder has agreed to get help reviewing finances to monitor for signs of abuse, the next best steps are to: simplify finances, review authorized individuals on accounts, and develop a method to allow trusted individuals to review your accounts monthly or as needed.
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.
Los Angeles Financial Elder Abuse Attorneys, Stone & Sallus, have decades of combined experience helping families navigate complex and difficult financial journeys. We look forward to serving you.
When to Contact A California Financial Abuse Lawyer
Professionals with fiduciary requirements such as financial advisors or attorneys can also help advise as to the best way to protect oneself or a loved one from financial abuse. These professionals can also be used as an independent third party to help review for signs of abuse if necessary. They can also be given the power to intervene if it seems warranted.
In the same way that individuals should feel the urge to visit and speak with a doctor when faced with medical questions, it is highly recommended to seek the counsel of legal professionals (preferably those who specialize in senior law) when confronting questions regarding elder financial abuse.