Know the Signs of Elder Financial Abuse

As the American population ages, older generations have become a target for financial exploitation. Because these crimes are often underreported, we may never know how much money is lost. Financial institutions reported $27 billion in suspicious activities between June 2022 and June 2023.¹ What can you do to help elderly relatives not fall victim to financial fraud? Read on to learn more.

What Is Financial Abuse?

Elder financial abuse involves the fraudulent, misleading or illegal actions by a caregiver, family member, fiduciary or other individual for personal gain, depriving the victim of the benefits or assets they are entitled to.

Financial abuse can take many forms. Two of the most typical are elder scams (financial fraud) and elder theft (financial abuse). Elder scams involve the transfer of funds to a stranger or imposter for a benefit the elderly person never receives. Elder theft occurs when a trusted person steals an older person’s assets, funds or income.

A phone or online scammer could convince the individual to pay for fraudulent services or investment schemes. A trusted acquaintance could gain access to accounts and funnel assets away for their own gain. Anyone can fall victim to a swindler's tactics; financial abuse crosses all social, educational and economic boundaries. However, seniors' regular income and accumulated assets put them at greater risk for financial exploitation. Social isolation, cognitive decline and grief (due to a recent loss of a spouse or other loved one) are also risk factors that can lead to poor financial decisions.

Know the Warning Signs

It's not always easy to tell if an individual is simply being financially generous or is being exploited. It may be an overall pattern of behavior versus a single act, but here are some general warning signs:

• Confusion about financial situation

• A change in or unwillingness to discuss finances or estate plan

• Unpaid bills or collection notices

• Unusual withdrawals or payments, particularly larger amounts

• Opening or closing accounts suddenly

• Expected checks are missing or never deposited

• New or renewed relationships that are influencing financial decisions

Top Elder Financial Abuse Frauds

Financial scams disproportionately impact elderly Americans, and fraud and technical support scams were the most widely reported in 2023. While fewer were reported, investment scams were the costliest.

^{Source: FBI Internet Crime Complaint Center. Different frauds in 2023, April 2024.}

Financial Regulators Have Stepped Up

The uptick in elderly financial abuse has not gone unnoticed by financial industry regulators. The Financial Industry Regulatory Authority (FINRA) issued guidelines for brokers, bankers and advisors to recognize and report potential financial abuse, specifically against seniors. Here's how FINRA's new rules are designed to protect investors:

Choice of a Trusted Contact

Financial firms are now required to ask investors for a designated, trusted contact person for their investment accounts. Banking and financial institutions must make reasonable efforts to obtain the contact information, which acts as an additional reference point when monitoring transactions and keeping accounts safe.

Holds on Withdrawals When Financial Exploitation Is Suspected

Firms can now put a temporary hold on withdrawals from investment accounts if they suspect fraud or exploitation. According to FINRA, this rule applies to "investors age 65 and older" or to "those with mental or physical impairments that the firm reasonably believes make it difficult for them to protect their own financial interests."

For questions or concerns about investment accounts, seniors can call the FINRA Securities Helpline for Seniors at 844-57-HELPS (1-844-574-3577). Other resources include:

• U.S. Department of Health/Human Services 

• Consumer Financial Protection Bureau 

• National Center on Elder Abuse 

• National Adult Protective Services Association (NAPSA) 

• Opt Out of Pre-Approved Credit Offerings 

• Register with Do Not Call Program: 1-888-382-1222

For information about and to report identity theft, contact one of the following:

• Federal Bureau of Investigation  (FBI)

• Department of Justice 

Protecting a Loved One from Elder Financial Abuse

Family members can also play a role in helping elderly loved ones avoid the costly and disarming effects of financial abuse. These tips from FINRA and other financial institutions center on prevention and being aware of what’s happening with your loved ones’ finances:

1. Talk About Money. While these conversations may be difficult, easing into them can show your parent or elderly loved one that you have their best interest in mind.

2. Offer Assistance. From paying bills to checking statements, offering to help your elderly parent or relative allows you to also look for suspicious activity.

3. Meet Their Friends. Knowing who’s new in your family member’s life can help you spot people who may be interested in helping with their money—and really shouldn’t.

4. Notify Financial Institutions. If you suspect elder abuse, report your suspicions to your banks or investment companies and enlist their help to stop future transactions from the person you suspect.

5. Vet Caregivers. Run background checks to ensure caregivers do not have a record. You can purchase from your state police or a private company.

6. Check Credit Report. Review their report from all major credit bureaus.

We're Committed to Protecting You

Your security is a critical part of the trust you place in us. We're committed to protecting your personal information no matter how you choose to do business with us. Check out our Security Center to learn more about safeguarding your accounts and identity.