Preventing Financial Abuse

Preventing Financial Abuse

April 08, 2022

The statistics on elder abuse are staggering. According to one estimate, 5 million elderly Americans are abused every year—often by someone they look to for care and protection. The National Council on Aging estimates that 1 in 10 Americans over the age of 60 have been the victim of some form of elder abuse and as the population ages, the problem of elder abuse is expected to grow.

One of the most common forms of elder abuse is financial abuse. Financial abuse refers to a wide variety of actions, including fraud, theft, the misuse of an elderly person’s assets or credit, or using undue influence to gain control of an older person’s property. Anybody who is involved with the elderly has a responsibility to help prevent abuse in any form. According to the National Center on Elder Abuse, the following signs could indicate someone is being victimized by financial predators.

  • Sudden changes in account balances or banking practices.

  • The addition of signatories to an older person’s bank signature card.

  • Abrupt changes to a will or other financial documents.

  • The unexplained disappearance of funds or valuable possessions.

  • Sudden transfer of assets.

  • Substandard care provision, unpaid bills, or eviction proceedings.

  • The provision of unnecessary services.

  • Depression or anxiety.

  • Evidence of poor financial decision making.

  • Malnutrition.

In the past, financial abuse of the elderly was aggravated by privacy laws that made it difficult for financial institutions to report potential abuse. Congress addressed this problem in 2018 when it passed the Senior Safe Act. Before the Senior Safe Act, financial institutions, like national banks or savings and loans, faced severe penalties if they were sued for breaching privacy regulations—even if their intent was to prevent financial abuse. Now these institutions can receive immunity if they train their employees on how to identify and report the suspected exploitation of an elderly person.

As good as these legal protections are, seniors, and those who love them, need to take specific actions to help prevent financial abuse. Here are some suggestions:

  • When possible, get the family involved. Sometimes, family dynamics may make this difficult, but communication among family members can dispel the shadows that sometimes foster fraud and abuse.

  • Establish a trusted and trustworthy person as an “interested party” on key accounts. This person will receive account statements and be able to communicate with the financial institutions should questions arise.

  • Shred receipts, old bank statements and unused credit card offers before throwing them away. Use a cross-cut shredder to get the best protection.

  • Lock up your checkbook, account statements and other sensitive information when caregivers and others will be in your home.

  • Order copies of your credit report at least annually to ensure accuracy. Remember, the Fair Credit Reporting Act requires each national credit reporting company to provide you with a free copy of your credit report, at your request, every year.

  • Never give personal financial information, including your social security number or account number, to anyone over the telephone unless you initiated the call and the other party is trusted.

  • Never rush into a financial decision. Ask for details in writing and get a second opinion. Consult with a financial advisor or attorney before signing any document you don’t understand.

  • You have the right to not be threatened or intimidated. If you think someone close to you is trying to take control of your finances, call the Monterey County Adult Protective Services at 800-510-2020.

  • Trust your instincts. If something doesn’t feel right, it may not be right. If it sounds too good to be true, it probably is.

Family members and friends can help protect loved-ones from financial abuse. If you see unusual bank activity, including large, frequent or unexplained withdrawals, it may indicate abuse. Likewise, suddenly bouncing checks or unpaid bills may indicate abuse or at least the need for more support in managing the financial details of life.

Steven C. Merrell MBA, CFP®, AIF® is a Partner at Monterey Private Wealth, Inc., a Wealth Management Firm in Monterey. He welcomes questions that you may have concerning investments, taxes, retirement, or estate planning. Send your questions to: Steve Merrell, 2340 Garden Road Suite 202, Monterey, CA 93940 or email them to