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Protecting Your Loved Ones from Elder Financial Fraud

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Last Updated: 8/25/2023
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It has taken older adults a lifetime of working hard and building savings to be able to retire. And it is precisely because of that nest egg that seniors are vulnerable to financial exploitation, the fastest growing form of elder abuse. The cases vary, from swindlers posing as trusted financial advisers to adult children taking advantage of parents' vulnerability and assets.

Elder financial fraud and abuse is estimated to cost victims about $3 billion a year, according to one study, though some say it's actually much higher. Shockingly, around 90 percent of perpetrators are people the victims know and trust — family members, neighbors, friends or caregivers, according to the National Center on Elder Abuse (NCEA).

This guide will help older adults, and their loved ones, understand the warning signs and schemes that pose a threat - and the moves to make to protect their bottom line.

At A Glance

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  • Each year, 1 in 20 older adults is financially exploited by a family member.

  • The annual financial loss by victims is estimated to be at least $3 billion

  • The average loss by individual victims is about $41,800

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  • Just 1 in 44 financial elder abuse cases is ever reported.

  • Women are nearly twice as likely as men to be victims.

  • Most victims are between ages 80 and 89 and live alone.

Learning to Detect Suspicious Activity

Family members who are managing relatives' finances or helping them pay bills might come across suspicious activity, such as unusually large bank account withdrawals or credit card statements that document expensive purchases. Perhaps quarterly investment account statements show uncharacteristic activity involving the buying and selling of stocks, racking up fees and broker commissions.

Whether they involve money management misdeeds or outright theft, one thing is certain: There is no shortage of financial schemes perpetrated against older adults. If you're helping mom and dad manage their money and recognize any of these signs of suspected abuse, here's how to proceed:

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You've noticed unusual or frequent bank account activity, including large withdrawals, transfers between accounts, unusual purchases or unusual signatures on checks.


Get the older adult's authorization to monitor his or her bank accounts, checkbook and spending activities. Consider going with mom to her bank and opening a joint checking account, or have her sign a power of attorney to grant you access to her account.

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You're surprised by changes to bank accounts, power of attorney, wills, trusts, insurance or beneficiaries.


Talk with mom and dad to determine whether those changes were authorized and why. Speak with their trusted attorney if necessary.

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You suspect that a caregiver or family member is using mom's credit or debit card for unauthorized or unnecessary purchases.


Suggest that mom give cash, rather than credit cards, to caregivers for purchases.

Vetting Caregivers

Most caregivers, whether they're relatives or hired helpers, are compassionate people dedicated to the safety and well-being of their charges. But some use their position to take financial advantage of older adults. Sadly, seniors are less likely to report wrongdoing by relatives or caregivers because they are dependent on them for care.

That's why it's important for other family members to remain involved in the senior's life and keep tabs on how he or she is doing. When going outside the family to hire a trusted caregiver, consider using a well-known agency that will vet candidates' credentials and training. If you're hiring a caregiver on your own, find candidates by asking friends, neighbors, coworkers or other caregivers you know for referrals.

A Checklist for Interviewing Candidates

  • Ask each applicant to bring a resume and contact information for at least two references. Make sure a family member takes part in the interview.

  • Describe the duties of the job as well as the health concerns of your loved one. Ask questions to help you decide whether the candidate is a good fit for the job and the older adult.

  • Ask to see proof of identity such as a social security card, driver's license or other photo ID.

  • Ask whether the person has ever been in trouble with the law. Consider hiring a reputable agency or service to run a background check.

  • Discuss the candidate's breadth and length of experience, training and certifications and why he or she left the last position.

  • Discuss salary, work schedule and paid time off. Encourage questions about the job and your expectations.

Guarding Against Dubious Financial Schemes

Seeking the services of a trusted financial adviser may be wise; however, requirements for credentials vary. Make sure the financial or investment advisers you do business with operate under the fiduciary standard, which requires them to put their clients' best interests first. If you're not sure whether your adviser is a fiduciary, ask. Make certain he or she is licensed to sell products in your state. Always check that person's background for possible disciplinary action.

Financial exploitation of older adults at the hands of financial professionals is not all that uncommon. According to the Investor Protection Trust, some 7 million people over age 65 have been the victims of financial swindles. Watch out for these situations in order to protect your bottom line:

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A financial adviser you don't know is seeking to do business with you.


It's best to work with people you know or who were referred by trusted friends or relatives. First, determine whether the adviser is a fiduciary or a broker-dealer who operates under a suitability standard, which requires the broker-dealer to offer investment products that are suitable but not necessarily the best for your financial situation. Check for any history of disciplinary action with licensing organizations' websites, such as Brokercheck, Certified Financial Planners Board or American Institute of CPAs.

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You're invited to a free lunch or dinner by retirement planners offering free consultations.


Don't go. These free meals typically are nothing more than pressured sales pitches, not opportunities for financial investment advice tailored to each attendee. If you do go, resist any temptation or pressure to share your personal information.

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A friend recommends a financial adviser who attends your place of worship.


Don't assume this person is trustworthy just because he is a member of your community. Check his background and disciplinary history.

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An adviser wants to sell you an annuity or other financial product but insists it is too complex to explain in detail.


Don't buy anything you don't understand. Get a second opinion.

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If it sounds too good to be true, it probably is.

Know the Scams that Prey on Older Adults

Con artists look for victims they believe are vulnerable. Understanding how and what types of scams impact seniors can help you avoid common rip-offs. The more you know, the better you can protect yourself or a loved one. The following are some of the most common schemes perpetrated against seniors, and advice for taking action so you don't become a victim.

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A victim receives a call from a young adult pretending to be a grandchild who is in trouble, perhaps in jail in another city or country while on spring break. The imposter tells grandma not to tell his parents because he doesn't want them to know. He tells grandma to send money immediately.


First, call the child's parents to determine whether the situation is real. Never give financial or personal information over the telephone.

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Women and men over age 60 are the number one targets of sweetheart scams, which can happen in person or online. Con artists convince the victims that they are in love and proceed to extract money from them over a period of time. The scam usually ends when the victim's retirement savings account has been drained.


Use common sense. Know the risks of online dating. Be honest with yourself about whether the relationship can actually be real. Keep friends and family apprised of your new social interests. Never transfer money to someone you've never met. If you suspect fraud, consult a law enforcement official.

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Callers trick victims into thinking they've won money or prizes, but in order to get it, they need to send money to cover taxes, insurance or bank fees first.


Never send money to people or organizations you don't know.

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Callers or mail solicitations ask for donations to fund humanitarian causes. This scam is particularly common after disasters and tragedies, pulling on victims' heartstrings to fund criminals' own greed.


Check with your local or state consumer protection agency or the Better Business Bureau Wise Giving Alliance.

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Unscrupulous contractors or traveling con men convince victims they are in dire need of various home repairs. Then they overcharge them or take money before the projects are completed and run. Older homeowners are at risk because they often live in older homes and often can't do repairs themselves.


Choose a contractor through references. Don't do business with someone just because they've solicited you. Research vendors, ask for references and don't make a full payment up front.

Helping Loved Ones When Cognitive Changes Affect Financial Decisions

As people age, cognitive changes can affect their financial literacy along with their ability to make wise money decisions. This leaves them open to preventable mistakes at best, and at worst, to financial devastation at the hands of predators. By the time a swindle is discovered, it may be too late to recover the financial losses.

That's why it's important to take precautionary measures. If you're an adult with elderly parents or relatives who may be showing signs of confusion, consider initiating a frank conversation to gain their trust and create a plan of action. You may want to undertake this effort with the support of another trusted family member or enlist the help of a lawyer or financial adviser to work under your supervision.

Consider these tips:

  • First, be present in your relatives' lives and encourage them to stay socially connected with others. That makes it more difficult for would-be predators to act.

  • Locate important documents such as wills, financial account information (banks, investments, insurance and other accounts), debt statements and tax returns, along with names and contact information for their advisers, such as lawyers and accountants.

  • Help your relatives gradually. Start by setting up a bill payment schedule and automatic bill paying. Eventually, consider becoming a cosigner for their financial accounts.

  • Help them get copies of their credit reports at Annualcreditreport.com to ensure they are not victims of identity theft.

  • You may wish to seek power of attorney or guardianship before any older relative becomes incapacitated.

  • To help older relatives avoid telephone scams, put their home and cell phone numbers on the national Do Not Call Registry at www.donotcall.gov or by calling 888-382-1222.

It Happened to Me: Lessons from the Front Lines

Sally Balch Hurme has spent her entire professional career as an elder law attorney and consumer fraud expert, helping to educate and protect the public. And yet her husband fell victim to an impostor scheme. He received an urgent call from an "attorney" requesting that he send $3,000 to get his daughter out of a Los Angeles County jail.

For Hurme's husband, it was simple. "He really loves our daughter and wanted to help her," Hurme said. "He got caught up in the moment. The caller was adept at pushing buttons and convinced him of the emergency, the need to act promptly, and the importance of not telling anybody."

While their daughter was safe in Virginia, teaching biology like any other workday, Hurme's husband was instructed to rush to the bank to withdraw funds, then rush to the store to get a prepaid card to wire cash, and then rush home to wait for a follow-up call. He did as he was told, reading to the caller the numbers off the prepaid card. And just like that, $3,000 was gone forever. Although Hurme and her husband reported the theft, the cash card and the scammer's disposable phones could not be traced.

Hurme's advice: Don't answer calls from numbers you don't recognize. If you do and the caller describes an emergency involving a loved one, independently verify this claim.

Expert Advice on Preventing Elder Financial Fraud

  1. What are the types of financial exploitation that prey on older adults?
  2. How can older adults protect themselves against these scams?
  3. How do nefarious financial professionals rope their victims in?
  4. How do you avoid falling prey to these bogus investment offers?
  5. How do unscrupulous relatives tend to take advantage of their elders financially?
  6. If elder fraud and exploitation are expected to grow as the population ages, what can individuals and their loved ones do to minimize their risk?
  7. The federal effort to prosecute these cases has been disjointed. What changes can we expect in the near future?
  8. Bank officials and others who come into contact with older adults' finances are now receiving training on how to spot abuse. Will this training become a standard for all bank employees and other financial service professionals?
Miriam Whiteley, CFP®, RLP®, CeFT®
Miriam Whiteley, CFP®, RLP®, CeFT®

Owner of LifeCraft Financial Planning

Axton Betz-Hamilton
Axton Betz-Hamilton

Associate Professor of Consumer Affairs at South Dakota State University

Naomi Karp
Naomi Karp

Consumer Financial Protection Bureau's Office

Richard Brody, PhD
Richard Brody, PhD

Douglas Minge Brown Professor and Chair of Accounting at the Anderson School of Management at the University of New Mexico

Sally Balch Hurme
Sally Balch Hurme

Resources for More Information or to Report Suspected Crimes

There are many organizations and structures in place to serve seniors, whether you're looking for day-to-day resources or seeking specific guidance or assistance in response to fraud. These resources can help you protect your loved ones.

About Michele DiGirolamo

Michele DiGirolamo headshot

Michele DiGirolamo has worked as a journalist and non-profit communications administrator and now writes about business, health, food and lifestyle topics from Haddonfield, NJ.