The Makin Tracks team has found that financial abuse is a BIG problem!
What is financial abuse and how big is this problem?
Financial abuse is a component of the overarching issue of elder abuse which is a sensitive and largely under reported issue affecting many elderly people’s mental and psychological well-being. Elder abuse is defined by the World Health Organisation (WHO), as ‘a single or repeated act, or lack of appropriate action, occurring within any relationship where there is an expectation of trust which causes harm or distress to an older person’. Other forms of elder abuse include physical, sexual, psychological, domestic violence, neglect and self-neglect. It is rare that one form of elder abuse occurs independently (Carp, 2000). For example, an elderly person may be isolated from other people (psychological abuse) to make it easier for the perpetrator to financially exploit them (financial abuse).
While financial abuse can be difficult to accurately define due to different cultural attitudes and values around sharing money, WHO defines it as ‘the illegal or improper exploitation or use of funds or resources of the other person’. Financial abuse can include:
- Taking money or property
- Forging an older person’s signature
- Getting an older person to sign a deed, will or power of attorney through deception, coercion or undue influence
- Using an older person’s property or possessions without permission
- Promising lifelong care in exchange for money or property and not following through on the promise
- A person authorised to manage an older person’s money not acting in the older person’s best interests and using the money for themselves
Financial abuse of older people is a significant issue not only for the elderly and their families but also for the community. With the rapidly increasing ageing population, the government is now, more than ever, encouraging people to save for retirement and ensure their financial independence. Loss of financial security through elder financial abuse can cause stress, increase the likelihood of many health problems and increases older people’s reliance on the government as a form of survival. The Elder Abuse Prevention Unit’s statistics show that 32% of callers to its helpline identified financial abuse as the primary reason for their call. In Queensland alone, over $8 million was lost due to financial abuse between November 2002 and June 2005 and based on an 8.6% dollar amount disclosure rate by callers, this figure is expected to be significantly higher. (EAPU Annual Report, 2005).
There are many risk factors for financial abuse, therefore it is important to consider family relationships and dynamics, social and cultural connections, physical and mental health and financial status. Adult children, grandchildren and other relatives are the most common perpetrators of financial abuse and often use other forms of abuse such as psychological abuse or neglect to gain access to money, assets or property. Financial abuse can cause shame, guilt or embarrassment for elderly people and as such financial abuse can often go unreported. There are signals that you can watch out for that indicate elder financial abuse:
- Unpaid bills or eviction notices
- Withdrawals or transfers from an elderly person’s bank account that cannot be explained
- Accounts suddenly being moved to other financial institutions
- Inability of an elderly person to access their bank accounts or statements
- Unfamiliar or new signatures on cheques and other documents
- New ‘best friends’
- Significant changes to a will
- Belongings or property are missing
- Absence of documentation about financial arrangements
- Implausible explanations given about the elderly person’s finances by the elderly person or their caregiver
- A caregiver expresses excessive interest in the amount of money being spent on the elderly person
- The elderly person is unaware of or does not understand financial arrangements that have been made for him or her
- Legal documents, such as powers of attorney are not understood when signed by the elderly person
- An elderly person has a family member who lives with them but does not contribute financially
Preventing financial abuse
Ageing is a time of transition that some people like to avoid thinking about. There are many decisions that people face in old age and if you start think about financial, medical and family issues earlier in life won’t have to make as many hard decisions later on. Planning ahead may make your later years happier and healthier for both you and your family. Arranging things like appointing an attorney under an enduring power of attorney to manage your financial and legal affairs, as well as an enduring guardian to make lifestyle, care and accommodation decisions on your behalf, updating your Will and making an advance care directive to ensure your end of life wishes are carried out can reduce stress and unnecessary work later in life.
Some preventative strategies that may assist in reducing the likelihood of financial abuse include:
- Avoid making important decisions following a significant event such as the death of a spouse
- Make plans for the future while you are well, healthy and independent
- Do not give up control of your assets while you can manage them yourself
- Seek a social network beyond your immediate family and remain active in your community
- Know your rights and do not hesitate to assert them
- Do not sign a legal document unless you fully understand it
- Do not allow adult offspring to live with you without first seeking advice or having a written legal arrangement in place
Carp, F. M. (2000). Elder Abuse in the Family – an Interdisciplinary Model for Research. New York: Springer Publishing Company.
Deem, D. L. (2000). Notes from the field: Observations in working with the forgotten victims of personal financial crimes. Journal of Elder Abuse and Neglect, 12(2), 33–48.
EAPU. (2005). EAPU Annual Report. Brisbane, Queensland: EAPU.
Nerenberg, L. (2000). Forgotten victims of financial crime and abuse: Facing the challenge. Journal of Elder Abuse and Neglect,12(2), 49–72.
Podnieks, E. (1992). National survey on abuse of the elderly in Canada. Journal of Elder Abuse and Neglect, 4(1/2), 5–58.
World Health Organisation, (2008). A Global Response to Elder Abuse and Neglect: Building Primary Health Care Capacity to Deal with the Problem Worldwide: Main Report. World Health Organisation: Geneva.