Financial Abuse of Our Elders

The shocking fraud perpetrated on unsuspecting seniors by Earl Jones of Montreal through his Ponzi Scheme is perhaps one of the worst examples of how vulnerable our elders are in these important matters.

There is a widely held view that financial abuse of our elders is reaching epidemic proportions.

Surprisingly the abusers are more often than not family members, friends, neighbors, and care givers. The recession is pushing more people to steal from their senior relatives. According to a report, “Broken Trust: Elders, Family, and Finances”, released by Metlife Mature Market Institute, seniors in the US are losing more than $2.6 billion every year through financial abuse.  The average victims are elderly women living alone. The sick and frail are more apt to be taken advantage of, and this applies even more to dementia patients. Some care takers in nursing homes are not above stealing from sick and demented patients.

Is Elder Financial Abuse the Crime of the 21st Century? That is certainly the opinion of Fred Joseph, president of the North American Securities Administrators Association.  He was quoted in a Washington Post article that focused on the link between the growing recession in the U.S. and the increase in elder financial abuse.  Though there may be debate about elder financial abuse as the ‘crime of the century’, there is no doubt that it is a mounting crisis in the U.S.

Financial abuse of elders can happen in a number of ways, according to the National Committee for the Prevention of Elder Abuse:

• Forging an older person’s signature
• Getting a senior to sign a deed, will, or power of attorney
• Using property without permission.
• Promising lifelong care in exchange for money or property – and not following through on the promise.
• Using credit cards without authorization.
• Engaging in confidence crimes (“cons’’) in which victims are scammed by gaining their trust.

They suggest that these red-flag warnings will help you spot financial abuse:

• The senior is being encouraged to invest in unregistered securities or start-up companies
• The investment is high-risk or speculative, such as rare metals or currency trading
• The senior is asked to sign blank paperwork or to give discretionary authority over accounts to an adviser
• The senior complains that an investment adviser won’t supply account statements
• The senior makes out a check directly to the adviser or broker for the purchase of an investment

Here in Canada, earlier in the year, the Government launched a nation-wide advertising campaign called Elder Abuse – It’s Time To Face The Reality. The campaign launch on June 15, 2009 coincided with World Elder Abuse Awareness Day.  The Minister of State (Seniors), Marjory LeBreton confirmed that elder abuse cannot and will not be tolerated and that help is available.

There are a number of online resources on this subject

• Abuse of Older Adults – Department of Justice Canada Overview Paper
• FAQs on Financial Abuse of Seniors – Government of Alberta
• National Clearinghouse on Family Violence
• FAQs on Financial Abuse of Seniors – National Clearinghouse on Family Violence

Here is an extract from the last resource:

What is the financial abuse of seniors?

Financial abuse refers to the misuse of a senior’s money, property or other assets by a relative or a person in a position of trust. A relative may be a spouse, sibling, or child, and a person in a position of trust may be a neighbour, home care worker, or staff person in a care facility. Financial abuse by strangers is not included in this fact sheet.

Some examples are:

• Forcing or tricking a senior into selling his or her property
• Stealing money or personal possessions
• Forcing a senior’s signature on pension cheques or legal documents
• Misusing a Power of Attorney
• Pressuring a senior to provide services for no payment

Financial abuse is one type of elder abuse and it is sometimes referred to as material abuse. Financial abuse IS a crime. Often when seniors are financially exploited, they are subject to other forms of mistreatment, such as physical or psychological abuse or neglect.

How widespread is the problem?

As with other types of elder abuse, it is difficult to determine the extent to which seniors are being financially abused in Canada. This difficulty arises primarily from a failure to recognize or acknowledge that financial abuse is occurring.

Given the increasing incidence of such financial abuse of our elders, it is incumbent on us all to look out for our senior friends and family members to ensure that unwittingly they do not become victims of some smooth-talking fraudster.

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