How to Prevent Elder Financial Exploitation

First Republic Bank
December 14, 2022

  • Elder financial exploitation, also called elder financial abuse, is the theft or misuse of money or assets belonging to the elderly, often perpetrated by someone in a position of trust.
  • Elder financial abuse often involves family members, caretakers or other parties in trusted positions, though it may also be perpetrated by scammers the victim doesn’t know.
  • Financial abuse warning signs may include unusually large money transfers, abnormal financial account activity and/or unexpected changes to financial documentation. 

Financial exploitation is a persistent threat to the well-being of the elderly. Elder financial exploitation, sometimes called elder financial abuse, impacts millions of elderly victims per year and costs billions of dollars in losses. Exploitation methods continue to evolve alongside technological changes. It is critical to watch for key red flags that may indicate financial abuse.

What is elder financial abuse?

The United States Consumer Financial Protection Bureau (CFPB) defines financial abuse as occurring “when someone takes or misuses another person’s money or property for the benefit of someone other than that person.”

Elder financial abuse applies specifically to elderly victims. Perpetrators exploit the vulnerabilities of the elderly, such as their frequent reliance on others to help manage their financial affairs, for financial gain. This abuse can take many forms and often involves someone the victim believes they can trust.

Types of elder financial exploitation

Elder financial exploitation typically generally takes two forms: elder theft and elder scams.

Elder theft

Elder theft generally involves the theft of money or other assets by someone an elderly individual trusts, such as a family member or a caregiver. These thieves abuse their positions of trust and use tactics like coercion, deception and intimidation to achieve their desired results.

Elder scams

Elder scams are generally executed by strangers, often from outside the United States. These fraudsters may call the elderly victim or contact them online, either through email or social media, and seek payment for a variety of reasons. Examples include: 

  • Romance scams: A scammer pretends to be a prospective romantic partner and asks the victim for money.
  • Tech support scams: A scammer poses as a tech support specialist and requests login credentials to financial accounts.
  • Grandparent scams: A scammer poses as the victim’s grandchild and suggests they urgently need money to deal with an emergency.
  • Lottery/sweepstakes scams: A scammer deceptively claims the victim has won a prize and must pay money to claim it. 

Signs of elder financial exploitation

There are specific warning signs that may indicate the existence of elder financial exploitation. Potential victims and family members alike should watch for the following red flags: 

  • Unexpected changes to financial accounts or documentation: Bad actors who aim to steal from the elderly may change financial account information, including phone numbers, email addresses and passwords, to grant themselves easier access to the victim’s accounts. Unexplained changes may also appear in crucial financial documents (wills, trust documents, etc.).
  • Unusual account activity: Abnormal activity, such as unusually large payments to recipients who don’t ordinarily receive similar payments, may indicate elder financial abuse. This activity is often initiated by someone accompanying or associated with the elderly victim, rather than the victim.
  • Loss or disappearance of money or property: Money or property that seems to disappear without explanation may have been stolen or received via coercion.
  • Visible signs of stress in potential victims: Unusual anxiety and distress may suggest the presence of elder financial exploitation. The victim may also report the exploitation outright. 

Refer to the U.S. Department of Justice or AARP for more information about warning signs.

Tips for preventing elder financial exploitation

It can be distressing to realize how vulnerable elderly relatives may be, but education and persistent caution make it easier to identify and avoid elder financial exploitation.

In general, involve only those who can be trusted the most with financial matters. Beyond that, consider the following tips to prevent elder exploitation.

1. Remain vigilant.

Be vigilant when tracking and dealing with money, especially in large sums. If you or someone you know has fallen victim to elder financial exploitation, speak with a trusted party (such as a legal or financial account representative) or law enforcement, if necessary.

2. Consult with financial professionals to ensure accounts are set up properly.

Financial professionals, such as bankers and financial advisors, can help ensure that financial accounts are wholly in the control of those in trusted positions. This will help minimize the odds of a bad actor gaining access to money and/or other assets.

First Republic clients can contact their Preferred Banker or Relationship Manager to help ensure that accounts are set up properly.

3. Ask for help.

If you or an elder you know is being pressured by a caretaker, family member or another party, and you or they aren’t certain about following their advice or complying with their requests, seek help. It is advisable to raise the issue with an established, trustworthy friend or family member. Furthermore, if you believe elder financial exploitation is taking place, consider reporting the incident to your local National Adult Protection Services Association branch.

4. Verify payment recipients as trusted parties.

Always ensure the people being paid are verifiable, trusted parties before sending any money, especially large sums. Verification tactics may include speaking with the potential recipient, such as a friend or family member, in person or calling a business’s official phone number before initiating any transaction, depending on who you’re preparing to pay.

Speak with First Republic for personalized service.

Financial professionals, including bankers and wealth advisors, can help you or elder relatives ensure that accounts are set up with appropriate controls. For more information on protecting yourself and others from financial threats, visit the First Republic Bank Security and Fraud Prevention Center.

This information is governed by our Terms and Conditions of Use.