Financial Abuse – How to Spot It and Stop It

How do you spot and stop financial abuse? The sad reality is that someone you care about might be abused financially right under your nose. According to an Investor Protection Trust survey done in June 2010, 7.3 million older Americans – about one in five people over 65 years of age – have been swindled.

They get taken for over $2.6 billion a years. That’s a lot of baklava, and it completely stinks. And if you think more about it, that number is bewildering. Basically, it means when you go to Thanksgiving Dinner this year, the odds are that somebody at your table has been financially abused.

If you suspect someone is being abused financially, the good news is there are a number of steps you can take to remedy the situation. But it’s wise to pause before you take drastic action. That’s because you may not be sure that what you think is going on really is going on. You don’t want to cause a big stir over nothing. And you certainly don’t want to get sued.

On the other hand, you don’t want to sit there and allow a defenseless person to be hurt. Uncle Harry might be telling you about the great retirement investment he just made, but all you see is his credit card debt going higher and higher. How do you deal with financial abuse?

We’ll get there. But first, you have to understand how to spot financial abuse. I spoke to a geriatric physician about this, and she told me that over time you develop a “smell” for it. If a doctor can pick up on this, it shouldn’t be that tough for you to notice if you keep in contact with the person on a regular basis.

The most telling signs are when the person complains. Don’t assume that just because the person is older and sometimes confused that what she says is meaningless. That would be a mistake. If someone complains about financial abuse, investment or debt relief scams or being swindled some other way, take it seriously.

What if they don’t say anything?

Well, you might see a change in appearance. You might notice a failure to keep themselves up or an inability to afford medications, food or clothes. Ask questions. Find out who’s paying the bills and taking care of the banking. Ask if the person has been contacted by strangers about investments or real estate. Look at their checkbook and see if there are any funny transactions. It might not be a bad idea to check their credit score once in a while too.

If you suspect funny business, take it to the next level. You don’t have to sit there quietly until your loved one ends up declaring bankruptcy. If appropriate, ask the person who has taken over the finances for your loved one to show you the books. If he refuses and/or you still have concerns, there are a few steps you can take.

First, you can hire an attorney who specializes in elder abuse. You can ask the attorney to have your loved one’s competency evaluated. The attorney – or you – can go directly to Adult Protective Services – or your state’s equivalent. Anyone can make a report to this department – related or not. They will investigate the issue and possibly refer the case to pubic guardians. If that happens, the public guardian may seek legal protection for your loved one. If she is found to be incompetent by the court, a conservator may be appointed.

If you can’t hire an attorney and/or you don’t want to call Adult Protective Services, you can call the police or your loved one’s doctors. The police will give you specific advice. And in California at least, medical personnel are required by law to report to Adult Protective Services if they feel it’s justified. Since they are required to report, they usually don’t have to worry about being sued. As a result, you might want to ask your loved one’s doctor if she thinks there is any abuse going on and hope the doctor makes the report.

Have you ever suspected someone of being abused financially? What did you do? What ultimately happened?