AARP Eye Center
In October 2018, a Potsdam, New York, couple was indicted in New Hampshire on charges of theft. It wasn’t a stranger or casual acquaintance Kile A. Madsen and Debra A. Madsen were accused of ripping off. It was Kile’s father, who had died six months earlier at age 86.
Prosecutors allege the couple used the father’s bank account to make unauthorized purchases, payments and withdrawals amounting to more than $31,000. They were found guilty of theft in October 2022 and sentenced to each serve up to three years in state prison, and have been forbidden from caring for “any elderly, disabled, or impaired adult.”
3 Ways to Protect Against Elder Financial Abuse
Unfortunately, such cases are not unusual. In reports of elder financial exploitation where victims knew the suspected perpetrator, more than two-thirds involve a family member, a 2019 review by the federal Consumer Financial Protection Bureau (CFPB) found.
Assessing the financial threat
Financial exploitation collectively costs older adults an estimated $4.8 billion a year, according to a January 2022 analysis of state and federal case data by cybersecurity research company Comparitech. And that’s just from known incidents; experts say the true toll is likely far higher, as most cases go unreported.
Compared to fraud by anonymous scammers, older adults typically suffer greater financial losses when they know the perpetrator, the CFPB found, with an average cost of $42,700 in cases involving family members.
Certain risk factors can make an older adult particularly vulnerable, says Peter Lichtenberg, director of the Institute of Gerontology at Wayne State University in Detroit and an expert on elder financial exploitation.
This category includes older people who feel less confident about their money management skills due to memory loss or failing health, Lichtenberg says. Those who long for someone to help them make financial decisions could unsuspectingly welcome the attention of a person who exploits them.
“When people feel they have no one to talk to about their finances, they'll often choose the wrong person to talk to,” he says.
Isolation also increases risk, says Thomas West, a financial adviser in northern Virginia and creator of the Lifecare Affordability Plan, a program that helps families plan for long-term care. For example, a senior who does not have immediate family living nearby may need to depend on a distant relative with whom they don’t have a close relationship.
Identifying the warning signs
Pay close attention to big, sudden changes in an older adult’s personal or financial life. “The priorities a senior has may change,” West says. “New relationships may come into their life, or an older relationship may take on new significance.”
Be wary if your loved one is helping this new person financially, especially if they’re being cagey about it, Lichtenberg says. They may be less forthcoming about the situation because they are being influenced by someone who is exploiting them under cover of forging a close bond.
