More than 369,000 incidents of financial abuse targeting older adults are reported to authorities in the U.S. each year, causing an estimated $4.8 billion in losses, according to a January 2022 analysis of federal and state data by Comparitech, a cybersecurity research company.
And those numbers probably understate the problem by a considerable amount. Experts agree that elder financial exploitation, broadly defined as the theft or misuse of an older person’s money by someone they know, is vastly under-reported.
But experts also say that in most cases, the abuse can be prevented before it starts. Take these steps to help protect yourself or a vulnerable loved one from financial exploitation.
1. Designate someone you trust as your financial power of attorney.
While you’re still able to make financial decisions, choose the right person to do so if you become incapacitated. Or persons: If you invest two people with this responsibility, they can share the workload and hold one another accountable.
"We don't like to talk about finances. It's private. But we need to change that dynamic," says Julie Schoen, deputy director of the National Center on Elder Abuse (NCEA) at the University of Southern California’s Keck School of Medicine.
Skip the standard power-of-attorney form and customize the role to meet your needs, preferably with the help of a lawyer. (The federal government’s Eldercare Locator can help you find free or low-cost legal assistance.) Maybe you want your agents to handle all your financial matters, or maybe you just want them to, say, file taxes or manage property. Spell it out.
2. Appoint a trusted contact for accounts and investments.
A trusted contact is someone you authorize a bank or financial institution to get in touch with about questionable activity on your account, or if they are unable to reach you. The company can disclose some account information to your trusted contact, but he or she is not able to make transactions.