As the elderly population continues to rise, family members are frequently stepping in to help manage relatives’ finances, especially when the elderly person faces cognitive or health issues.

Although this assistance is often necessary, it carries the risk of the family member improperly influencing their elderly relative’s financial choices, which could lead to unethical financial abuse.

Imagine that you head to a bank machine to take out some cash for a purchase but the machine tells you there are “insufficient funds”. At first you would probably be confused – perhaps you had put in the wrong pin number or selected the wrong account.

You try again, but get the same answer, “insufficient funds”. Now you’re annoyed, so you head into the bank to wait in line, only for the teller tell you only have a few hundred dollars in the account. How could that be? You’ve always been good with your money.

It’s only in the last few years that you have been slightly forgetful, so you did the right thing and asked one of your children to join the account to make sure the bills were being paid on time.

As the teller goes through the transactions on your account, you sadly discover that the person has not just been helping you – they have also been helping themselves.

This situation is a dangerous reality that many elderly people currently face: the people they trust the most have taken advantage of them in the worst possible way, and time is no longer on their side to recover from the financial impact.

There are some key factors that can increase the risk of the financial exploitation of a family member. These include:

Loneliness: lonely, older adults are more likely to be receptive to the overtures of a financial predator. They may also be more susceptible to manipulation by a family member or opportunist.

Isolation: when older adults are isolated, there may be fewer family or friends around to notice a suspicious situation and intervene. Isolated older adults are also often lonely.

Poor physical health: this is associated with being dependent on others, and such dependency can create the opportunity for exploitation.

Age-associated brain changes make people more trusting as they get older: research has shown that as people age, they tend to become more optimistic and more trusting. This can help older adults become happier as they get older, but may well partly explain why many of them can be financially exploited by scams.

Cognitive impairment: again, this is not necessary for financial exploitation to happen, but it can certainly facilitate it. Also, if an older person has previously completed a durable power of attorney document, then the agent of an impaired person can easily abuse the POA and mismanage funds for their own benefit (Kernisan, 2024).

Let’s face it, theft is theft – and taking anything that does not belong to you is against the law – but that does not stop people taking advantage when the pot is so close, and the person feels entitled to it. The sad truth is that the financial exploitation of an elderly family member is becoming a rather common occurrence, and one that some families in Bermuda are experiencing first-hand.

In a 2021 article, Ky Jurgensen lists the common warning signs of financial exploitation. These include:

• Names added to bank accounts and investments

• Names added to house deeds

• Changes in beneficiary designations

• Debit card usage at retail stores and restaurants when the elderly person is primarily homebound

• Unauthorised withdrawal of funds using ATM cards or sudden transfers of cash

• Missing jewellery or other (especially portable) valuables

• Financial needs being unmet despite the elderly person having the financial resources to cover them

• Cheques being signed and cashed at a time when the elderly person was physically or mentally unable to write them

• Expensive “gifts” to the caregiver

• Unannounced changes to an established estate plan.

The Law Society in the UK has noted that although anyone can financially exploit an elderly person, in most instances it is a family member such as a sibling, child, grandchild, niece or nephew (Roberts, 2024).

So, what do you do if you notice it is happening in your family?

1, Chat with your elderly family member to understand their relationship with the person you suspect is exploiting them.

2, Let the elderly family member know you are here to help them, that “two sets of eyes are better than one”, and that you would like to review everything as well ensure that nothing was overlooked. Approaching it in this manner will allow you to get consent from the elderly family member to start your research. More importantly, it is the approach of a caring family member with honest intentions.

3, Gather documents to verify information and do your research to confirm whether what you suspect is correct. If you are correct, chances are the person that has been exploiting the elderly person has created many barriers for you to access information and has probably been quite abrasive towards you (often a telltale sign).

4, The next step is to chat with a trusted family member to raise your concerns, and if agreed you both sit down with the elderly person and let them know your concerns, provide them with evidence and let them know you are there to help them. If they agree, then the best course of action is to engage a law firm. The fact is that you’re going to need the legal support and direction to try and recuperate the missing finances.

The sad truth is that the financial exploitation of the elderly has become a real issue over the past few decades, and although there are many honest family members with a power of attorney who are doing the right thing and helping the elderly navigate the last chapter of their life, there are also opportunists whom we need to be aware of and protect our family against.

References

Jurgensen, K. (2021) Warning Signs of Financial Exploitation of Older Adults. Available from: https://www.hchlawyers.com/blog/2021/march/suspect-a-sibling-is-taking-financial-advantage-/ [Accessed 1 September 2024].

Kernisan, L. (2024) Financial Exploitation in Ageing: What to Know & What to Do. Available from: https://betterhealthwhileaging.net/financial-abuse-what-to-know/ [Accessed 1 September 2024].

Roberts, R. (2024) Close to home: spotting elder abuse. Available from: https://www.lawsociety.org.uk/topics/blogs/close-to-home-spotting-elder-abuse [Accessed 1 September 2024].

• Carla Seely has 24 years of experience in the financial services, wealth management and insurance industries. Over the course of her career, she has obtained several investment licenses through the Canadian Securities Institute. She holds ACSI certification through the Chartered Institute for Securities and Investments, UK; QAFP through FP Canada; and AINS through the Institutes. She also has a master’s degree in business and management.