10 common forms of elder financial abuse

Elder financial abuse can take many forms and can include repeated or one-off actions, threats or even a lack of action.

• Financial abuse is often not technically illegal.

• Often elder financial abuse involves someone unethically exploiting power of attorney or other legal mechanisms that give them control over an older person's assets.

• Financial abuse often causes psychological, not physical harm.

• Often elder financial abuse doesn't involve obvious physical threats or violence (although it sometimes does). Instead, the abuser inflicts profound emotional harm and psychological distress on the victim.

Here are 10 of the most common types of financial abuse.

1. Abusing power of attorney

"Power of attorney" gives a trusted person (the 'attorney') control over someone's assets and allows them to make financial decisions on their behalf. Abuse can occur if the attorney uses this power to take a person's assets for themselves or for others.

See the Compass section on Powers of Attorney for more information.

2. Pressure, threats and intimidation

This occurs when someone attempts to force an older person to sign over ownership of assets, or make them a beneficiary of their will. The pressure may be physical, emotional or both.

3. Fraud, scams and identity theft

This occurs when a third party deliberately sets out to falsely gain a person's trust in order to defraud them and steal their money. Fraud, scams and identity theft (using an individual’s personal information without consent, often to obtain a benefit) can take many forms, and are often targeted at older, more vulnerable people. Learn more at ScamWatch.

4. Abusing family agreements

Often families enter into informal agreements that are designed to help everyone, but have no legal backing (e.g. older parents sell their home and split the profit with adult children). These agreements can unintentionally create various risks of abuse.

See Compass Family Agreements section for more information.

5. Improper use of funds

This occurs when someone who lawfully has access to an older person's money uses it for unagreed purposes. For example, a carer could purchase things for themselves when buying groceries for the person in their care.

6. Theft

While theft is a risk for all people, older people are particularly at risk, especially if they have care needs. Thieves can exploit an older person's specific physical or mental vulnerabilities.

7. Inheritance impatience

This occurs when adults feel entitled to an ageing relative's assets. This could cause them to try and take their assets from them. Examples include stealing money from parents' bank accounts, or transferring assets to another person.

8. Guarantors gone wrong

Often older parents will help their adult children purchase a home or start a business by being a guarantor to a loan. In some cases, this can create situations where the older parents might lose their home, despite there being no bad intent.

9. Failure to provide promised care

This occurs when an (often well-intentioned) arrangement for family members to provide care to older relatives in exchange for financial assistance breaks down, often because of a change in circumstance (e.g. employment) for the younger person.

10. Emotional blackmail

This can be one of the subtlest and least visible forms of abuse. Examples include an adult child refusing access to grandchildren, except in return for a loan; or an emotionally dependent adult child abusing their parents' concern by demanding money.

If you are experiencing Grandparent Alienation click here.

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Acknowledgement

This article is from the Safe & Savvy guide, a publication that was developed by the Commonwealth Bank of Australia (CommBank) Customer Advocate, together with a large range of community and academic experts.