Understanding elder financial abuse and how to prevent it

Helping seniors – parents, friends, or neighbours – with their money can be a natural progression as people age. They may lose capacity to handle their bills or find it more difficult to weigh up financial decisions.

For some, that need for a helping hand can open the door to elder financial abuse.

What is elder financial abuse?

It is the illegal or improper use of an older person’s property, finances, and other assets without their informed consent. At its worst, consent can be obtained through fraud, manipulation, or duress.

As the population ages and superannuation savings produce some of the wealthiest generations ever to retire, abuse can arise out of inheritance impatience.

Take the ‘assets for care’ arrangement that is becoming more commonplace. An older person may be persuaded to transfer their home to a child on the understanding that a granny flat and care will be provided.

Often there is no legal agreement and no independent legal or financial advice is sought. Seniors may also be coerced into signing loan documents for a child’s business or property or manipulated into changing their will.

Other instances include: going shopping for someone and keeping the change; pension-skimming; using a senior’s bank account or credit card without permission; a loan that is never paid back; or denying them access to their money or bank statements.

What are the signs?

Red flags can include difficulty paying bills; unexplained disappearances of possessions; significant bank withdrawals or unusual activity on a credit card.

Missing medications or hearing aids can be a reason for concern. They may be used to coerce the senior into a proposed financial arrangement.

Social withdrawal can be another indicator. Someone doing something untoward may prevent the older person from engaging with others including friends, other family members, or professional advisers.

How do you prevent it?

Seek independent advice before agreeing to any assets for care arrangements. Will you be able to claim a property interest or be compensated later for what you contribute? Who will it affect your pension or tax situation? What if you need to move into aged care at some point?

Proper legal agreements should be drawn up for any such arrangements as well as any loans or guarantor arrangements. Think carefully about who to appoint as a Power of Attorney.

Prevention also relies on people raising the subject with an elderly person if they suspect abuse is occurring.

How do you raise your concerns?

Here are some tips:

  • Talk to the person  –  Be aware that they may find it a difficult or embarrassing conversation so talk it over in a place where they feel safe and able to speak freely.
  • Listen  – They may need time to think about the concerns you’ve raised. Listen and respect their wishes and their right to make their own decisions. Reassure them that your support is always available.
  • Provide contact details of support services – The national elder abuse hotline is 1800 ELDERHelp or 1800 353 374. They can raise issues, get advice, and obtain referrals if needed.

The material on this website has been prepared for general information purposes only and not as specific advice to any particular person. Any advice contained on this website is General Advice and does not take into account any person's particular investment objectives, financial situation and particular needs. Before making an investment decision based on this advice you should consider, with or without the assistance of a securities adviser, whether it is appropriate to your particular investment needs, objectives and financial circumstances. In addition, the examples provided on this website are provided for illustrative purposes only. Although every effort has been made to verify the accuracy of the information contained on this website, Infocus, its officers, representatives, employees and agents disclaim all liability (except for any liability which by law cannot be excluded), for any error, inaccuracy in, or omission from the information contained in this website or any loss or damage suffered by any person directly or indirectly through relying on this information.

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