The immense responsibility of advising clients in and around their wealth is a responsibility not lost on me. An epidemic that is growing and our most vulnerable need safeguarding against is financial elder abuse.
Financial elder abuse has become a pervasive and troubling issue that affects older adults across the globe. This type of abuse involves taking advantage of elderly individuals by manipulating their financial resources, leading to significant financial losses and emotional distress. according to the Australian Banking Association, about one in 10 Australians will be impacted by elder financial abuse. More than half (57%) of Australians are worried about a loved one experiencing it. This article explores the alarming rise of financial elder abuse, its various forms, the consequences it has on the victims, and possible ways to prevent and combat this growing epidemic.
Forms of Financial Elder Abuse
Financial elder abuse comprises a range of deceptive tactics targeting vulnerable older adults. The most common forms include:
1. Theft
This occurs when an individual unlawfully appropriates money or other assets belonging to an elderly person. This can involve stealing cash, forging checks, or misusing credit cards or banking information.
2. Fraud
This involves deceiving older adults through scams, fraudulent schemes, or investment fraud, exploiting their trust to gain access to their finances. Common examples include lottery scams, fake charities, telemarketing frauds, or identity theft.
3. Coercion and undue influence
Some perpetrators manipulate or intimidate elderly individuals into making financial decisions that are not in their best interests. This could involve pressuring them into changing their will, signing over property, or becoming a guarantor for loans.
4. Power of Attorney abuse
Persons granted power of attorney over an elderly individual's finances may exploit their authority for personal gain, mismanaging funds, or stealing assets.
Consequences and Impact
Financial elder abuse can have devastating effects on victims. It not only results in significant financial losses but also leads to emotional distress, deteriorated physical health, and diminished overall well-being. Older adults who fall victim to financial abuse can experience feelings of shame, helplessness, and distrust, which may contribute to social isolation and withdrawal. In severe cases, victims may find themselves financially ruined, dependent on government assistance, or in dire need of healthcare and social support.
Prevention and Combating Financial Elder Abuse
Safeguarding older adults against financial abuse requires a multi-faceted approach involving individuals, communities, financial institutions, and policymakers. Some effective preventive measures include:
1. Raising awareness
Educating both older adults and their caregivers about the common signs and methods of financial abuse can help ensure they are vigilant and take appropriate actions to protect themselves.
2. Strengthening legal protections
Governments should enact and enforce strict laws designed to protect older adults from financial abuse. This includes enhancing penalties for perpetrators, improving reporting mechanisms, and establishing regulatory bodies to monitor
If you suspect financial elder abuse in your network I strongly suggest seeking help. There are some wonderful resources available in each state. See more detail here - https://www.cpaaustralia.com.au/public-practice/public-practice-research/financial-abuse-of-older-people/elder-abuse-services
Alternatively, please call 1800 ELDERHelp (1800 353 374)
Kylie Harding is an Investment Adviser who believes in free access to information about building financial literacy at every stage in life has the potential to empower women and inspire economies.
Contact Kylie today on [email protected] or 02 9998 4206.
