The examples and perspective in this article deal primarily with the United States and do not represent a worldwide view of the subject.(March 2019) |
Elder financial abuse is a type of elder abuse in which misappropriation of financial resources or abusive use of financial control, in the context of a relationship where there is an expectation of trust, causes harm to an older person.
The Older Americans Act of 2006 defines elder financial abuse, or financial exploitation, as “the fraudulent or otherwise illegal, unauthorized, or improper act or process of an individual, including a caregiver or fiduciary, that uses the resources of an older individual for monetary or personal benefit, profit, or gain, or that results in depriving an older individual of rightful access to, or use of, benefits, resources, belongings, or assets.” [1]
Family members and informal or paid caregivers have special access to seniors and thus are often in a position to inflict financial abuse through deception, coercion, misrepresentation, undue influence, or theft. Common abusive practices include:
Family members engaged in financial abuse of the elderly may include spouses, siblings, children, grandchildren or other relatives. They may engage in the activity because they feel justified, for instance, they are taking what they might later inherit or have a sense of "entitlement" due to a negative personal relationship with the older person, or that it is somehow the price of a promise of lifelong care. Or they may take money or property to prevent other family members from getting the money or for fear that their inheritance may be lost due to cost of treating illnesses. Sometimes, family members take money or property from their elders because of gambling or other financial problems or substance abuse. [2]
Seniors are also often deliberately targeted by scams, fraud, and misleading marketing – often by otherwise legitimate businesses. [3] This may include:
A 1996 study by AARP [5] found that while individuals over 50 comprised 35% of the American population, they accounted for 57% of all fraud victims (AARP, 1996). Seniors' level of vulnerability to this type of exploitation varies by the type of scam. For example, the AARP found that lottery fraud victims were more likely to be women over 70 living alone, with lower education, lower income, and less financial literacy, while victims of investment fraud were more likely to be men between the ages of 55 and 62 who were married, with higher incomes and greater financial literacy. [6]
Hybrid Financial Exploitation (HFE) is financial exploitation that co-occurs with physical abuse and/or neglect. HFE victims are more likely to be co-habiting with abusive individual, to have fair/poor health, to fear the abusive individual, to perceive abusive individual as caretaker, and to have a longer duration of abuse. [7]
Various attempts have been made to estimate the size and scope of the problem. The primary difficulties in estimating the size of the problem are:
Author | Year | Estimated impact | Notes |
---|---|---|---|
True Link [9] | 2015 | $36 billion in annual losses | The study found that 37% of seniors affected over any given five-year period, consistent with 15% annual victimization rates found elsewhere. They do not provide a loss per incident but found any given victim loses approximately $11,600 over five years. |
Allianz [10] | 2014 | 5% of seniors report having lost money to scams, with average losses of $30,000, meaning that seniors alive in 2014 have experienced $69 billion in total losses due to financial abuse. The study does not provide an annualized figure. | The study also noted that one in five adults 40‐64 reported having an older friend or family member who has been a victim, suggesting it may be underreported by a factor of two to four versus the self-report. |
MetLife [11] | 2011 | 1,256 incidents per year reported in the press resulting in $2.9 billion in losses. There is no explicit estimate of how much is lost to incidents not reported in the press. | Their estimate is based on an estimated 1,256 incidents of financial abuse reported in the press, out of approximately 40 million seniors. The report acknowledges that making an estimate based only on press reports will produce an underestimate by a factor of five to forty. The study also found that about one third of incidents were by family and friends, with the remainder by strangers or businesses. |
New York State | 2011 | 5.2% of seniors experience financial abuse by family members | Only includes financial abuse by family members in the past year among adults 60+. Other studies have suggested about a third of incidents involve a family member or friend, so this is also consistent with a 15% victimization rate. |
Investor Protection Trust [12] | 2010 | 20% have been affected by financial services swindles in the past | IPT defined swindles as "inappropriate investment, unreasonably high fees for financial services, or outright fraud." |
MetLife [13] | 2009 | 1,076 incidents per year resulting in $2.6 billion in losses | Based on only fraud reported in the press. The report acknowledges that making an estimate based only on press reports will produce an underestimate by a factor of five, though other estimates suggest it may be closer to a factor of forty. |
Federal Trade Commission [14] | 2007 | 14% of people (all ages) experience fraud loss of $50 billion in total | The Stanford Center on Aging inflation-adjusted this to 2012 dollars. They also cited another report listing a 15% victimization rate and average losses of $216 per victim. Another study found a 14% victimization rate among seniors. [15] |
AARP [16] | 2003 | 4% of adults 45+ self-reported experiencing a "major consumer swindle or fraud" in the last year | |
Senate Committee on Aging [17] | 2000 | Americans (all ages) lose $90 billion per year to telemarketing fraud and identity theft. | This is often combined with AARP and NASAA studies that suggest that approximately half of fraud victims are seniors to arrive at a number around $40-$50 billion. |
Other effects include damage to credit, missing work, depression, and loss of sleep. [18]
Elder abuse is "a single, or repeated act, or lack of appropriate action, occurring within any relationship where there is an expectation of trust, which causes harm or distress to an older person." This definition has been adopted by of the World Health Organization (WHO) from a definition put forward by Hourglass in the UK. Laws protecting the elderly from abuse are similar to and related to laws protecting dependent adults from abuse.
Phone fraud, or more generally communications fraud, is the use of telecommunications products or services with the intention of illegally acquiring money from, or failing to pay, a telecommunication company or its customers.
Elderly care, or simply eldercare, serves the needs of old adults. It encompasses assisted living, adult daycare, long-term care, nursing homes, hospice care, and home care.
The United States Postal Inspection Service (USPIS), or the Postal Inspectors, is the law enforcement arm of the United States Postal Service. It supports and protects the U.S. Postal Service, its employees, infrastructure, and customers by enforcing the laws that defend the nation's mail system from illegal or dangerous use. Its jurisdiction covers any "crimes that may adversely affect or fraudulently use the U.S. Mail, the postal system or postal employees." With roots going back to the late 18th century, the USPIS is the oldest continuously operating federal law enforcement agency.
Voice phishing, or vishing, is the use of telephony to conduct phishing attacks.
In a reloading scam, a victim is repeatedly approached by con artists, often until "sucked dry". This form of fraud is perpetrated on those more susceptible to pressure after the first losses, perhaps because of hopes to recover money previously invested, perhaps because of inability to say "no" to a con man.
Telemarketing fraud is fraudulent selling conducted over the telephone. The term is also used for telephone fraud not involving selling.
Bet Tzedek is an American non-profit human and poverty rights organization based in Los Angeles, California.
Victimisation is the state or process of being victimised or becoming a victim. The field that studies the process, rates, incidence, effects, and prevalence of victimisation is called victimology.
Trauma bonds is a term developed by Dutton and Painter to describe emotional bonds with an individual that arise from a recurring, cyclical pattern of abuse perpetuated by intermittent reinforcement through rewards and punishments. The process of forming trauma bonds is referred to as trauma bonding or traumatic bonding. A trauma bond usually involves a victim and a perpetrator in a uni-directional relationship wherein the victim forms an emotional bond with the perpetrator. This can also be conceptualized as a dominated-dominator or an abused-abuser dynamic. Two main factors involved in the establishment of a trauma bond are: a power imbalance and intermittent reinforcement of good and bad treatment, or reward and punishment. Trauma bonding can occur in the realms of romantic relationships, platonic friendships, parent-child relationships, incestuous relationships, cults, hostage situations, manager vs their direct reports, sex trafficking, or tours of duty among military personnel.
Economic abuse is a form of abuse when one intimate partner has control over the other partner's access to economic resources, which diminishes the victim's capacity to support themselves and forces them to depend on the perpetrator financially.
Fortune telling fraud, also called the bujo or egg curse scam, is a type of confidence trick, based on a claim of secret or occult information. The basic feature of the scam involves diagnosing the victim with some sort of secret problem that only the grifter can detect or diagnose, and then charging the mark for ineffectual treatments. The archetypical grifter working the scam is a fortune teller who announces that the mark is suffering from a curse that their magic can relieve, while threatening dire consequences if the curse is not lifted.
A technical support scam, or tech support scam, is a type of fraud in which a scammer claims to offer a legitimate technical support service. Victims contact scammers in a variety of ways, often through fake pop-ups resembling error messages or via fake "help lines" advertised on websites owned by the scammers. Technical support scammers use social engineering and a variety of confidence tricks to persuade their victim of the presence of problems on their computer or mobile device, such as a malware infection, when there are no issues with the victim's device. The scammer will then persuade the victim to pay to fix the fictitious "problems" that they claim to have found. Payment is made to the scammer through ways which are hard to trace and have fewer consumer protections in place which could allow the victim to claim their money back, usually through gift cards.
True Link Financial, Inc. is a San Francisco, California based financial technology firm that offers investment accounts and prepaid cards customized for seniors, people with disabilities, and people recovering from addiction. Notable investors include Y Combinator, Khosla Ventures, QED Investors, Mitch Kapor, Alexis Ohanian, Eric Ries, Initialized Capital, Matt Cutts, and Centana Growth Partners.
Elder rights are the rights of older adults, who in various countries are not recognized as a constitutionally protected class, yet face discrimination across many aspects of society due to their age.
Mobile tower rental business offers are a new form of mass marketing fraud in India. These frauds are unique to the Indian subcontinent. Mass-marketing fraud is defined as fraud committed via mass communication media using the telephone, mail, and the Internet.
The feminist pathways perspective is a feminist perspective of criminology which suggests victimization throughout the life course is a key risk factor for women's entry into offending.
Utility scams are fraudulent acts where a perpetrator calls or arrives unannounced at a utility customer's house in an attempt to take money or sell unnecessary energy accessories through misrepresentation. Often, the fraud involves telling the victim that he or she owes the utility company money and that their power, gas, or water will be shut off immediately unless payment is made.
On October 18. 2017, President Trump signed into law the Elder Abuse Prevention and Prosecution Act of 2017, identifying the need for data on elder abuse. An elder abuse case has many stages from the incident through investigation, prosecution, and trauma recovery. Several federal agencies currently collect elder abuse data on an ongoing basis at different points in the process.