Addressing Financial Exploitation of Older Adults

Compared to a decade ago, there’s greater awareness, more reporting and stronger laws in place to address the financial exploitation of older adults.

The issue was not even recognized for many years, says Kevin Hansen, PhD, JD, LLM.

Kevin Hansen
Kevin Hansen

“The first people we protected were animals, actually,” says Hansen, an assistant professor with the Health Care Administration Program and Center for Health Administration and Aging Services Excellence at the University of Wisconsin–Eau Claire.

“We had animal abuse statutes before we even had child abuse statutes. And then we thought about domestic violence. So elder abuse is still relatively new in our concept of this is wrong, we should do something about it.”

Financial exploitation is the most common form of elder abuse. An estimated five percent of older Americans have been victims of financial exploitation, with at least $2.9 billion lost in 2010 alone. That’s in addition to the impact on the older adult’s health, well-being and family. Victims face increased risk of depression, hospitalization, nursing home placement, and death.

Tragically, family members are often the perpetrators.

“Family members get financial access to the older adult, with a financial power of attorney or guardianship from the courts,” explains Hansen, who advocated for vulnerable adults as an attorney with the state of Minnesota and with the nonprofit ElderCare Rights Alliance, before teaching at UW–Eau Claire.

“Caregiver stress can contribute,” he says. “Our default presumption is that family members take care of family members. The research and the cases that I’ve seen anecdotally say that’s not always true.”

It’s generally up to the states to define financial exploitation, and to county or local officials to investigate and prosecute cases. Recently, Hansen and colleagues analyzed how well state laws reflect current understanding.

“State laws have done pretty well keeping up with the research,” he says, “but they’ve missed a few things.”

“Wisconsin’s adult protective services statutes are much more thorough” than the criminal laws that relate to financial exploitation, says Hansen. The state’s protective services laws cover misuse and misappropriation of funds, wrongful transfers, identity theft, and abuse or misuse of a fiduciary authority, such as power of attorney or guardianship.

It’s important to cover instances where the financial activity “is not illegal, but you’re misusing the funds because you’re not using them for the benefit of the vulnerable adult,” explains Hansen. He praises Wisconsin for including forgery and misuse of credit cards and bank cards under identity theft.

While protections against financial exploitation should be strengthened, it’s important not to undermine older adults’ autonomy.

“I have a problem with age-based laws, which might declare you automatically vulnerable if you’re 60 or older,” says Hansen. “But when you get rid of the age-based criteria, then you need to show that the person can’t care for themselves or can’t report to authorities if something bad happened to them. That adds burdens to adult protection and law enforcement and prosecutors. It’s harder for them to get involved. There’s a balancing act of age-based or functional-based laws, and whether they’re ageist or not.”

Healthcare providers and long-term care facilities are uniquely positioned to notice and report early signs of potential financial exploitation.

Community-dwelling older adults “might be most likely to see their doctor regularly,” says Hansen. “Older adults generally have a lot of trust in their doctor, looking to them for guidance.”

Assisted living or nursing homes might notice “an unpaid bill or a resident thinking they had money to get their hair done, but their account is empty,” says Hansen. “The facility might be the first to be aware that there’s something funny going on, which puts them in a good position to report suspected financial exploitation, especially if it’s by a family member.”

To encourage assisted living and nursing homes to take action, the U.S. Consumer Financial Protection Bureau released a guide on protecting residents from financial exploitation.

Other ways to reduce and address incidents of financial exploitation include “better education for family members, better protection built into the fiduciary documents themselves, more funding for adult protection and law enforcement, and more awareness by judges and prosecutors of the uniqueness of crimes against vulnerable adults,” says Hansen.

“We’re getting better,” he adds. “It’s incremental progress, but it’s miles ahead of where we used to be.”

–Diane Farsetta