About Financial Exploitation

About Financial Exploitation—Highlights PDF

Frequently Asked Questions (FAQ)

  1. What is financial exploitation?
  2. What causes financial exploitation?
  3. What is the impact of financial exploitation?
  4. How common is financial exploitation?
  5. Why is financial exploitation not always reported?
  6. Why is it important to report financial exploitation?
  7. What are some of the signs of financial exploitation?
  8. Why are seniors more vulnerable to financial exploitation?

1. What is financial exploitation?

Financial abuse and economic crime are both forms of financial exploitation.

Financial Abuse

Financial abuse is the unethical or illegal misuse of the money, property, or other assets of an older adult. This can include placing inappropriate pressure on an older person in order to get access to her or his assets. Financial abuse is sometimes referred to as financial or material exploitation.

Financial abuse is usually committed by close family members, professional (paid) care providers or friends. In the majority of cases that we know about, the abuser is someone the older person knows. Examples of this type of financial abuse include:

  • forging your signature, misusing or stealing your cheques or money without your permission;
  • forcing or deceiving you into signing any document (for example, a contract or will); and
  • improper use of guardianship or power of attorney.

Misuse of power of attorney is one of the more frequently reported forms of financial abuse.

In cases of abuse by a family member, care provider or friend, financial abuse often goes hand-in-hand with psychological or emotional abuse. When someone is threatening to withhold affection or social contact if you don’t hand over your money, yelling at you, or calling you names while stealing from you, it is hard not to be affected emotionally. Sometimes just the shame and embarrassment of having a family member or friend—or anyone you trust—take your money or property without your permission is emotionally hurtful.

Economic Crime

The Better Business Bureau of the Maritime Provinces has a list of the Top 10 Scams. Visit their website for a description of each scam.

Most cases of economic crime are committed by strangers and it most often takes the form of consumer fraud. Examples of economic crime include scams that can be carried out:

  • by door-to-door sales persons (such as home repair scams)
  • through the internet or email
  • by telemarketers, and
  • through the mail (such as sweepstakes scams).

There are many other forms of consumer fraud including investment fraud and identify theft.
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2. What causes financial exploitation?

Financial abuse

In some cases, unhealthy relationships and patterns of family and domestic violence may be seen within the family as ‘normal’ and may continue later in life. Financial abuse may be another way that the abuser exercises her or his power and control over the older person.

Sometimes financial abuse stems from a sense of entitlement adult children or grandchildren (or other family members) feel they have to the assets of the older person. It is important for seniors to know that their money is their money. They are under no obligation to give it to family members (or anyone else who demands it).

Many times, family or friends act in a way that they think is helpful to the senior but in fact reduces the senior’s ability to manage his or her own affairs and access his or her own money or assets. Not every abuser means to cause harm even though the impact of his or her actions is the same. In these cases, it is important for seniors to make their wishes known and to assert their independence.

Economic crime

Anyone can be a victim of economic crime—young, old, rich and poor. Perpetrators of economic crime are opportunistic. Simply not knowing how to take precautions can leave someone vulnerable to criminals. Education and awareness are essential for protection and prevention.

In cases of both financial abuse and economic crime
One of the most significant factors contributing to all forms of exploitation of older adults is ageism. Ageism is defined as negative attitudes and behaviours towards an individual which are based solely on the age of the person. Ageism creates assumptions and negative stereotypes of older persons and can result in abusive behaviours.
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3. What is the impact of financial exploitation?

Financial exploitation can have far reaching effects. Seniors can be devastated by the loss of even small amounts of money, and may even lose their ability to live on their own. In the case of financial abuse, what is equally devastating is the loss of trust in someone they depended upon.

The stress of financial abuse and economic crime can have immediate and long lasting physical and emotional effect. This can include depression and it can even lead to death from health problems or suicide.
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4. How common is financial abuse?

(The information in this section is taken from the National Clearinghouse on Family Violence 1998 publication Financial Abuse of Older Adults.)

A 1998 British Columbia survey found that 8 % of older adults had been financially abused, with the average loss being $20,000 each.

Other Canadian studies undertaken between 1985 and 1993 indicate that financial abuse is the most commonly reported form of abuse experienced by older people.

Do statistics tell the full story?
It is impossible to know exactly how many Canadian seniors experience financial abuse for several reasons: financial abuse is not defined the same way across Canada; older adults may not know when it happens; and there are few studies on financial abuse. The main reason we do not have accurate information is that financial abuse, like other forms of abuse, is under-reported.

As a society we need to recognize and report abuse and understand how to respond to unacceptable behaviour.
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5. Why is financial abuse not always reported?

The reasons for not reporting financial abuse are complex. Even if they want to report financial abuse, some seniors may not know how and where. Limited literacy and language or cultural barriers can also prevent some seniors from reporting abuse or asserting their independence. Being socially or geographically isolated can also make it hard for some people to report.

Older adults who experience financial abuse may not report because they are ashamed, embarrassed, or are afraid there will be negative consequences from the abuser if they do report. The older person may be dependent on the abuser for assistance and could be afraid of being neglected or left alone by the abuser. Many older people fear having to live in a nursing home and believe that this will happen if they lose their primary support person, even if he or she is abusing them. They may feel too proud to report abuse, and think that reporting would reveal weakness. They may not want to get the abuser into trouble.

Relationships with abusers are complex. There can be unresolved emotions and feelings of resentment, guilt and obligation. For example, an older adult who is financially abused by a dependent adult child may feel an obligation to provide support and protection to her or him. Combined with an abuser’s misguided sense of entitlement, this dynamic can lead to abuse.

In some cases, self-esteem and low self-worth can be barriers. The older adult may not feel that he or she is important enough to report abuse and seek help.

Individuals who witness or suspect abuse may not report because they are unaware of what to do. They may lack knowledge about the signs and symptoms of abuse, or because they do not want to be involved.

Societal values and norms also have a part to play in shaping attitudes about what is ‘serious’ and should be reported, and what should be ignored or left unchallenged. Culture also determines family values and behaviours, and whether and how abuse is recognized and acknowledged.

In the case of economic crimes such as consumer fraud, older adults may feel embarrassed and afraid of losing their independence if their ‘capacity’ is challenged by family members who find out about the crime.
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6. Why is it important to report financial exploitation?

Reporting financial abuse can help to provide accurate statistics about the incidence and type of abuse. Reporting can also help the legal system and service providers understand how they can prevent financial abuse and assist those who have experienced it.

Reporting can help older adults who have experienced financial abuse. It can open the door for action that addresses the abuse. It can also help the older adult to know that they are not alone and are not to blame.

Reporting helps make financial abuse a ‘serious’ issue. The more we know about and understand it, the more can be done to prevent financial abuse and economic crime. For example, media stories on financial abuse and economic crime can help the public to understand the issue and take it seriously.

In cases of economic crime, reporting can often bring new scams to the attention of police and they may issue public warnings to alert others to the scam.
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To report economic crime or suspected financial abuse of any kind, call your local police service.

For economic crime and consumer fraud issues, you can also report scams at: www.phonebusters.com or call: 1-888-495-8501

7. What are some of the signs of financial exploitation?

Here are some signs and symptoms of financial exploitation:

  • sudden changes in bank account or banking practice, including an unexplained withdrawal of large sums of money by a person accompanying the older adult;
  • the inclusion of additional names on an older person’s bank signature card;
  • unauthorized withdrawal of the older person’s funds using her or his ATM card;
  • abrupt changes in a will or other financial documents;
  • unexplained purchases or abuse of funds by persons appointed in a Power of Attorney;
  • unexplained disappearance of funds or valuable possessions;
  • substandard care being provided or bills unpaid despite the availability of adequate financial resources;
  • discovery of an older person’s signature being forged for financial transactions or for the titles of her or his possessions;
  • sudden appearance of previously uninvolved relatives claiming their rights to an older person’s affairs and possessions;
  • unexplained sudden transfer of assets to a family member or someone outside the family;
  • the provision of services that are not necessary; and
  • an older person’s report of financial exploitation.

Financial abuse can be difficult to recognize. People working in banks and other financial institutions may be in a unique position to see the warning signs of financial abuse. Financial institutions are beginning to understand that staff need training to recognize problems, prevent financial abuse and assist older customers who may be at risk.
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8. Why are seniors more vulnerable to financial exploitation?

It is a myth that financial abuse mostly happens to seniors who are mentally incompetent. While declining mental and physical ability increases a person’s vulnerability to abuse, the fact is that most older adults who experience financial abuse are mentally competent and able to make decisions for themselves.

Remember, financial exploitation can happen to anyone. You are not alone, and you are not to blame. Knowledge is your best defense.

Financial abuse by family members, friends or caregivers

When financial abuse is committed by a family member or friend, the dynamics of the relationship are often complicated and can reflect old patterns of behaviour. Financial abuse often goes hand in hand with psychological abuse (manipulation, intimidation, harassment).

The older adult and the abuser, who is often an adult child or grandchild, may be dependent on each other. The older person may be dependent on the abuser for emotional support, assistance with daily living, or assistance with conducting financial business. The senior, therefore, may be reluctant to report abuse, thinking that no one else cares about them or is able to help or support them. The senior may have strong feelings for the abuser and not want him or her to be ‘hurt’ or get into trouble by making a report. The older person may also fear retaliation.

The abuser may also be financially dependent on the older adult. If there is a parent-child relationship, the senior may feel obliged to help the child, even an adult child. In this case, the parent would put up with abuse, feeling that they cannot say ‘no’ or turn away when her or his child is in need.

The abuser may also suffer from stress, unemployment and chronic psychological or personal substance abuse or other addictions. The abuser may also have a false sense of entitlement to the older person’s money or property. This type of abuse can involve large sums of money, but can sometimes occur as a pattern of escalating abuses. Abuse often gets worse over time.

Economic Crime

Societal values have changed over the last several decades. At one time, trust and respect were highly valued and people could rely on a ‘handshake’ to close a business deal. In the computer age, business has become a largely ‘faceless’ transaction, making it easier for offenders to escape accountability.

Our communities have also changed. Individuals have become more isolated from their surrounding communities, and the bond of trust and reliance we once enjoyed has been weakened. The potential for financial crimes has increased, making it more important for consumers to be educated about how to conduct business safely. Education and awareness are the most useful tools to prevent financial exploitation.

Ageism is one of the most significant contributing factors to the incidence of all forms of elder abuse. Ageism is defined as negative attitudes or behaviours toward an individual which are based solely on the age of the person. Ageism is a form of discrimination, oppression and prejudice like racism or sexism and results in disrespect for older persons. Stereotyping of seniors usually results in negative attitudes about becoming older, and leads people to assume that older people are less able.

The rise in financial crimes against older persons reflects the underlying attitudes of ageism. Many people do not realize that they hold any beliefs or attitudes that could be called ageist. Education and awareness are the most important tools to dispel myths and portray an accurate picture of aging. The vast majority of older adults are perfectly competent to make decisions and take care of themselves.

When financial exploitation is committed by strangers, there are different dynamics than when it is committed by family members or friends. The National Advisory Council on Aging, in its series “Beware of Fraud!”, reports that criminals look for vulnerability rather than a specific age group. They report that seniors are prime targets for the following reasons:

  • Seniors often live alone and don’t have someone to give a second opinion about scam opportunities.
  • Seniors are usually home during banking hours and usually have ready access to their bank accounts, making them attractive targets.
  • Seniors may not be well-informed about how to identify and respond to the various types of scams.

Information from the Prevention and Awareness of Crime and Theft (PACT) Committee also indicates that seniors are targeted because:

  • they have saved money over a lifetime;
  • they trust strangers who appear respectful;
  • they may feel obligated to pay when someone insists they must;
  • they tend to be more compassionate and want to help if they can; and
  • they may be reluctant or afraid to tell someone they have been victimized.

It is easy to unwittingly provide information that helps the offender carry out the fraud. It is essential to have the necessary information to protect ourselves and prevent fraud, financial abuse and exploitation.
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