In 2016, the Centers for Disease Control and Prevention declared elder abuse a public health concern, citing a significant increase in cases of elder abuse and a report detailing the ways in which the many forms of elder abuse correlate with early, untimely death. Financial elder abuse, in particular, can lead to neglect and cause severe psychological distress.
Financial elder abuse may involve:
- Not performing financial duties associated with caregiving, such as paying bills or buying necessities.
- Fraudulent withdrawals or purchases at an elder’s expense.
- Unauthorized changes to an elder’s will or power of attorney.
While the scope and pervasiveness of financial elder abuse can be disheartening, forensic accounting services – such as those provided by SDC CPAs – can be crucial for caregiving agencies and organizations suspecting elder financial exploitations.
When Elder Financial Exploitation Takes Place
According to a report by the Consumer Financial Protection Bureau, more than 180,000 cases of elder financial exploitation were reported in 2019. Of these reported cases, 36% involved theft by caregivers or fiduciaries. Elder exploitation by caregivers and fiduciaries can be the costliest, with victims experiencing average loss of approximately $45,000.00 to $85,000.00, depending on the victim’s relationship to the culprit.
Unfortunately, these statistics do not sufficiently portray the prevalence of elder financial exploitation, as many cases go unreported for a variety of reasons. Seniors may avoid reporting fraud out of embarrassment, fear of retaliation, inability to voice concerns, or desire to protect the guilty individual. Additionally, memory or sight-impaired seniors may be more easily manipulated by the caregivers on which they rely.
Due to these barriers to reporting, most cases of elder financial abuse take six to nine months to be discovered. And typically the severity and frequency of theft increases over time. Organizations and businesses that provide care for the elderly can implement certain measures to help prevent or detect caregiver fraud and theft sooner. Some risk of theft and financial exploitation may be mitigated by carefully screening caregivers. Background checks, face-to-face meetings, and certifications can help individuals assess the trustworthiness of a caregiver. Hiring through an agency may provide additional oversight and security measures.
Additionally, organizations providing elder care can request a family member or independent advisor receive duplicate copies of the senior’s bank statements in order to potentially help prevent elder exploitation early. Another important safety measure is to create a written and photographic inventory of valuables, especially jewelry, in the house.