What is Financial Exploitation?
Financial exploitation occurs when a person misuses or takes the assets of a vulnerable adult for his/her own personal benefit. This frequently occurs without the explicit knowledge or consent of a senior or disabled adult, depriving him/her of vital financial resources for his/her personal needs.
Assets are commonly taken via forms of deception, false pretenses, coercion, harassment, duress and threats.
These are commonly reported forms of financial exploitation* reported to Adult Protective Services agencies:
- Theft: involves assets taken without knowledge, consent or authorization; may include taking of cash, valuables, medications other personal property.
- Fraud: involves acts of dishonestly by persons entrusted to manage assets but appropriate assets for unintended uses; may include falsification of records, forgeries, unauthorized check-writing, and Ponzi-type financial schemes.
- Real Estate: involves unauthorized sales, transfers or changes to property title(s); may include unauthorized or invalid changes to estate documents.
- Contractor: includes building contractors or handymen who receive payment(s) for building repairs, but fail to initiate or complete project; may include invalid liens by contractors.
- Lottery scams: involves payments (or transfer of funds) to collect unclaimed property or “prizes” from lotteries or sweepstakes.
- Electronic: includes “phishing” e-mail messages to trick persons into unwittingly surrendering bank passwords; may include faxes, wire transfers, telephonic communications.
- Mortgage: includes financial products which are unaffordable or out-of-compliance with regulatory requirements; may include loans issued against property by unauthorized parties.
- Investment: includes investments made without knowledge or consent; may include high-fee funds (front or back-loaded) or excessive trading activity to generate commissions for financial advisors.
- Insurance: involves sales of inappropriate products, such as a thirty-year annuity for a very elderly person; may include unauthorized trading of life insurance policies.
* Definitions of financial exploitation vary from jurisdiction to jurisdiction. Please contact your local APS office for additional information.
When to Report Checklist
If you witness a life-threatening situation involving a senior or adult with disabilities, dial 911. Contact your local Adult Protective Services agency any time you observe or suspect the following:
- Termination of vital utilities such as telephone, water, electricity / gas, or garbage
- Unpaid bills and liabilities despite adequate income
- Oversight of finances surrendered to others without explanation or consent
- Transferring assets to new “friends” assisting with finances
- Checks written to “Cash”
- Does not understand his/her current finances, offers improbable explanations
- Unexplained disappearance of cash, valuable objects, financial statements
- Unexplained or unauthorized changes to wills or other estate documents
- Giving-away money or spending promiscuously
- Appearance of property liens or foreclosure notices
The National APS Resource Center’s partner, the Women’s Institute for a Secure Retirement (WISER), has created eight fact sheets with a wealth of information on senior financial exploitation. Two are general in nature, providing an overview of financial abuse and describing the most common types of scams and frauds. The other six each describe a specific form of financial exploitation in detail, with information about how the abuse occurs, what to do when it is discovered, and what resources are available to address it. These can be used by APS when investigating a case involving, for example, power of attorney abuse, and can also be used as educational materials for the general public or other professionals.
Visit the links below to view each of these fact sheets.