Bria is a young woman who recently moved in with her aging grandparents to help with their daily tasks and ensure they can continue to age in place in spite of their health problems.
While she was happy to take on the work of cleaning, cooking and caring for them, Bria discovered something she was unprepared for: her grandparents are in a bad financial state.
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Bria found out that her aunt, who lived with the elderly couple previously, may have defrauded them of thousands of dollars — while racking up thousands more in credit card debt. They receive calls from debt collectors, and also their cable service has been cut off. Their credit cards were maxed out to the tune of $30,000.
The aunt has a history of financial issues. She once borrowed money from Bria’s parents, which she never paid back. Her grandparents admitted that her aunt handled their bills while she lived with them, but they’ve been hesitant to confront her or report any potential crimes to the police.
Now, Bria is searching for answers. Here are some ways to spot financial abuse, along with steps you can take to address and prevent it.
Financial abuse of older adults
Unfortunately, the situation Bria’s grandparents are in is not uncommon. Financial abuse of older adults is a serious issue. While financial fraud, such as when scammers try to steal money with phishing schemes and phone calls, is committed by strangers, financial abuse is perpetrated by people you know.
Financial abuse can come in many forms: power of attorney abuse, using credit or debit cards without permission, forgery, extortion and theft by someone you trust.
If you suspect a relative is a victim of fraud, a red flag to watch out for is if your communication with this person has become limited, especially if another caregiver is either avoiding you or telling you not to visit.
Other warning signs can include unannounced changes to an estate plan, expensive debit or credit charges, missing jewelry or other high-value items, and checks being signed when your family member didn’t have ability to write them.
Read more: How much cash do you plan to keep on hand after you retire? Here are 3 of the biggest reasons you’ll need a substantial stash of savings in retirement
What to do if you suspect elder financial abuse
It can be conflicting to deal with financial abuse if the perpetrator is a family member, but it may be a good idea to start by telling the victim that it isn’t their fault. Seeking out legal advice may feel like a difficult thing to do, but protecting your family member from further financial abuse may require it.
Bria should gather all the documentation she can of the suspected financial abuse. She may also want to pull credit reports to make sure no other credit cards or loans were taken out in her grandparents’ names. If there’s evidence of fraud, consider reporting it to the credit bureaus.
If an older adult in your family is no longer able to take care of their finances themselves, like Bria’s grandparents, it may be necessary to get a financial power of attorney. Since Bria’s grandparents are also facing worsening health, a medical power of attorney, one that can make medical decisions for them, might also be a good step.
Bria’s grandparents might be wary of alerting law enforcement, since a family member is involved in the potential crime, but financial abuse of older adults is exactly that — a serious crime.
How can you protect yourself and tackle debt
While it’s impossible to anticipate all future scenarios where you might be the victim of fraud, there are precautions you can take to protect your finances.
Shredding financial documents before throwing them away, locking up checkbooks and bank statements when people are in your home, monitoring your credit report annually and using credit cards instead of cash, so you have a record of your spending, are simple behaviors you can employ. Importantly, as you age, you should never sign any document you don’t understand.
If you think you’ve been a victim of financial abuse or fraud, tell someone you trust, tell your bank and consider reporting it to local law enforcement.
Without reporting the abuse to police and speaking to a lawyer, Bria might have little recourse to try and recoup some of her grandparents’ money from her aunt. If she chooses to pull her grandparents out of debt on her own, she should consider:
- Helping them build a new budget to squeeze out as many pennies as they can from any retirement income they may have
- Consolidating their debt and putting them on a payment plan with a potentially lower interest rate
- Negotiate with lenders to try to lower their credit card interest rates
- Hire a financial advisor or counselor to help build a roadmap toward paying off the debt
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.