You hear a lot in the press about “elder abuse,” and the image that comes to mind is physical abuse or violence. But the most likely scenario, according to the AARP, is the 20-year-old son gently accompanying his elderly grandmother to the bank, where she querulously requests a $4,000 withdrawal. Debra Whitman, executive vice president and chief public policy officer at AARP, estimates that this kind of financial exploitation costs the average victim $120,000, and an aggregate of $2.9 billion a year across the U.S.
Repeated, out-of-the-ordinary cash withdrawals are the biggest clue to exploitation and scams. The AARP has recently launched an online training program called AARP BankSafe, which is available to bank and credit union employees who deal with elderly customers. The program comes out just in time for the holidays, where more family members and friends are in town—who might be ready to take Grandma to lunch, with a quick stop at the bank.
The legal definition of exploitation is abusing one’s relationship—here applied to a relationship with an older relative or friend, to coerce the senior into handing over part of his or her nest egg or transfer property. It can involve misusing a power of attorney, denying an elderly person access to his or her own money, or withdrawing money out of a senior’s bank account. Most perpetrators are people known to the victim, such as family members or caregivers in the home.
Theoretically, tellers are supposed to ask customers a number of questions when they spot a possible red flag, and to call in a supervisor who might intervene. There is evidence that the approach is becoming at least partially effective. The AARP has noted that, with increasing vigilance at financial institutions, suspicious activity reports for elder financial exploitation quadrupled from 2013 to 2017, the most recent year that we have statistics. But even so, these reports may be a small fraction of actual incidents.
For citizens who see elder abuse, the AARP has established a “Fraud Watch Network” hotline: 877-908-3360.
This article was written by an independent writer for Brewster Financial Planning LLC and is not intended as individualized legal or investment advice.