Understanding elder financial abuse to protect your family
To help protect your older relatives, it’s important to understand that elder financial abuse can take many different forms and can be committed by a variety of people, including strangers, friends or even family members.
People over the age of 50 and the elderly are particularly vulnerable to mistreatment, from scams and fraud to emotional blackmail and theft, and the impacts can extend beyond financial loss – for example, causing anxiety and depression, or preventing access to food, medical care and safety.
Similarly, people who are alone or isolated, have a physical or mental disability, are reliant on others for their care, experience language difficulties or have a limited understanding of finance are especially at risk of experiencing elder financial abuse.
A bigger impact than imagined
Older people tend to be less tech-savvy than their younger counterparts, and this puts them at greater risk of falling victim to online scams or fraud.
Additionally, it’s hard to assess the full magnitude of the problem because a lot of people don’t realise they’ve been the victim of a scam or fraud. And those who are aware may feel ashamed to admit it or report it.
However, that the real impact of these scams and fraudulent activity is a great deal larger than many people may imagine, with the available statistics not making for pleasant reading – for example, in FY2014/15 there were more than 1.6 million Australians affected by financial abuse costing $3 billion, 76% of which affected individuals aged 50 years or older.
Identifying elder financial abuse
As older people are often dependent on family members and other people for their day-to-day care or social contact, they can be particularly vulnerable to people in this circle abusing their position to get control their money or other assets.
Some of the most common types of abuse can include:
- Abusing power of attorney – Abuse can happen when a trusted person is given power of attorney over someone’s assets, and they abuse their ability to make decisions for them.
- Pressure, threats and intimidation – This could be physical or emotional pressure on an older person to make them a beneficiary of their Will or sign over ownership of assets.
- Theft – Older people are particularly at risk of theft, especially if they have care needs. Thieves can exploit anyone’s physical or mental vulnerabilities.
To help identify other warning signs indicating possible elder financial abuse, visit the ASIC MoneySmart website at https://www.moneysmart.gov.au/.
For specific advice, speak with your OBT financial adviser on 5462 2277. Rodney Turner and OBT Financial Group are Authorised Representatives of Lonsdale Financial Group Ltd ABN 76 006 637 225 | AFSL 246934.
This is general advice only and does not take into account your financial circumstances, needs and objectives. Before making any decision based on this document, you should assess your own circumstances or seek advice from a financial planner and seek tax advice from a registered tax agent. Information is current at the date of issue and may change. This information and certain references, where indicated, are taken from sources believed to be accurate and correct. To the extent permitted by the Law, Lonsdale, its representatives, officers and employees accept no liability for any person that relies upon the information contained herein. Information is current at the date of issue and may change.
- ABS, Personal Fraud, 2014-15
- Commonwealth Bank, 2018