In September 2011, Hollywood legend Mickey Rooney filed a lawsuit against his stepson and his stepson’s wife, alleging that they had financially and verbally abused him over a 10-year period. At the time, those of us who work in elder care were already familiar with Rooney’s plight because several months earlier, he had testified before a U.S. Senate Special Committee on Aging, describing in detail how he had lost control over his assets and personal life:
“My money was taken and misused. When I asked for information, I was told that I couldn’t have any of my own information. I was told it was ‘for my own good’ and that ‘it was none of my business.’ I was literally left powerless… I was eventually and completely stripped of the ability to make even the most basic decisions in my own life.”
Eventually, Rooney won a $2.8 million judgment in the case, but then just six months later, he passed away at the age of 93.
Unfortunately, Rooney’s story is all too common. Over my thirty-plus years of working with families and their aging parents, I have seen time and time again how even the most intelligent and competent seniors can be duped, manipulated, and exploited. In fact, a study in 2015 found that American seniors now lose $36.48 billion each year to elder financial abuse. What’s more, researchers estimate that almost 75% of abusers are family members, friends, or neighbors—and as with Mickey Rooney, those cases can be especially devastating.
Is there anything that you, as a counselor or advisor, can do to prevent your elderly clients from being taken advantage of financially? Are you confident that you can recognize the signs of elder fiduciary abuse?
The Different Types of Elder Financial Abuse
In order to help your elderly clients avoid financial abuse, you must first have a clear understanding of what it is. Technically, there are many definitions, and the law can vary from jurisdiction to jurisdiction; however, in general terms, elder financial abuse happens when financial resources are misappropriated or inappropriately controlled in the context of a relationship where there is an expectation of trust, and in a way that causes harm to an older person. In other words, it is generally recognized to be illegal to deceptively profit from the infirmity of an elderly person.
Elder financial abuse comes in many different forms, including:
- Scams: So-called “fund transfer” scams are quite popular because it’s relatively easy (and cheap) to reach intended victims by fax, letter, or email. (Like me, you have probably received notification from a beleaguered Nigerian prince at least once over the past decade!) Con-artists use these scams to trick recipients into providing personal and/or banking information.
- Embezzlement: Employees or other professionals sometimes skim some of the funds entrusted to them by an elderly employer, and then use that money for personal gain.
- Fraud: In 2017, credit card fraud was the most common form of identity theft, followed by employment or tax-related fraud, phone or utilities fraud, and bank fraud, according to the FTC.
- Theft: Elder financial abuse doesn’t have to be any more complicated than simple thievery. For example, a son might help himself to his father’s assets, and then rationalize his actions by saying, “Dad wouldn’t mind that I take his Rolex watch. After all, he doesn’t even remember he has it.”
- Undue Influence: Because many seniors have cognitive impairments or other vulnerabilities, they’re especially susceptible to coercion. Imagine a scenario where a daughter exerts undue influence so her elderly mother will pay for a home renovation project. “Don’t put up a fuss, Mom,” she warns. “If you don’t go along with the plan, we’ll have to move you to a nursing home.” It’s insidious. It’s heartbreaking. And it happens all the time.
Why Are Seniors So Vulnerable to Financial Abuse?
As a professional who works with elderly clients, it’s important for you to recognize the four key attributes that make seniors susceptible to financial abuse.
While there are a whole myriad of types of capacity, generally speaking, it is defined as the ability or power to do, experience, or understand something. In the context of elder care, capacity relates to a senior’s ability to communicate, understand and appreciate:
- The rights, duties, and responsibilities created by a decision,
- The probable consequences for the decision maker and any other persons affected by the decision,
- The risks, benefits, and alternatives involved in the decision.
If an older adult has a condition (medical, physical, functional, or psychological) that puts them at a disadvantage, consider them vulnerable. Seniors are most vulnerable when they are:
- wheelchair dependent
- cognitively impaired
- challenged with hearing or vision loss
- grieving over the passing of a spouse or loved one
- feeling impoverished
- recovering from an illness
Is there someone exerting inappropriate pressure over your elderly client? When someone lacks capacity or is vulnerable, they’re more readily persuadable. It’s elder financial abuse if a senior is unduly influenced to make or change a financial decision to benefit the influencer.
Autonomy encompasses each of the other three characteristics listed above, and it is one of the most highly valued attributes for older adults. After all, don’t we all want to be autonomous and remain in control of our decision making and other activities for as long as we possibly can? If your elderly client has the capacity, is not harming themselves or others, is acting legally, and has not fallen prey to undue influence, make it a priority to guard and protect their autonomy.
Because elder financial abuse is such an important and multi-faceted topic, I’m going to devote two more blog posts to it. So, please stay tuned as in the future I explore other related issues, including who perpetrates elder financial abuse, how you can spot it, and ways to prevent it.
As Mickey Rooney told the other seniors listening to his testimony before the Senate Committee:
“You deserve better. You have the right to control your own life, to be happy, and not live in fear. Please, for yourself, end the cycle of abuse, and do not allow yourself to be silenced any longer. Tell your story to anyone who will listen and above all, HAVE HOPE. Someone will hear you. If we all stand strong together and speak up, we can begin to take the necessary steps to end the cycle of elder abuse.”
Related: How to Spot Elder Financial Abuse