Elder Financial AbuseElder financial abuse is a despicable fraud that targets older members of our population. Often, these victims live alone, have diminished mental faculties, or are financially unsophisticated. This type of abuse is unfortunately all too common.

A 2016 study by Allianz Life Insurance Company found that 37% of active care givers reported their client had experienced financial abuse or exploitation with a loss’.1 In 40% of those cases the frauds occurred on multiple occasions.2

Many believe financial elder abuse cases are vastly under reported. In all, elder financial abuse robs one million seniors out of approximately $2.65 billion annually.3

The abuse comes in many forms-both blatant and subtle. Examples range from taking money through coercion or forging signatures to charging for bogus services, or using their property without permission.

The most high-profile case of elder financial abuse was committed by the son of famous New York socialite and philanthropist, Brooke Astor. Anthony Marshall committed financial elder abuse amounting to millions of dollars over several years as Ms. Astor’s mental health deteriorated from Alzheimer’s. Marshall was eventually convicted of grand larceny.4 Financial elder abuse cases have been historically difficult to prosecute but this case may hopefully change that.

Who Commits Elder Financial Abuse?

While almost anyone is capable of committing financial elder abuse, statistics show the main perpetrators are the victim’s relatives, personal caregivers and their trusted professionals.


Unfortunately, the biggest antagonists in this sad act are family members and their spouses. The top culprit is typically the child of the elder victim. A survey of financial advisors at Merrill Lynch Wealth Managers corroborated this claim-revealing that the children of their elder clients were the main perpetrators (71%) of the fraud.5

Primarily, it’s the sons that are likely to be the fraudsters (2.5x more likely than any other family member).6

The most dangerous act is an elderly person giving a family member Power of Attorney, which gives them control over the account as they see fit. Now, the family member can ‘legally’ take money from the victim!

Many children feel “justified” in their acts because they are expecting (or have been promised) a future inheritance from the victim. Some believe that the elderly relative may begin to spend ‘their’ inheritance because of physical or mental problems. Other times, there may be a number of beneficiaries involved (perhaps several children of a widow) and one attempts to steer some of the funds disproportionately their way now, in anticipation of a future inheritance battle, possibly probate.

However these family members may justify it, it is fraud and it is illegal. As the Brooke Astor case showed, elder financial abuse can bring charges of grand larceny and other criminal charges.


After direct relatives, caregivers commit the most elder financial abuse. There are many ways these helpers can gain a victim’s trust and then siphon money from them. It can be quite subtle at times- like charging for additional services, not performing services or falsifying time sheets for the client to sign off on.7

Of course, the caregiver has physical access to the home and can rummage through basically anything they want. Obviously, these workers must be thoroughly vetted before hiring.


Other participants include attorneys, bankers, even crooked financial advisors. Some professionals overcharge the elderly for their services or coerce victims to sign documents they cannot understand. There are a number of unlicensed dealers out their pitching “deals” that promise unrealistic rates of returns.

Predatory lenders may talk an elderly person into a costly, potentially inappropriate loan (often a reverse mortgage).8 They may play on the victim’s fears of outliving their money and encourage ‘tapping the equity in your home.’

Once this money has become liquid (turned into cash) there may be another investment professional that pushes an inappropriate annuity, also playing on the longevity risk fears. It may be either an insurance broker or a dual-licensed financial advisor.

While many annuities are fine, some have very high, up-front fees and commissions (front loads) that provide coverage that the elderly person may not need. Some may pitch annuities that don’t mature until the client is 100 years old!9 It’s important to check your advisor at FINRA’s broker check on their website.10 You can verify that the financial professional is licensed and read any complaints or sanctions against them.

There are a number of policies in place by the financial community to combat financial elder abuse. Bank tellers are trained to detect suspicious activity. Also, call center employees at financial institutions are trained to identify red flags like adding new people to an account, subsequently giving them access to make transactions.

While these are the three main groups of fraudsters, there are others that the victim doesn’t know or has just met. Many phone scams target the elderly. One scares the victim by reporting that one of their relatives is being held ransom and needs money or they will be physically harmed. As outrageous as this may sound, it is a widespread ruse.

Another involves informing them of lottery winnings and all they have to do is wire enough funds over to cover the taxes. Wire and money transfer giant Western Union has joined the fight against such financial elder abuse.11 And of course, anyone calling from Nigeria asking from money should probably be ignored.

For those the elderly have just met, a red flag can go up when they speak extensively about this new acquaintance. These sweet heart scammers often prey on the lonely.12 And home repair workers often find the elderly easy prey. They promise work, get paid up-front and often leave before the job is done or provide shoddy work.

Help Fight Elder Financial Abuse

When an elderly person realizes they have been the victim of financial abuse they often become depressed and experience shame, fear and guilt. The abuse often forces the victims onto Medicaid because they are unable to recoup their losses without employment.

If you find these abuses as outrageous as we do, consider a career fighting fraud. Utica College offers a variety of degrees geared towards combatting financial crimes. These include an online Masters in Financial Crime and Compliance Management and an online MBA in Economic Crime and Fraud Management.

These advanced degrees are highly coveted in operations, compliance and fraud departments at most commercial banks. Depending on personal constraints, a Financial Crimes Certificate may be a more appropriate choice to get into this field or improve your skills sets for professionals already involved in fraud investigations and AML (anti-money laundering).

Fraud investigators are sometimes tasked with examining suspected elder financial abuse cases. If this route interests you, consider pursuing the CFE (Certified Fraud Examiner) financial designation. Other times, forensic accounting may be necessary to uncover the fraud.

The most important thing is that there is increased awareness of this type of fraud-with 10,000 Baby Boomers retiring daily, let’s hope so.




Elder Financial Abuse: A Cowardly Crime
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Elder Financial Abuse: A Cowardly Crime
Elder financial abuse is a despicable fraud that targets older members of our population. The abuse comes in many forms-both blatant and subtle.
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