Written By: Krista Kretzschmar, CFP®
In 2006, World Elder Abuse Awareness Day (WEAAD) was established by the International Network for the Prevention of Elder Abuse and the World Health Organization at the United Nations to provide an opportunity for communities around the world to promote a better understanding of abuse, neglect, and financial exploitation of older adults. WEAAD is observed annually on June 15th.
We often think of abuse as strictly physical or emotional, but it can also be in the form of financial exploitation. As an AFC® professional, you are in a unique position to potentially identify signs of abuse, neglect, and financial exploitation. When you meet with clients, they will likely share more information with you than they would with others because they trust you. Financial professionals tend to learn a lot about their clients’ lives when developing comprehensive financial plans. Look and listen for the following red flags of abuse and neglect:
- Appears to have fractures, bruises, cuts, or burns
- Hesitates to make eye contact or talk openly
- Appears to be sad or withdrawn
- Avoids contact or conversation
- Seems reluctant to talk about their home life
- Appears to be intimidated or coerced by caregivers, family members, or others
- Shows signs of dehydration or malnourishment
- Exhibits improper hygiene (poor grooming, soiled clothing, disheveled appearance, etc.)
- Appears to have improperly cared for wounds
- Appears to be confused or forgetful
- Seems to have inadequate food, shelter, and clothing
- Resides in an unsafe environment
- Uses medications inappropriately
As an AFC® professional, you may notice financial abuse more readily than other forms of abuse. Financial abuse is often referred to as financial exploitation. Financial exploitation occurs when a person illegally or unethically takes advantage of another for their own profit or advantage. You will be privy to financial information that may indicate your client is being financially exploited. Take notice of the following red flags associated with financial exploitation:
- Third-party has an unusual interest in the adult’s finances
- Unusual or inconsistent account activity (large or frequent withdrawals or wire transfer requests, increase in transaction activity, etc.)
- Unexpected or frequent changes in legal documentation (power of attorney documents, wills, property titles, deeds, etc.)
- Unexpected changes in beneficiary designations
- Complaints of money or objects missing from home
- Changes in attitude toward money
- Caregiver demonstrates control over money but is failing to provide for older adult’s needs
Identifying the red flags is not enough as most states now have reporting requirements. Familiarize yourself with your organization’s reporting requirements. If you work for a financial institution, you likely have reporting procedures in place. At State Employees’ Credit Union (SECU), we have a centralized reporting process where branch and operations personnel report suspicious situations to an internal department, which in turn gathers needed information and reports to the appropriate authorities (law enforcement and/or Adult Protective Services (APS). SECU is solely based in North Carolina and follows North Carolina reporting mandates which require financial institutions to report suspected financial exploitation to law enforcement and/or APS. It is important to know what, and to whom, you can disclose confidential client information. You do not want to breach client confidentiality or financial privacy laws. In North Carolina, the law provides “safe harbor” (statutory protection from liability for releasing personal or private financial information) when reporting suspected financial exploitation to the proper authorities.
Financial exploitation of older adults is becoming more prevalent in our society and educating your clients on the warning signs will help them protect themselves. Exploitation may be committed by a stranger or a person in a position of trust, like an in-home caregiver, friend, or family member. Unfortunately, exploitation can happen to anyone, but sharing these tips with your clients may lessen their likelihood of becoming a victim:
- Avoid providing personal information such as account or card numbers over the phone or through email
- Monitor financial activity on accounts closely, and balance checkbooks regularly
- Review your credit report, at least annually, to ensure all information has been reported accurately (credit reports can be requested, at no cost, once per year at https://www.annualcreditreport.com/index.action)
- Carefully review all contracts and legal documents
- Use direct deposit whenever possible to avoid theft of paper checks
- Ensure your personal computer is equipped with adequate security software
- Trust your instincts and be aware of any red flags
- Choose a trusted person to assist you with handling your finances in advance of any mental or physical incapacity by executing a power of attorney document (a proactive estate planning tool used to designate a person as your agent and outline appropriate powers granted to them)
Finally, as you work with aging clients:
- Be proactive by talking to clients about their situation and offering assistance and services.
- Be aware by looking for red flags of abuse, neglect, and financial exploitation.
- Be knowledgeable by knowing your reporting requirements.
- Raise elder abuse awareness by educating your clients and peers.