Elder Financial Abuse, Private Wealth – What Are You Doing to Protect Yourself?


Burgandy Basulto is a Content Writer at NAWRB. She has a bachelor’s degree in both English and Philosophy, and a master’s degree in Philosophy. When she’s not reading or writing, she loves running, kickboxing, watching films, trying new restaurants she finds via Yelp, and experiencing other cultures during her travels.

Elder financial abuse is a growing problem, leaving destroyed relationships and economic destruction in its wake.  From straightforward theft to slow development through complex relationships, the tremendous loss of wealth incurred by senior citizens results in premature deaths and intergenerational loss of wealth. It ultimately rips at the fabric of society as a whole as trust among family members and faith in financial institutions are destroyed. 

The aging population at all levels of socioeconomic status is vulnerable to elder financial abuse, from those under the poverty level to those who hold significant private wealth. This is an important issue that family offices and other industries should be aware of and defend against. Join the discussion at the upcoming 2019 NAWRB Conference on Aug 4th-6th in Pasadena, CA, as industry experts address this issue and more affecting the economic ecosystem. 

Elder Financial Abuse: General Characteristics 

Most victims of elder financial abuse are between the ages of 80 and 89, and they require support for day-to-day activities. Women are almost twice as likely to be victims of financial abuse compared to older men. This might be because older women are more likely to live alone and require more assistance in daily living for a longer term. 

Perpetrators of elder financial abuse typically include family members; paid home care workers; financial advisors; legal guardians; or strangers who defraud older adults via mail, telephone or internet scams. Examples of elder financial exploitation, as outlined by the U.S. Securities and Exchange Commission’s Office of the Investor Advocate, include

  • Stealing an older adult’s cash; 
  • Withdrawing money from a victim’s account; 
  • Cashing a victim’s checks or using his or her credit card without authorization; 
  • Transferring property deeds; misusing power of attorney; and identity theft. 

Global Stats

  • According to the World Health Organization (WHO), 15.7 percent of people 60 years and older experience abuse
  • Only 4 percent of instances of elder financial abuse are reported.
  •  Over $36.5 billion a year is estimated to be lost annually in the U.S. due to elder financial abuse, fraud or scams. 
  • Ninety percent of abusers are family members.
  • The aging population is increasing rapidly in countries across the globe, and only 40 percent of countries have a national plan in place to address elder abuse.

Elder Financial Abuse in the United States 

In February 2018, the United States Justice Department indicted 250 people around the world on elder fraud and financial abuse whose crimes resulted in losses of more than a half-billion dollars from over a million victims. It was the largest coordinated sweep of its kind in U.S. history.

According to a 2011 Government Accountability Office (GAO ) study, approximately 14.1 percent of adults age 60 and older in the United States have experienced some kind of physical, psychological or sexual abuse; potential neglect; or financial exploitation in the past year. While all of these scams are important to address, the focus of our report is on elder financial abuse, which is the financial exploitation of seniors through the illegal or improper use of their funds, property or assets. 

In a study published last year by the American Journal of Public Health, David Burnes, Ph.D., and a team of researchers conducted a meta-analysis of financial fraud and scams among older adults in the U.S. concluding that 1 in 18 “cognitively intact, community-dwelling” older adults each year is affected by financial fraud.

Cognitive Decline a Risk Factor 

The older population is particularly vulnerable to financial exploitation because their ability to make financial decisions can become impaired with age, so they might rely on others they trust to help with the decision-making. Global research on elder abuse has linked high rates of mistreatment from dementia caregivers or have listed cognitive impairment as a high risk factor for financial abuse.

Cognitive decline is a key factor that makes the aging population susceptible to elder financial exploitation, according to the Elder Financial Exploitation 2018 report by the U.S. Securities and Exchange Commission’s Office of the Investor Advocate. The aging brain is marked by a decline in fluid intelligence, while crystalline intelligence usually remains intact or increases. 

Fluid intelligence in financial terms, the report explains, “refers to the ability to manipulate and transform financial data,” and it is generally associated with the capacity to hold multiple distinct pieces of information in one’s mind. Crystallized intelligence, in contrast, refers to a person’s store of knowledge and “involves knowledge and experience with financial products.” 

With a decline in fluid intelligence, older adults are likely to experience a decreased ability to manage money and make financial decisions. However, this decline might be offset by greater financial knowledge and experience from increased crystallized intelligence. However, their store of financial knowledge still leaves them vulnerable to deception and scams as their ability to judge riskiness or trustworthiness is diminished. This type of cognitive impairment might be caused by different brain diseases, including Alzheimer’s disease, other types of dementia and mild cognitive impairment (MCI). 

There are few options for protecting older Americans from financial abuse. As family members are often the perpetrators, victims who have had their assets stolen are less inclined to want their relatives or loved ones to be criminally prosecuted. In these cases, civil actions are a common route for recovering stolen assets. 

Unfortunately, few civil attorneys are trained in issues related to older victims of financial abuse. Stolen assets from older victims are rarely recovered, which affects their ability to support and care for themselves. Therefore, the burden falls on different state and federal programs to care for older adults who are exploited. 


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