What Is Financial Abuse?
A form of mistreatment and fraud in which someone forcibly controls another person’s money or other assets. Some examples are:
- Stealing cash
- Not allowing a victim to take part in any financial decisions or preventing a victim from having a job
- Email scams
- Get-rich-quick/Ponzi scheme scam
- Telemarketing scam
- Door-to-door scam
- Charity scam
- Work-at-home scam
- Advance fee loan scam
- Rental property scam
- Withdrawn or depression signs in a victim
- Suffering of physical appearance and hygiene in a victim
- Victim cannot make decisions about money with confidence
- Discrepancies or unusual transactions on bank records
- Sudden changes in feelings for a particular person
- Increased use of alcohol or other substances
- The abuser is often around
Effects of financial abuse:
- Serious monetary instability
- Quality of living for the victim often suffers
- The victim feels embarrassed
- Stress, either from the abuser’s words or direct actions or from the aftereffects of those circumstances, such as not being able to make a mortgage payment
- The effects can trickle down to others as well. For example:
- If someone convinces a senior citizen to sign over his home, that property cannot be given as an inheritance
- Loved ones might have to work at “cleaning up” the financial mess long after the control stops
- If courts need to get involved, this potentially can take years to complete and may require the individual who steps in to put some of his or her own money toward resolution
Who Are The Victims?
- Involves someone targeting an older adult, often a parent or other close relative, in the hope of being allowed access to his or her financial information.
- An abuser might act as though he or she is simply helping manage the senior’s finances, but instead, he or she takes the money for himself.
- An abuser might convince an elderly person to sign legal financial documents or getting the victim to change the mailing address on bills and other records.
- Abuser sees individual who is disabled or lonely as an easy target
- Adult children might feel they are entitled to their parents’ wealth
- Abuse is seeking revenge for a poor relationship or prior bad experiences
- Occur in marriages as a means to have control over a partner in order to make him or her feel hopeless enough to never leave.
- One partner might not allow the other to have access to any of the household money, or the abuser may only give a small allowance
- Abuser might confiscate the victim’s debit/credit cards or other means of personal funds
- Abuser might force/convince a spouse to quit his or her job or cause disruptions in the workplace to get the victim fired
- One partner purposefully accumulates large amounts of debt using joint checking or credit accounts
- A majority of parents are legally able to handle money issues for their minor children, so these cases frequently go unreported.
- The motivation may be to keep the child from leaving or to keep control over the young adult’s action
- The parent might willfully avoid teaching the child how to manage his funds, or he might take money the child and other relatives have set aside for things like college, having no intent to pay it back.
- The abuser may light about the stealing and say he or she is investing the money on the minor’s behalf
- The abuser may take care of a money-related issue but purposefully not discuss the issue with the young adult
- The parent usually says he’s just trying to make things easier or be nice, but by beating the child to the financial punch, he is essentially controlling what a child acquires or does.
- When the child tries to assert more independence, the abuser makes him feel guilty, saying that he is unappreciative or ungrateful not only for the financial “help,” but for everything else.
- The abuser preys on the other individual’s fear of loneliness or need for true help
- Abuser may say he or she will not be friends or provide the victim with assistance without access to financial information
- Guilt the victim into loaning money by saying a true friend would loan money
- Might repeatedly”forget” his cash or credit cards when out, forcing the friend to pick up the tab and then never repaying him
Preventing Financial Abuse
- Stay involved in a circle of friends or social groups so that a network is available for help
- Insist on opening your own mail and having access to all financial records
- Use direct deposit and automatic bill payments
- Apply a rule of three: Anytime a person needs to discuss money have at least two other trusted people participate in the conversation
- Record financial meetings to keep track of what happened during each meeting or discussion
Reporting Financial Abuse
- Contact local authorities, such as the victim’s bank and the police department, as well as an attorney.
- Make reports to other agencies, such as the National Center for Elder Abuse or Adult Protective Services
- Obtain any documentation of the abuse if possible. A complaint usually has a better result if the filer has some documentation to support the claims.
- Consumer Financial Protection Bureau
- Consumer Protection
- FBI Internet Crime Complaint Center (IC3)
- National Fraud Information Hotline
- Seniors Against Investment Fraud (SAIF)
- Social Security Admin Fraud Hotline
- U.S. Postal Inspector Website