Help an older adult avoid financial abuse

“Once I couldn’t drive anymore, I asked my daughter to help me with my banking and shopping. She said it would be easier if she could do my banking online. So I gave her my login. Last month, there wasn’t enough money in my account to cover my bills. That surprised me. I asked her about it, and she got angry and defensive. I’m not sure what to do.”

– Bert, Kelowna, BC

Financial abuse of older adults is most often carried out by someone they know and trust — a family member, friend, or care provider. It features someone misusing or trying to take what belongs to the older adult, such as their money or property. The most common cases are demands for money from family members and not repaying loans from the “bank of mom and dad.” Some involve misusing a power of attorney or misusing a joint bank account or jointly owned property.  

Often, complex family dynamics are in play. The victimized older adult might be financially supporting other family members. Or depending on their abuser for care or support. 

Often, financial abuse goes hand in hand with emotional abuse. The abuser may bully the older adult or manipulate them to get their money or other valuables. They might threaten to cut off contact with the older adult, or to restrict access to their grandchildren.

Yet many older adults are reluctant to report financial abuse. Among the reasons are:

• Shame and embarrassment. Many are ashamed to admit they’ve been financially abused by a member of their own family.

• Dependence or loyalty. Victims may be reluctant to report a family member or care provider who treats them well in other ways.

• Fear of retaliation. Some older adults might fear not being believed, or losing their independence by being declared incompetent and moved into a care facility.

• Lack of awareness. Some victims are unaware they’re being financially abused, or don’t know how to report it.

Financial abuse crosses social and economic boundaries. Any older adult can be at risk, regardless of their background, ethnicity, or financial status. (Mickey Rooney was a famous example.) But some conditions can make an older adult more vulnerable to financial abuse.

• Feeling socially isolated. An older adult who’s lonely and without a strong social circle is more at risk. Newcomers to Canada are particularly at risk, as language or cultural barriers may be in play.

• Dependence on others. If an older adult depends on a family member, care provider, or friend to help with financial matters, they’re more vulnerable to getting pressured for money or control of finances. They may be reluctant to report abuse, fearing retaliation by the abuser.

• Recent experience of loss. An older adult may be fragile and preoccupied due to grief from the loss of a spouse, family member, friend, or pet.

• A trusting disposition. A trusting and polite nature can increase the risk of financial abuse.

• Lack of confidence with finances. An older adult who lacks confidence in financial matters (perhaps they relied on a since-departed spouse) is more vulnerable to financial abuse. Here is a key indicator of confidence: how sure are they of the value of their key assets, such as their home?  

• Experiencing health issues. An older adult experiencing cognitive or physical issues is more at risk of being a victim of financial abuse.

• Lack of a clear care plan. Without a roadmap in place for their future care, older adults face the risk that others won’t respect their preferences and values. See below for how planning documents like a power of attorney and representation agreement give others a roadmap to help with decision-making.

Being aware of the signs of financial abuse can help you take steps to prevent it. Some common signs include:

• Unexplained withdrawals or charges. Unexplained withdrawals or transfers from the older adult’s bank account, or unauthorized charges on their credit card.

• Costly or unnecessary repairs or purchases. Older adults are more at risk of being overcharged for services, or charged for things they didn’t ask for.

• Bills are suddenly going unpaid or cash is short. If an older adult is uncharacteristically short of money or their bills aren’t getting paid, that may be a sign financial abuse could be involved.

• Things are missing. Items go missing from the older adult’s home, without explanation. Whether it’s a car or a keepsake, this can be a sign of financial abuse.

• Changes in demeanour or cleanliness. If there are changes in the older adult’s personality, hygiene, or self-care, or their home falls into a state of disrepair, these could indicate a disruption in their routine — possibly due to financial abuse.

• Sudden change to legal documents. If an older adult is being pressured to change their will, beneficiary designations, power of attorney, or other legal documents, that’s a red flag.

• New “best friend.” If the older adult has a new friend they’re opening up a joint bank account with, and this new friend has financial problems, that’s a big red flag. 

If you’re helping an older adult take steps to prevent financial abuse, these guiding principles provide some best practices. 

Ask them to tell you about their experience. Listen carefully. Honour their independence as much as possible. Work with them to identify steps and support networks that suit their values. 

The less money is handled, the less that can go wrong. It’s a good idea to set up direct deposit for government and pension cheques into the older adult’s bank account. And to set up auto-pay for as many bills as feasible. Doing so can help prevent bad actors from intercepting funds and misusing them.

Support the older adult in practising good money-management habits: 

• keep financial and personal information in a safe place

• review all banking and credit card statements

• never give anyone their bank card PIN

• order a credit report periodically to make sure nothing unusual shows up in their credit history (which can be a sign of financial abuse or identity theft)

An older adult experiencing cognitive or physical issues is more at risk of financial abuse. Putting planning documents in place can help protect them.

Key planning documents for financial matters

With an enduring power of attorney, they can appoint a trusted person to help with financial and legal matters. 

If they need help now and don’t have the legal capacity to make a power of attorney, they may be able to make a standard representation agreement. This allows a trusted person to help with routine financial matters as well as with health care and personal care decisions. As explained here, this type of representation agreement might spell out how the older adult can be supported in their decision making.

Another option is a pension trusteeship. This allows a trusted person to receive and administer the pension benefits of an older adult. For the federal government’s income security programs Old Age Security and Canada Pension Plan, the pension trustee application form is on the Service Canada website. 

Managing the risk planning documents introduce

Planning documents like these give others a roadmap to follow to support an older adult and carry out their wishes. But they also introduce some risk. A power of attorney, in the wrong hands, can be a “licence to steal.” The attorney can literally bankrupt the older adult.

So it’s key that in choosing an attorney, representative, or pension trustee, the older adult chooses someone they trust deeply, someone they trust to carry out their wishes.

One approach is to appoint more than one person to share the role, so they keep an eye on each other. 

With a representation agreement with financial powers or a power of attorney, another approach is to appoint a monitor. This is someone who oversees the actions of the representative or attorney to ensure they’re doing the job properly. 

If an older adult is feeling pressured to give money to someone or sign a document, urge them to ask for help. It’s critical they get independent legal advice before signing any documents, especially those involving their home or other property. For options for legal advice, see below under who can help.

If the older adult does decide to give money or other property to someone, document their intentions. For example, if they intend to lend money, they should make a loan agreement. This can make the terms of the loan clear and easier to enforce. Here’s a template loan agreement. At the very least, they should consider having the person sign a promissory note with repayment terms. Here’s a template promissory note.

Support the older adult in keeping in touch with a variety of friends and family so they don’t become isolated.