There are formal ways of protecting older people through government regulation and legal sanctions, but we might do better by raising awareness of financial elder abuse (FEA) and its effects, throughout society.
Education and awareness
Starting at the broadest level, much more needs to be done to challenge ageism and negative attitudes to older people and their assets – treating older people with dignity and respect should mean the elimination of abuse. Government action in this area would be consistent with its Positive Ageing Strategy.
Older people themselves
Older people can protect themselves against FEA by organising their financial affairs well, taking responsibility for them as much as possible; staying informed and knowing where to go for help. Increasing financial literacy for older people could be a very useful preventive strategy. There would be limitations, of course, for people who are losing cognitive capacity. In New Zealand, financial literacy resources appear to give priority to the needs of younger people with few services aimed at older people.
Role of Families
We also need education on managing the finances of older people in a non-abusive way. This concerns family members, but also service providers. An Australia study found that police checks relating to murder and assault are needed for people working with older people, but these do not extend to fraud, extortion, blackmail and robbery.
Families can be alert for signs of financial abuse, such as unexplained cash withdrawals, unusual signatures or missing belongings. Family agreements can set out arrangements between older people and their adult children about sharing property, loaning or gifting money, and sometimes about care in return for these. At the moment these are mainly informal and/or verbal, which may limit their usefulness. Keeping full records of all transactions and making sure they are accessible can also reduce the opportunities for FEA. Family members may need support; financial management for older people, especially those with cognitive impairment, can be onerous and time-consuming.
Measures to increase awareness of FEA among case managers, GPs, police, residential care workers, solicitors, social workers and nurses would be helpful. But also among the staff of banks, legal firms, insurance, loan and investment companies. Banks, in particular, often deal with older customers on a regular basis and get to know them well. They could track unusual activity in accounts and intervene in such instances. The challenge here is to balance the responsibility to protect the safety of the older customers with the elders’ right to privacy and self-determination. Some residential care facilities offer residents a managed account for their personal allowances from superannuation to protect the funds from abuse by family members or others. Other service providers who could be on the look out for FEA are home support providers and befriending services.
Better consumer protection
In addition to formal regulations and requirements, legal and financial service organisations need to ensure that investors understand the products and services that they offer. Older people have been taken in by unscrupulous advisers. They may be vulnerable to a “hard sell” and bemused by technical complexity. Their values, such as respect for “authority” may hold them back from asking questions and asserting their rights as consumers.
This means that all information should be presented in plain language which is easy for non-specialists to understand; that consumers know how to make complaints and are fully informed of their rights; that there are full and accessible records of all transactions; and that the credentials and “track record” of financial advisers are made clear, as well as fee structures and potential conflicts of interest.
Do older people require special protection against financial abuse over and above what is available to everyone? Is it enough to protect all adults unable to make their own decisions because of mental or physical disability? Should statutory agencies have the powers to investigate and intervene in abusive situations and apply legal penalties? In New Zealand we have the enduring power of attorney (EPA) mechanism and the Protection of Personal and Property Rights (PPPR) Act 1988. This Act 1988 was amended in 2008 in response to concerns about financial elder abuse through the misuse of EPAs.
Next – What can we do when financial abuse happens?