Judith Davey (updated from posts published by Age Concern in 2014)
20/5/21
Financial abuse, along with and often combined with psychological abuse, is the most common form of elder abuse and it is rising. The World Health Organisation defines financial elder abuse (FEA) as:
The illegal or improper exploitation or use of funds or resources of the older person.
This sits within the generally accepted definition of elder abuse:
Any act or omission that results in harm to an older person which occurs in a relationship where there is an implication of trust.
How far should this “implication of trust” extend? Does FEA include stealing or defrauding older people of their goods and/or property? In this case it would include scams and fraud and even burglary and mugging. Should FEA be seen as a crime, i.e. against the law? Are there situations when financial abuse is not a crime, for example when family members use assets as joint property?
There can also be problems when people are acting on an older person’s behalf – an enduring power of attorney for example. Should family members and carers keep up an older person’s charitable donations, which will use up assets? What about intent? Does unwise or poor financial management by a family member constitute financial abuse?
Should age be part of the definition of financial abuse at all? Don’t all people need protection from having their money and assets stolen or misused? Are older people in need of special protection? Laws and policies aimed specifically at them could be seen as paternalistic and discriminatory.
Clearly, financial abuse is a complex issue. It involves a range of perpetrators – family members, caregivers, professional advisers and commercial agents. It takes place in different settings – private homes, residential care and also in wider society as older people have contact with banks, financial advisers and a multiplicity of financial and social services.
Why is FEA important?
Financial elder abuse may lead to a permanent loss of financial security and even be life-threatening. It has been linked to depression, psychological harm and declining physical health. The result can be higher levels of dependence and an increased need for care.
In psychological terms, FEA may increase fear and lack of trust. Older people may lose faith in their family members or service providers, even if this is unwarranted. FEA threatens the dignity and human rights of elders.
Older people may not have the ability or opportunity to recoup income and assets lost through FEA. The services to protect victims are not well developed. Recognition of FEA is a comparatively “new” issue, but it is hard to ignore its importance.
Why does financial elder abuse occur?
There are a range of explanations.
Elder abuse of all types has been associated with older people’s relatively low status in society and lack of economic power, making them vulnerable, especially older women. Abuse occurs when people simply do not recognise that older people are entitled to control their own money and assets and to use them as they think fit.
Cultural differences may influence whether FEA is recognised, for example whether a child should return money borrowed from a parent. An Australian study compared views from the Greek and the Vietnamese communities[1]. They differed in how important self-reliance and independence should be for older people. In some cultures, the family unit is given a higher value than the individual. How assets are allocated is a family matter. The researchers concluded; “What in some cultures is a reflection of tradition and established practice in others is deemed to be financial abuse.”
In another view, FEA is seen as an opportunistic crime, which occurs in everyday activities. It is common for families to manage older people’s financial affairs, from everyday shopping to substantial investments. This provides the opportunity and the temptation.
There can also be a sense of entitlement. Family members may think that, as they will, or should, inherit an asset eventually, they might as well get the benefit sooner rather than later. This is aptly called ‘inheritance impatience’. Family members may try to protect “their” inheritance by not incurring expenses even though they are necessary for the health and well-being of the older person.
As well as inheritance expectations, family abusers may feel that they should be paid for care giving. There may even be an element of “settling old scores”, Where family members have been abused in the past by people who are now vulnerable, they may take advantage of this. There may be an element of blackmail, as in examples where older people are threatened with not seeing their grandchildren if they do not provide money or property. In other cases, companionship or assistance may be withheld.
FEA may be triggered by the perpetrators’ problems, such as financial or social stress, gambling problems, drug and alcohol abuse. The abusers may simply not understand their obligations. Under a Power of Attorney they are required to act in the best interests of the donor and not for personal benefit; and to keep the donor’s funds and property separate from their own.
Many would suggest that the motive is simply greed (Peri et al. 2007, p.40).
I had been giving her $50 each week and then when I came in here [residential care] she took everything. She robbed me of my money and sold all my possessions (older woman).[2]
How does FEA differ from other forms of EA and family violence?
“Financial exploitation” or “coercion” are terms which help to distinguish the attitudes and practices which constitute FEA. Some commentators suggest that FEA is more opportunistic than other forms of elder abuse, while others argue the opposite, that it is more often planned. Some say that it is motivated simply by greed, rather than the interpersonal dynamics that promote other kinds of abuse. There may be a fine line between coercion and genuine willingness for older people to help out family members.
Unlike most other forms of abuse, FEA can be perpetrated remotely. Several of its forms require access only to the assets, not the person. Because financial transactions are often recorded, for example in bank records, FEA may be potentially easier to detect.
On the other hand, there are some similarities to domestic violence. Some FEA involves the abuse of power and control, as in other forms of domestic violence. When FEA occurs, an older person may fear that telling someone will lead to the loss of the relationship, possible retaliation, or further loss of independence. They may be reluctant to believe that a trusted person is exploiting them. They may not want the abuser to get into trouble, although they do want the abuse to stop. As with other abuse victims, they may fear that they will not be believed.
[1] Wainer, J., Owada, K., Lowndes, G. and Darzins, P. (2010) Diversity and financial elder abuse in Victoria. Protecting Elders Assets Study, Monash University, Melbourne.
[2] Peri, K., Fanslow, J., Hand, J. and Parsons, J. (January 2008) Elder abuse and neglect: Exploration of risk and protective factors. NZ Families Commission, Wellington.
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