Elder abuse: financial abuse of older people

Financial abuse of older people is a serious and often hidden problem with devastating consequences.

Top 3 messages about financial elder abuse:

1. The consequences of financial abuse can be devastating for older people, causing ongoing financial loss, housing insecurity, unmet needs and lost wellbeing.

2. Factors contributing to an older person’s risk of financial abuse include isolation, dependence on others, low financial literacy, family dynamics and cultural or linguistic barriers.

3. Warning signs include bank statements showing strange transactions or not arriving, feelings of being under pressure from others, demands to change your will or lend money, and unpaid or unrecognised bill notices.

Financial abuse – the theft or misuse of a person’s money or assets – can happen to anyone, but older people are particularly at risk. When it happens, the consequences can be devastating. It can cause ongoing financial insecurity, broken relationships of trust, loss of confidence and self-esteem, and diminished wellbeing and quality of life.

It can be hard to recognise what’s happening and harder to work out what to do about it. Understanding what financial abuse is, why and how it happens, and where to get help is important for our financial security.

What is financial abuse of older people?

Financial abuse is the control, misuse or theft of a person’s money, property or assets. When older people experience financial abuse, it affects their financial security and autonomy.

Sadly, the abuser is often someone the older person should be able to trust – most commonly, but not always, an adult child. Financial abuse can happen without the older person’s knowledge – and often, it isn’t technically illegal. But it’s still wrong, because the older person experiences harm or loss, usually with severe consequences.

Examples of financial elder abuse

Financial elder abuse can take many forms – for example:

• misusing or stealing your money, property or assets

• withdrawing your money without permission

• controlling your access to your own money

• making financial decisions for you without your consent

• doing your shopping but keeping the change

• selling your home or belongings without consent

• not repaying loans

• not contributing to household expenses

• misusing powers of attorney

• pressuring you into giving or loaning money, possessions or property

• pressuring you to make or change your will

• taking advantage of resource sharing within families and communities

• acting with ‘inheritance impatience’

• emotionally manipulating you into agreements you don’t want to make

Account access: Francesa’s story[i]

Francesca, in her 60s, preferred to do her banking in person, but during COVID she had trouble accessing the bank branch. She gave her daughter signing rights to her account so she could help Francesca with banking. However, the daughter soon withdrew all Francesca’s money.

The bank had no grounds to recover the funds as the daughter was a signatory on the account. Francesca was left destitute, living in her car or sleeping on friends’ couches.

The effects of financial elder abuse

Financial abuse affects older people in ways that go far beyond the immediate loss of the money or assets. It can leave them unable to buy food, pay bills or cover medical care, and housing can become insecure. And these difficulties can continue long after the abuse stops.

The effects can be emotional and psychological, too. They may feel anxious about the future, confused, betrayed and powerless. Many older people who experience financial abuse feel shame, guilt or embarrassment about what happened, and some withdraw from social contact, leaving them isolated. Such feelings can make it harder to get help, and their already damaged wellbeing becomes worse.

How does financial elder abuse happen?

Like all forms of elder abuse, financial abuse is a complex issue. In many cases, the abuser’s circumstances play a large part – for example, an adult child with their own financial difficulties develops inheritance impatience, a sense of entitlement to their parents’ money. Substance addictions, relationship breakdowns, domestic violence and job losses can be reasons behind the behaviours (but they are no excuse for it).

Multiple factors may contribute to an older person’s risk of experiencing financial abuse:

• Lack of financial knowledge or involvement – factors can include low digital literacy, low numeracy skills or traditional views of money management being a gender-based activity

• Lack of rights or abuse awareness – people may not even question others’ poor behaviour

• Cognitive decline or reduced independence – needing to rely on others may leave an older person vulnerable

• Isolation – a limited social circle means fewer people who can notice what’s happening and intervene

• Limited access to financial services and advice – for example, in rural and regional areas, there may no longer be any banks or financial advisers to consult

• Cultural practices and linguistic barriers – older people being traditionally expected to hand over financial management to adult children, or language barriers making money management difficult

Why financial abuse can be hard to see

One reason financial elder abuse may go undetected is that it often happens in relationships of trust – the people who most commonly commit financial elder abuse are adult children. The older person may not speak up because of family dynamics, confusion, loyalty or cultural factors, and people outside the situation may not have opportunities to see what’s happening.

The abuse can also be subtle. An adult child moving into the parental home for a while may not seem strange, but if they don’t contribute to expenses, it could be unseen financial abuse.

Commons signs of financial elder abuse

If you’re an older person, or you support an older person, look out for signs that something is wrong. These could include:

• changes on bank statements such as withdrawals you don’t remember making, larger payments or withdrawals than usual, vendors you don’t recognise

• feelings of pressure from someone to sign a document, change your will, agree to lend money or be a guarantor, or do something you don’t understand

• forged or forgotten signatures on documents you don’t remember signing

• statements and documents not arriving

• notices of unpaid bills when you’re sure you have sufficient funds

• feeling stopped from managing your own money or being suddenly unable to log in to your bank account online

• notices of bills or debts you haven’t authorised or don’t remember signing up for.

Find out more about how to spot financial elder abuse in our article, ‘Warning signs of financial elder abuse’

How to respond to possible financial elder abuse

If you realise that you (or someone you know) may be experiencing financial abuse, speak up. There are steps you can take and people you can turn to.

• Contact your bank straight away. Bank staff may be able to pause suspicious transactions, set limits on transactions or help you understand what should and shouldn’t be happening to your money. They can also store a copy of your enduring power of attorney so they can check what you have authorised.

• Talk about what’s happening. Share your concerns with someone outside the situation and get their perspective. Maybe you’re not imagining things, after all.

• Talk to the person who’s causing the problem. They may not realise the impact their actions are having. Only try this if you feel safe and comfortable doing it – it may be helpful to have someone else with you during the conversation.

• Contact 1800 ELDERHelp on 1800 353 374. This Australian Government service will redirect your call to a phone line service in your state or territory, where you can talk to someone for help and advice.

• Contact support services for advice, information and referrals to specialist help. Try our Find a service provider directory.

• Get legal advice. Talk to a lawyer, community legal centre or Legal Aid service near you. Find out about your rights and what the law can do to help you.

• Break contact with the person causing the abuse. This can be difficult – particularly in a family situation – so you may need outside help with this.

Stopping the abuse: Dot’s story

Dot, who had dementia, gave financial power of attorney to her son Ted when she went into a nursing home. Ted invested $200,000 of her savings, the balance of the sale of her home.

Dot’s daughter Susan suspected that Ted had used this money to pay his own mortgage when he lost his job. When Susan confronted him, he admitted to this misuse of Dot’s money, but as he was now bankrupt, any equity in his home had to go to the Trustee in Bankruptcy.

Susan went to the police, who didn’t classify Ted’s actions as theft, a criminal matter, because they considered it a civil matter. Although it would be simple to prove that Ted had taken the money in breach of his duty as an attorney, civil proceedings could have been very drawn-out and expensive, and Ted would have been unable to repay the amount taken, anyway.

Instead, Susan took the matter to the Civil and Administrative Tribunal in her state, which appointed her as Dot’s attorney instead of Ted to prevent any further misuse.

Preventing financial abuse of older people

Stopping financial abuse of older people when it happens is important, but preventing it from happening (or minimising our chances of experiencing it) is even better. What can we do to protect ourselves or others?

• Increase our own awareness and understanding of the issue. Find and read information such as your bank’s resources, seniors association newsletters, digital literacy programs and government advice.

• Seek professional advice before making financial arrangements and decisions. Talking to a financial adviser, lawyer or banking staff can help make sure you don’t compromise your financial security.

• Set up safeguarding documents such as an enduring power of attorney, with advice from a solicitor or community legal centre.

• Actively manage your personal financial security. Change online banking passwords regularly, monitor your bank statements, and query transactions you don’t recognise.

• Communicate clearly with family on financial matters: repayment expectations on money you lend them, your intentions for your estate, whether something is a gift or a loan.

• Access family mediation if your family is experiencing relationship, finance or communication difficulties. Mediation can help you have tough conversations and settle disagreements while looking after your rights and safety.

• Stay connected and engaged with other people. Isolation can be a significant factor in your vulnerability to financial abuse, so stay in active contact with family, friends and people in your community.

Find out more

• Advocare, ‘Protecting your finances’ (PDF tipsheet, 436KB)

• Australian Banking Association, 2019, ‘Safe and savvy: a guide to help older people avoid abuse, scams and fraud’ (PDF booklet, 1.4MB)

• Compass, ‘Protecting yourself from financial abuse’ (web article)

• Compass, Financial abuse (topic area)

• Financial Services Council, 2019, ‘The FSC guide to the prevention of elder financial abuse’ (PDF booklet, 965KB)

• National Seniors Australia, 2022, ‘Scams and financial abuse update: snapshots from National Seniors Australia’ (PDF report, 622KB)