Elder Financial Abuse: The $28 Billion Crime Nobody Reports

Types of Elder Financial Abuse

Theft and embezzlement. The most straightforward form: someone steals money, jewelry, or other valuables from an older adult. This includes a caregiver pocketing cash, a family member using the elder's credit card, or an aide making unauthorized ATM withdrawals.

Power of attorney abuse. An agent named under a power of attorney uses the elder's assets for their own benefit — paying their own bills, transferring property to themselves, or making gifts to themselves or their family members. Because the POA gives the agent legal authority to act, the abuse can be difficult to detect and even harder to prove.

Coerced changes to estate documents. An abuser pressures an older adult to change their will, trust, or beneficiary designations to benefit the abuser. This may involve threats, manipulation, or simply taking advantage of the elder's confusion or dependence. Undue influence is one of the most common grounds for contesting a will after death.

Scams and fraud. Phone scams, internet fraud, romance scams, and investment fraud disproportionately target older adults. The FBI's Internet Crime Complaint Center reported that Americans over 60 lost $3.4 billion to online fraud in 2023 alone — the highest loss of any age group.

Real estate fraud. An abuser convinces an older adult to sign a deed transferring their home, or forges the elder's signature on real estate documents. Reverse mortgage fraud — where a scammer uses a reverse mortgage to strip equity from the elder's home — is a growing problem.

Warning Signs

Elder financial abuse often leaves a trail if family members know what to look for. Common warning signs include:

Unexplained or unusual withdrawals, wire transfers, or charges. Sudden changes to a will, trust, beneficiary designation, or power of attorney. Unpaid bills, utility shutoffs, or eviction notices despite adequate income. A new "best friend," caregiver, or companion who isolates the elder from family. Missing valuables, jewelry, or household items. Signatures on checks or documents that do not look like the elder's handwriting. The elder expresses confusion about their financial situation or fear of a specific person.

Any one of these signs warrants investigation. Multiple signs together should trigger immediate action.

Power of Attorney Abuse: The Insider Threat

A durable power of attorney is one of the most important estate planning documents — but it is also one of the most commonly abused. The agent has legal authority to manage the elder's finances, and in many states, there is no automatic oversight of how the agent uses that authority.

POA abuse typically looks like this: the agent pays their own mortgage from the elder's account, transfers the elder's investment accounts to themselves, uses the elder's credit card for personal purchases, or makes large "gifts" to themselves and claims the elder authorized them.

The POA document itself can include safeguards. It can require the agent to keep records, limit the agent's gifting authority, require co-signatures for transactions above a certain amount, or name a second person to receive copies of account statements. These provisions do not prevent abuse entirely, but they create accountability and make abuse easier to detect.

Prevention Strategies

Choose the right agent. The most important prevention step is naming a trustworthy, competent agent in the power of attorney. This should be someone with good financial judgment, no history of financial problems, and no conflicts of interest.

Add oversight to the POA. Include provisions requiring the agent to keep records, provide periodic accountings to a named family member or advisor, and limit the agent's authority for large transactions.

Use a trust with a co-trustee. A revocable living trust can name a co-trustee or a trust protector — an independent third party who can monitor transactions, remove a trustee, and intervene if abuse is suspected. This adds a layer of oversight that a POA alone does not provide.

Maintain regular contact. Isolation is the abuser's most powerful tool. Family members who maintain regular contact — visiting, calling, reviewing mail and financial statements — are far more likely to detect abuse early.

Monitor financial accounts. Set up account alerts for large withdrawals or transfers. Review bank and credit card statements monthly. Check the elder's credit report annually for unauthorized accounts or inquiries.

How to Report Elder Financial Abuse

If elder financial abuse is suspected, report it immediately. Every state has an Adult Protective Services (APS) agency that investigates reports of elder abuse. The Eldercare Locator (1-800-677-1116) can connect callers with their local APS office.

If the abuse involves a crime — theft, forgery, fraud — report it to local law enforcement. If the abuse involves a financial institution, report it to the institution's fraud department and to the Consumer Financial Protection Bureau (CFPB). If the abuse involves a licensed professional — an attorney, financial advisor, or healthcare worker — report it to the relevant licensing board.

Many states have mandatory reporting laws that require certain professionals — including bankers, healthcare workers, long-term care staff, and in some states, attorneys and financial advisors — to report suspected elder abuse. Failure to report can result in penalties.

The Bottom Line

Elder financial abuse is a $28 billion problem that affects one in 10 Americans over the age of 60. It is perpetrated by trusted insiders more often than by strangers, and it thrives on isolation, confusion, and lack of oversight. Prevention starts with choosing the right agents, building accountability into estate planning documents, maintaining regular family contact, and monitoring financial accounts. When abuse is suspected, immediate reporting to Adult Protective Services and law enforcement is essential. The crime is too common to ignore and too costly to leave unreported.