What is financial abuse?
There are a number of definitions of what constitutes financial abuse of older people.
The World Health Organisation defines (PDF) financial abuse of an older person as:
'"The illegal or improper exploitation or use of funds or other resources of the older person".
The definition includes acts with adverse outcomes committed not only by people known to and trusted by the victim, but also acts perpetrated by strangers and by institutions.
In Australia, the Queensland-based Elder Abuse Prevention Unit (EAPU) founded by UnitingCare defines financial abuse as:
"The illegal or improper use of a person's finances or property by another person with whom they have a relationship implying trust".
The UnitingCare definition has been quoted in their publications by a number of other agencies, including the Victorian Department of Human Services and Senior Rights Victoria.
Abuse may be intentional or unintentional. Intentional financial abuse is defined in the Protecting Elders’ Assets Study (PDF) conducted by Monash University in 2009, as “the separation of a person from the benefit of their assets for the benefit of another, involving deliberate intention”. Unintended abuse is “the inadvertent or uninformed financial mismanagement or neglect of financial assets which causes the deprivation of benefits to be derived from those assets”.
The following are given in the Monash Study (PDF) as common examples of financial abuse:
- Misappropriation or misuse of money, property or assets
- Exerting undue influence to give away assets or gifts
- Putting undue pressure on the older person to accept lower-cost or lower-quality services in order to preserve more financial resources to be passed to beneficiaries on death
- Carrying out unnecessary work or overcharging for a service
- Misuse of powers of attorney
- Denial to access funds
- Failure to repay loans
- Living with the older person and refusing to contribute money for expenses
- Forging or forcing an older person’s signature
- Promising long-term care in exchange for money or property and then not providing the promised care
- Getting an older person to sign a will, contract or power of attorney through deception, coercion or undue influence
- Abusing joint signatory authority on a blank form
- Getting an older person to be a guarantor for a loan where the benefit of the loan is for someone else without sufficient information or knowledge to make an informed decision
The Victorian Department of Human Services
(PDF) expands upon the above, listing the following examples of financial abuse of older people, pointing out that financial abuse is often combined with other forms of abuse and neglect.
- Taking, misusing or using, withholding knowledge about or permission in regard to money or property.
- Forging or forcing an older person’s signature or misleading them about what they are signing, including blank withdrawal forms.
- Misusing ATM cards or credit cards or credit facilities.
- Cashing an older person’s cheque without permission or authorisation or withholding portions of the cheque funds.
- Misappropriating funds from a pension.
- Using a Power of Attorney in a way contrary to the interests of the donor or for direct personal gain.
- Promising long-term care in exchange for money or property and not providing that care.
- Overcharging for or not delivering care giving services.
- Failing to provide reasonable consideration for the transfer of real estate or the acquisition of joint property.
- Negligently mishandling assets including misuse by a caregiver.
- Managing, without permission or legal authority, the finances of a competent older person.
- Getting an older person to become a guarantor without them having sufficient knowledge to make an informed decision.
- Pressuring an older person to take out a loan or a product which is not for their benefit – for example a shared equity loan or a reverse mortgage to pay for a relative’s debts or expenses.
- Predatory lending – unnecessary (no identified need) or unaffordable lending to a vulnerable older person which will cause a detriment or potential detriment to them and a gain to the lender.
- Scams – telephone, door to door or internet.
When potential abuse masquerades as help:
Patrick is 84 years old. His wife Maud recently passed away, and he now lives alone in a house he owns in Melbourne. Since Maud’s death he has been struggling to care for himself at home and believes he is in need of some support in the home. He does not have many friends and his only son, Bruce, is pressuring him to sell his house and move in with him and his family. Patrick does not want to leave his home but Bruce has threatened to put his father into residential aged care if he does not agree to the arrangement. Bruce told his father that he should use the proceeds of sale to pay off Bruce’s mortgage and in return, he would have accommodation and care for life. Patrick has no other family and is dependent on Bruce and his grandchildren for emotional support. Patrick feels compelled to do as his son says (PDF).