Financial abuse

Australia’s population is ageing. This means an increasing proportion of the population is aged 65 and over. The over-50s, many of whom are asset-rich, continue to play a critical role across society, working in paid and volunteer jobs and in the home, sharing valued knowledge and experience and helping their families with caring responsibilities. They must be presumed able and entitled to make their own decisions (Roszak 2009, p. 2). But it is also true that ageing can be accompanied by increased vulnerability and there are those who exploit this vulnerability (EAPP 2005, p. 7).

The combination of these factors has resulted in abuse of older people becoming a significant and growing phenomenon. The prevalence of elder abuse in community-dwelling older Australians is estimated to be 14.8% (Qu et al. 2021). While psychological abuse is the most commonly reported abuse, financial abuse is the type of abuse that lawyers can have a significant role in preventing.

Definition

Elder abuse is any action in a relationship of trust that results in harm to an older person. It can take various forms, such as psychological abuse, financial abuse, physical abuse, sexual abuse, and neglect. People with some form of decision-making disability are more likely to be subject to abuse. (See Clare et al. 2011; Wainer et al. 2010; and (DHS 2009).

Financial abuse happens when someone takes or misuses an older person’s money, assets or property without them agreeing.

Financial abuse is usually not a single event but a process that develops over time. It can be difficult to assess at what point a well-intentioned but ill-considered financial act tips over into abuse, or when borrowing money becomes misappropriation.

For example, if a person moves their parent or older relative in with them, accepts a Centrelink Carer’s Benefit and manages the older person’s pension and super payments while the older person recovers from an illness, this could become exploitative if the older person is not involved in decision-making, feels they are not cared for in the way they wished, and loses control of their assets.

For more information on elder abuse and financial abuse:

• Financial abuse at Seniors Rights Victoria

• Financial abuse at Compass.info

• With Respect to Age  – 2009: Victorian Government Practice Guidelines for Health Services and Community Agencies for the Prevention of Elder Abuse.

Signs of abuse

Common examples of financial abuse of an older person:

• Appropriating the proceeds of the sale of an older person’s home with the promise of providing future accommodation or care and then not providing it
• Threats or undue pressure on an older person to sell their house or hand over assets
• Threatening, coercing or forcing an older person into signing paperwork concerning property, wills or powers of attorney
• Misusing or neglecting powers of attorney to manage an older person’s finances
• Using an older person’s bank accounts, credit cards or financial documents without authorisation
• Managing the finances of a competent older person without their permission
• Pressuring an older person for a gift or a loan or for earlier inheritance
• Incurring bills for which an older person is responsible (DHS 2009, pp. 12–13)

Signs of financial abuse include:

• Promises of ‘good care’ in exchange for transferring property or money from bank accounts to the carer
• Fear, stress and anxiety expressed by an older person
• Unfamiliar or new signatures on cheques and documents
• The older person cannot access their bank accounts or statements
• Significant withdrawals from accounts
• Transfer of assets where the person may no longer be competent to manage their own financial affairs
• Accounts suddenly switched to another financial institution or branch
• Drastic changes in the types of banking activities, or to a will (DHS 2009, p. 13)

It is not always easy to recognise financial abuse but there are a number of accepted warning signs or ‘red flags’.

The following are reasons to be alert to possible abuse:

1. vulnerability of an older person due to lack of capacity or to conditions such as physical frailty, dependence, social isolation;
2. a trusting relationship with the likely perpetrator;
3. isolation and control of the older person and/or transaction;
4. evidence of undue influence – for example, coercive behaviour by a family member at appointments, or the older person being unable to speak for themselves or appearing confused, withdrawn or fearful;
5. lack of concern for the welfare of the older person – for example, the older person appears unclean or unkempt;
6. no money being available for an aged care bond when there should be sufficient funds;
7. suspicious or dubious transactions or banking activity – for example, drastic changes to wills, or a recent addition of a signature to an account, or a move from in-person banking to ATM withdrawals;
8. secretiveness of the older person;
9. assets change hands during a period of vulnerability – evidenced, for example, by the transfer of a title or by a new found prosperity in the person in control;
10. a new client with a sense of urgency about a proposed transaction.

These factors are based on an 8-point framework developed by Kemp and Mosqueda 2005, pp. 1123–27.

Abusive transactions