What Is Financial Abuse?

At Elder Financial Protection Network of Petaluma, California, we know that financial elder abuse is a major problem. Senior abuse can take many different forms, including physically, emotionally, sexually, and financially. Financial elder abuse is a crime, and it is on the rise. In 2009, MetLife Mature Market Institute released a report, Broken Trust: Elders, Family and Finances, stating that up to one million older Americans may be targeted yearly. The related costs (e.g., for health care, social services, investigations, legal fees, prosecution, and lost income and assets) for older Americans exceed $2.9 billion annually.

Elder Exploitation

At an age when the labors of a lifetime should be enjoyed, many elders are being exploited by con artists, unscrupulous companies, caregivers, and even trusted family members. The outcome is often devastating. Without financial resources, physical and emotional well-being decline. Elders lose their independence.

The laws defining the abuse and exploitation of elders vary from state to state. According to California State Welfare and Institutions Code Section 15610.30, financial abuse is "a situation in which a person, including but not limited to, one who has care or custody of or who stands in a position of trust, of an elder or dependent adult, takes, secretes, or appropriates their money or property, to any wrongful use, or with the intent to defraud." Financial abuse also includes the illegal or improper use of an elder or dependent adult's financial resources.

Who Is an Elder?

The definition of an elder can vary from state to state. According to the Welfare and Institutions Code, an elder is a person over age 65 who resides in the state of California. A vulnerable elder is one whose physical or mental health puts him or her at increased risk of abuse.

A Growing Problem

Financial abuse of elders and dependent adults is on the rise. California is a prime target for financial abuse as the nation's highest retirement destination, with an estimated 4.2 million people over age 65 living in the Golden State in 2012. The California Department of Finance projects that by 2020, California's over-65 population will have increased by 50 percent from 2010 to 6 million and by 2020 will have doubled to 8.4 million as even the youngest baby boomers reach 65 years old.

Financial abuse is one of the most underreported crimes due to the victim's embarrassment, fear of loss of independence, intimidation by the perpetrator and widespread lack of awareness that it is a crime. In California, at least 10,000 reports of financial abuse are submitted every month according to Adult Protective Services (APS) programs, but experts agree that this number is too low and inaccurate.

Victims of elder abuse, neglect and financial exploitation are 3.1 times more likely to die at an earlier age than are those not victimized. Victims rarely recover financially and losses often lead to depression, increased physical problems, reliance on public benefits and even death. Increased funding and partnership is urgently needed to fight this growing problem.

What are the criminal penalties for financial abuse?

View the California Penal Code