Elder financial abuse – also referred to as “Elder Financial Exploitation'' – is a widespread problem in the United States that often goes under-reported. Research from the AARP Public Policy Institute in 2023 found that victims over age 60 lose $28.3 billion each year – and this is just the tip of the iceberg when it comes to the monetary, physical, and emotional costs that result from the financial exploitation of older adults. This article will cover what you should look out for if you have an aging loved one and what safeguards you can put in place to help protect them.

What  Elder Financial Abuse means

At True Link, we categorize elder financial abuse into three distinct categories:

1. Criminal Fraud: This is the category that often garners the most attention because it includes illegal activities like identity theft, grandparent and romance scams, or credit card fraud. This type of exploitation is typically perpetrated by someone unknown to the older adult who tricks them into sending money or providing personal information. Reports from the FBI's Internet Crime Complaint Center (IC3) branch indicate that the older you are, the more likely you are to fall victim to cybercrimes and seniors are frequently the targets of artificial intelligence-driven scams which are becoming more and more prevalent.

2. Caregiver Abuse: This type of elder financial abuse refers to deceit or theft enabled by an existing relationship – typically a family member, a paid caregiver, friend, lawyer, accountant, or financial manager. Like criminal fraud, this type of elder financial abuse is also illegal, but instead of relying on anonymity to defraud, it relies on trust. Most studies – like this one from the Consumer Financial Protection Bureau in 2019 – find that strangers are far more likely than known persons to commit elder fraud. But while known perpetrators are less common, the CFPB also found that reported losses to a known person were almost three times the amount of reported losses to a stranger. 

3. Predatory Exploitation: This category of scams uses misleading or confusing language and social pressure to take advantage of cognitive decline, memory loss, or limited experience with technology to pressure or lead older adults to make detrimental financial decisions. While not explicitly illegal, this type of category can still result in significant losses.

An example of this type of exploitation may go like this:

A third-party marketing firm sends an older adult with memory loss three free issues of a popular national magazine. The firm calls the older adult and says, “You’ve been receiving [this magazine], and you have not yet paid for your subscription. According to the terms of your offer, today is the final deadline to make a required payment, so please give me your credit card number now.” The key phrase is “according to the terms of your offer”—the older adult believes he has agreed to these terms, perhaps due to trust, confusion, pressure, or memory loss, and so believes he owes money when in fact he does not. He hands over his credit card information, only to be charged above market rates for a long-term subscription.

Why do these categories matter?

When we think about elder financial abuse and how best to protect our loved ones, it helps to consider the different types of exploitation we need to defend against. It is just as important to put safeguards in place for headline-making scams or major data breaches as it is to protect our loved ones from less conspicuous predatory behavior or being taken advantage of by people they trust. 

How today’s technology can help protect an older adult’s finances

Historically, criminal fraud has been the target for innovation in financial technology. Across consumers of all ages, credit card companies and banks have security measures in place to block transactions that appear to be fraudulent. But the other two categories of elder financial abuse – caregiver abuse and predatory exploitation – can be less clear cut cases of fraud. While banks and credit card companies often refund money lost to scammers, there is less recourse when a person “willingly” gives their credit card number over the phone or hands over their debit card to a caregiver, even if manipulation and predatory tactics are involved. 

Fortunately, there are financial tools available today that are designed to provide varying levels of protection from the types of threats most commonly faced by older adults. Depending on an individual’s needs, you may want to leverage one or more of these options. 

Credit monitoring to stay informed

Credit monitoring services can help you spot errors, inconsistencies, and risks of identity theft on your credit reports so that you can take steps to address them. While these services won’t prevent identity theft, they can keep you informed about how a loved one’s credit history and personal information is being used, so you can take action if you see suspicious activity. 

There are free services available via Credit Karma or CreditWise, as well as paid premium services that offer more extensive monitoring and alert options. All three credit bureaus (Equifax, Experian, and Transunion) offer credit monitoring, and if your loved one’s personal information was impacted by a corporate data breach, they may be eligible for a free subscription. 

Smart account monitoring for fraud, scams, and mistakes 

For the same cost as a premium credit monitoring tool (typically anywhere from $8 to $35 a month), you may want to consider a financial product that offers further functionality in the form of smart account monitoring. In addition to offering credit monitoring and identity theft protection, these tools monitor connected accounts for concerning activity such as duplicate charges, suspicious vendors, and changes in spending and cash usage. Older adults who have a good handle on their finances can keep tabs on their accounts and set up alerts for themselves and those they trust.

Safeguard spending before mistakes happen 

The tools above can be good options if an older adult hasn’t yet been victimized by scams or predatory behavior or made mistakes with their money. But if you’re already concerned about the safety of your loved one, this monitoring alone may not be enough. This is where an option like the True Link Visa® Prepaid Card can help.

Family members can set up and fund a True Link Visa Card for a loved one’s use from any existing bank account (or trust) and then use the True Link Spending Monitor to set custom spending rules and guidelines. These settings might include blocking transactions at specific merchants or general spending categories (e.g. subscriptions or charitable organizations), only allowing purchases when the Visa card is present (which can help limit online and over-the-phone transactions), and blocking merchants and businesses identified as potentially predatory.

Like some of the other tools mentioned in this article, True Link’s platform allows family members to receive real-time alerts via text message¹ or email to stay informed. You can be alerted when a purchase is blocked, when spending limits are reached, and/or when funds get low – and you can review the Visa card’s full spending history online anytime.

Help control and monitor caregiver spending 

True Link can also be beneficial in situations where older adults rely on the support of an in-home caregiver. You may want this person to help your loved one purchase the essentials (e.g. food, prescriptions, medical co-pays, etc.), but are hesitant to have them use a regular credit card or are looking to avoid handing them cash or gift cards in-person every week.

The caregiver can be provided their own True Link Visa Card and use it anywhere Visa cards are accepted. Using the Spending Monitor to customize where the Visa card works (e.g. grocery stores, pharmacies, doctor’s offices), family members can be alerted if a caregiver tries to use the Visa card at a blocked merchant and/or if purchases are made above a certain amount. 

Preserving autonomy while prioritizing safety

Finally, one of the most important things to keep in mind when choosing technology to help a loved one is how it could impact their autonomy. We know that independence loss can impact the mental and physical health of older adults, so it’s important to find the right balance of safeguarding their finances without putting unnecessary restrictions on their autonomy.