CPA Karen Webber explained how people are financially exploited and what we can do to stop those thieves in their tracks Monday during News 8 at Sunrise.
“Financial exploitation is really a clinical term for what we would commonly know as financial abuse,” said Webber. “It’s taking their credit card, their ATM card, their checkbook, or maybe it’s even living in the household without contributing.”
Webber said typically victims are older adults. “it makes sense. These are typically the individuals who have a steady source of income. They’ve got assets saved up over their lives, and as they experience some issues with cognitive abilities as they age. That’s the perfect situation for an opportunistic friend or family member to step in and say, here, let me handle that for you.”
Sometimes it can be challenging to recognize financial exploitation but Webber said there are markers we can all flag. “Obviously, people aren’t too willing to turn over their financial records, so you have to look for other signs,” she said. “The biggest red flag is really some other form of abuse that’s going on. Financial exploitation typically co-occurs with physical abuse, emotional abuse and neglect. Other red flags might be, does the individual appear malnourished? When you’re over there, check their fridge for food. Have they forgotten to buy their food or do they not have the money to do so? What about mail piling up? Are there credit card bills in there? Does this individual use credit cards? There are plenty of red flags around the house that you should be able to see.”
If you suspect something is amiss, check your loved ones financial records. like a checkbook. “You want to go back, if you can, and look at some of the records to see if there’s a pattern of the activity,” Webber explained. “You want to bring that to the attention of the police. You can also bring it to the attention of Adult Protective Services, or APS, here in New York State. The police can look into the criminal aspects of a financial exploitation case, while APS can go in and take care of any additional needs your loved one might need to protect their assets.”
Webber recommended the following as best practices for preventative steps when it comes to financial exploitation. “Education is always the key to prevention, so talk to your loved ones about the scams that are out there. You guys report on those all the time. Make sure there’s a Power of Attorney in place. When you have a Power of Attorney, you can also appoint a ‘monitor’ to oversee the activities of the agent. Really, have frank discussions with people like your financial planner, or a trusted CPA, and make them know what your final wishes are.”
For more “Smart Money” decisions, visit the New York State Society of CPA’s website at nysscpa.org/getmoneysmart.