Financial Elder Abuse: 6 Warning Signs

Elder abuse: two words we rarely think of in combination. But according to the United Nations, it's a reality that affects one in every six people aged 60-plus around the world. While mistreatment can take many forms — including psychological, physical, sexual and neglect — the most common form of elder abuse in Canada is financial.

The UN has designated June 15 as World Elder Abuse Awareness Day, saying it represents "the one day in the year when the whole world voices its opposition to the abuse and suffering inflicted to some of our older generations." Here are some things to know.

What is Financial Elder Abuse?

The UN defines financial elder abuse as any economically related action or lack thereof that causes distress or harm to an older person. It may take the form of pressuring into gifting or financial aid, asserting control over assets and strong-arming changes to a will, among others. But the line between an innocent request and taking advantage is a blurry one, especially because abuse is typically defined as occurring within an established relationship of trust, such as with a friend or family member. Plus, mistreatment also tends to start small and worsen over time.

Warning Signs

We turned to the Ontario Securities Commission, Canada's biggest securities regulator, and RBC Wealth Management to identify some of the following common red flags:

1. Unusual banking activity. If an older person has never bought anything online or isn't one to withdraw large sums of cash, be wary of such activity appearing on his or her bank statements. Ditto any unexplained money transfers or credit card charges.

2. Missing valuables. The story behind missing belongings, from jewelry to collectibles, may be more than simple misplacement.

3. New "friend." A recently acquired pal or love interest can be wonderful, but friends may be foes if they accompany an older person to bank or legal appointments, particularly if an older person seems ill-at-ease in their presence.

4. Updated living arrangements. Whether it's a family member or companion, be on high alert if someone takes up residence in an older person's home. After all, a property is the primary asset for many. Of course, be doubly skeptical should the older person move out in the process.

5. Recent financial struggles. A newfound inability to pay regular bills or purchase things that were previously typical is cause for concern, especially if it comes with no explanation.

6. Lack of self-care. If an older person is neglecting needs such as hygiene or medication, financial distress might be the underlying problem.

Prevention

As is often the case, the best defence is a good offence. Recognizing this issue, the Investment Industry Regulatory Organization of Canada (IIROC), whose job it is to protect Canadian investors, recently announced plans to issue senior-specific guidelines for firms. For self-directed investors, there are some specific DIY measures.

RBC Wealth Management suggests appointing a power of attorney (POA) to oversee one's finances in the later years. The choice of POA should be pragmatic: To avoid a conflict of interest, the individual should differ from the person selected as the health-related POA, and for practical reasons, he or she also ought to be located nearby, enabling swift decisions when needed.

Social life is another factor to consider. An older person who is isolated is more likely to be targeted, says Canadian non-profit Reach Isolated Seniors Everywhere. Keeping in regular touch with a healthy circle of friends and family is key.

What You Can Do

If you suspect any type of elder abuse, the government of Canada and HelpGuide.org offer a few recommendations. They suggest confronting an older person about suspicions of abuse, but a gentle approach is best since it can be a very sensitive subject. If you're an older person yourself and you're feeling financially taken advantage of, trust your instincts. If you're not ready to call the police, bring up the issue up with someone — maybe a friend, your doctor, your lawyer or anyone else you trust.