Minnesota’s elderly population will double in the coming decades. A growing concern with the rising amount of elderly Minnesotans is protecting them from financial exploitation. Financial exploitation is the misuse or taking of assets from a vulnerable adult through deceptive methods, coercion, or without legal authority. Financial exploitation is categorized as either exploitation done by third parties, those the vulnerable adult does not know, or, familial exploitation – exploitation done by those the adult has a relationship with in some way. The best prevention for elderly adults is to be proactive and discuss financial planning with a lawyer, a financial planner, or several trusted family members.
Financial Exploitation by Third parties
Third parties that exploit the elderly can do so in a variety of methods. Third party exploitation can be low-level scams or done by professional companies and can occur in-person, over the phone, or through the internet. The most common scams to watch out for are:
Medicare or healthcare fraud: be wary of providing personal information to or paying for bills from suspicious companies.
Investment schemes: solicited invitations to join investment opportunities which promise high yields, or, high fees and charges on investments which also move assets without consent. Instead, use an established investment company or local trustworthy adviser for investments.
Charity fraud: solicited donations to help a charity, many times not local but in response to a national event or disaster. You can research charities at www.guidestar.org.
Electronic and lottery scams: email messages requesting personal information, or, request of information or funds to claim winnings in a sweepstake or collect assets in a foreign country.
IRS scams: being contacted by a person claiming to be from the IRS and requesting a wire transfer of large sums of money or sending gift cards with threats that the police are on the way. The IRS will never request payment in a specific way like this and will not threaten to immediately use local police to arrest individuals for nonpayment.
Bail bond scams: being contacted by a person claiming that a loved one has been arrested and needs bond money immediately. Call your loved one and their family to check on them before sending any money.
Luckily, most schemes from third parties can be prevented if elderly persons are watchful and skeptical of these methods and persons. Elderly persons should only seek services from reputable contractors and other professionals and not respond to solicitation from unknown persons. Before giving assets or personal information elderly persons should talk to a professional, such as a lawyer or financial planner, and discuss the decision with several trusted family members. Elderly persons should never sign a document relating to billing, transferring money, or containing personal information if they do not understand it. Most importantly, elderly persons should always ask for more information and verify sources.
Minnesota law does provide a remedy for vulnerable adults who are victims of third party financial exploitation. Under Minn. Stat. § 325F. 71 an exploited elderly person can bring a civil action against those who having taken their assets through deceptive practices. Further, Minnesota has separate claims which can also be brought for false advertising, consumer fraud, and deceptive trade practices. Additionally, if the elderly person is in a nursing home, receives in-home care, or does not receive proper social security or SSI payments for care, they may recover under Minn. Stat § 626.557 for certain instances of financial exploitation. Lastly, Minn. Stat. § 609.2335 provides criminal penalties for those who exploit elderly persons.
Financial Exploitation by those the Elderly Person Knows
Unfortunately, the majority of financial exploitation is done by people the elderly person knows. These exploiters are family members, friends, neighbors, caretakers, and others. These people can also be the least expected persons including professionals. Some common methods that these persons use to exploit elderly persons are:
Convincing the elderly person that they have experience, or are an expert in an area, to create confusion over the elderly person’s personal finances.
Use threats or coercion to cause the elderly person fear or shame, and to isolate them from persons who could help, or simply creating a disingenuous relationship with an elderly person to make them feel appreciated.
Use alcohol or substance abuse as an excuse to solicit funds for rehabilitation services, with no intention of seeking these services.
Care providers may overcharge for personal errands, take elderly persons assets to pay their own bills, create credit lines in elderly’s names, or charge for services not provided.
Exploit their legal position as joint account holder, power of attorney, or conservator to take or misuse the elderly person’s assets.
Elderly persons should remain reasonably skeptical of all persons in a position to exploit them. If an elderly person believes a person close to them is exploiting them, they should talk to several other people they feel they can trust.
Disappointingly, conservators, who are granted access to an elderly person’s assets by the court, can still exploit elderly persons. Minnesota court workers in charge of auditing conservatorships have discovered $875 million dollars of financial exploitation from the elderly since 2012. The auditors recognize that one out of ten conservatorships have accounting issues which require a judge’s review. Fortunately, Minnesota has the only mandatory reporting system for conservators called MyMNConservator which requires conservators to submit financial reports to be audited.
Minnesota law also provides protection for elderly persons exploited by a person they know. Under Minn. Stat. 626.557 a person who has a fiduciary obligation to an elderly person is liable for their exploitation of the elderly person. Likewise, under Minn. Stat. § 609.2335 breaches of fiduciary duty to an elderly person can submit the person to criminal liability.
If You Think You Are A Victim Or Know Someone Who Is A Victim Of Financial Exploitation
If you think you are a victim you should contact the local police department or the county attorney’s office in the county which you live. Additionally, you can call the Minnesota Board on Aging's Senior LinkAge Line at 1-800-333-2433.
There are several signs an elderly person is experiencing financial exploitation:
If the elderly person is transferring money which is uncharacteristic of the elderly person, or, a new person or a person not appointed by the court is assisting the elderly person with their assets.
If the elderly person cannot explain their finances or the disappearance of valuables and financial records.
If there are new unpaid bills, property liens, or foreclosure notices issued to the elderly person.
If the elderly person has basic utilities canceled and cannot be contacted.