It is one of the most difficult types of fraud to unearth, but it does not directly affect businesses or the average consumer — in large part because its victims rarely report it. In fact, they are often prevented from doing so by perpetrators.

What is it? Financial abuse of seniors, or elder fraud. Many thousands of Americans are victimized each year and some observers fear these crimes are becoming more widespread. But you can help put a stop to elder fraud. Learn the signs and, as the saying goes, if you see something, say something.

Vulnerable targets

Older individuals with retirement savings, accumulated home equity, and other significant assets make appealing targets for unscrupulous family members, caregivers, financial advisors, fiduciaries, and scam artists who insinuate themselves into their victims’ lives. Seniors could be at risk due to isolation, cognitive decline, physical disability, or health problems. Even the recent loss of a spouse can make an otherwise discerning individual unusually vulnerable.

Exact statistics on elder financial abuse are hard to come by, largely because victims hesitate to report it out of fear of their abusers or embarrassment. But various studies estimate that the percentage of the elderly who have experienced financial exploitation in the past 12 months is between 2.7 and 6.6 percent. Although there is no reliable national estimate of the financial losses suffered by victims, one study concluded that financially abused seniors in New York state alone lose approximately $110 million annually.

Red flags

There are many red flags associated with the financial exploitation of vulnerable seniors. If you notice that an individual seems fearful or submissive toward a guardian or that a caregiver prevents the elder from speaking for him- or herself, start asking questions. For example, has the elder recently authorized a change in financial management, such as who has power of attorney? Or does the senior:

• Have a new guardian or caregiver who conducts financial transactions, such as cash withdrawals, on his or her behalf?
• Seem unusually reluctant to discuss financial matters?
• Appear unable or unwilling to handle basic financial responsibilities such as paying bills or reviewing financial statements?

If you can gain access to the elder’s financial records, look for frequent large withdrawals (particularly daily maximum currency withdrawals from ATMs), insufficient fund notices, uncharacteristic attempts to wire large sums of money, and recently closed accounts. Any of these could suggest financial fraud or abuse.

Do your part

If you have vulnerable elderly relatives, friends, or neighbors, do your part to protect them from fraud and exploitation. Report any concerns to law enforcement or your municipality’s senior services division. And if you are a family member, consider engaging a forensic accounting expert to perform a thorough investigation.