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Op/ed: How to protect a loved one from financial fraud and elder abuse


By Jean-Luc Bourdon on July 5, 2013

Baby boomers increasingly are facing the difficult task of protecting aging parents from financial fraud, scams and undue influence.

This problem continues to grow as extended life expectancies contribute to a larger aging population.  Already, one out of five Americans over the age of 65 has been the victim of a financial scam, according to the Investor Protection Trust.  And experts say senior financial abuse is getting worse.

The National Center on Elder Abuse (NCEA) broadly defines senior financial exploitation as “the illegal or improper use of an elder’s funds, property or assets.” The problem is easy to underestimate because, for every known case of elder financial abuse, research shows that four to five cases aren’t reported. Victims are often ashamed, fearful of losing their independence, intimidated by the perpetrator or simply lack awareness that a crime occurred.  Even when elder fraud is reported, the circumstances may be too murky and the senior’s memory of the facts too sketchy to bring successful prosecution.

The financial loss of victims of elder financial abuse is estimated to be a staggering $2.9 billion annually.  All senior citizens, regardless of wealth, are at risk, but wealthy individuals are prime targets.  According to one study, women are twice as likely to be victims of elder financial abuse because most victims live alone and women generally live longer than men.  Isolation and loneliness are common risk factors.

Common perpetrators are caregivers, family members and trusted professionals.  So, elder financial abuse can be difficult to detect.  Ideally, seniors should be surrounded by a protective team.  Proactive families nurture protective relationships and introduce the members of their team to each other.  For example, many seniors introduce their children, power-of-attorney designee, successor trustee, caretakers, tax advisor, and/or wealth advisor to each other.  Seniors will not only benefit from coordinated services, but the team’s checks-and-balances will also contribute to their protection.

To address privacy restrictions, professionals on the team must be given written authorization to communicate with each other.

The red flags of financial abuse can be subtle and it is important that team members are comfortable sharing with each other little signs that could easily be dismissed.

Warning signals

Here are a few common red flags:

• Unusual investment activity; e.g. liquidating a portfolio.

• Unpaid bills.

• Clients’ inability to access their financial records (no longer coming in the mail, changed password, etc.).

• Unusual activity in bank accounts, e.g., sudden withdrawals of large sums, withdrawals from automated banking machines when the elder is homebound, online transactions if the senior has no computer.

• Signature on documents that does not resemble the elder’s signature.

• Changes to investments that have not been used in years, e.g. annuities.

• Unusual loans against equity in property or life insurance policies.

• New relationships expressing interest in the client’s financial situation.

• Change of beneficiary status on investment accounts or life insurance policies.

• Changes in a power of attorney from a long-time friend or family member to a person new to the situation.

Additional red flags and general information can be found by doing Internet searches for California Adult Protection Services, National Committee for the Prevention of Elder Abuse and National Center on Elder Abuse.

The best intentions of protective baby-boomers can be met with resistance from their aging parents.  If you experience some typical push-back, I highly recommend communication resources from David Solie, an author, speaker and expert on the subject (

Finally, should you have to report concerns of elder financial abuse, don’t hesitate to contact Adult Protection Services in the county where you live.  When it comes to elder financial abuse, the unthinkable is more common than we think.

• Jean-Luc Bourdon is a certified public accountant and a a wealth advisor and principal with BrightPath Wealth Planning, LLC in Santa Barbara, Camarillo and Westlake Village. He serves on the Personal Financial Specialist Credential Committee and task forces of the Personal Financial Planning Executive Committee of the American Institute of CPAs. He is the personal financial planning chair for the Channel Counties Chapter of the California Society of CPAs. Contact him at