PREVENTING FINANCIAL EXPLOITATION: What Every Senior Needs to Know
Financial exploitation of senior citizens is shockingly prevalent throughout the United States and affects seniors at all economic levels. It propels low-income senior citizens further into poverty and robbing many others of their savings, their financial security, and even their homes. For those who are low-income or just above, it is particularly devastating.
SeniorLAW Center enourages seniors to be pro-active and vigilant and to become self-advocates. Review your financial statements and documents regularly. Do not be passive! Do not share your personal information with others except when necessary or when you are requesting direct services.
Here are four specific ways senior citizens are being financially exploited and ways seniors can avoid becoming victims.
1) ABUSE OF A POWER OF ATTORNEY
A power of attorney is a document in which an individual grants to another the power to handle his or her affairs. The person granting the powers is called the “principal,” and the person who is given the powers is called the “agent” (identified in older powers of attorney as the “attorney-in-fact”). The agent may abuse the powers he or she has pursuant to this document.
The primary reasons that the agent misuses his or her powers are lack of supervision or monitoring by the principal and a lack of thought in choosing an agent. In choosing an agent, you must be certain that the agent is honest, capable and willing to take on these responsibilities. Note that there is a lack of oversight by the courts on the actions of an agent. This creates the potential of abuse. This becomes even more relevant when you become incompetent and no longer can monitor the actions of your agent.
Sit down with a lawyer to carefully tailor the power of attorney document to fit your individual needs. You should only grant powers that you need to grant. Be aware of granting broad powers. You may be granting the agent the power to make gifts of your property or assets. This power opens the door for the potential of abuse and misuse.
- Read the document carefully before signing it. Discuss any questions with your attorney. Talk with the agent about the powers you are granting him or her. Be certain that they are willing to take on this important responsibility.
- Monitor the actions taken by the agent on your behalf. Demand that the agent inform you of all his or her decisions. Granting powers to another does not mean that you release any of your rights to control your own affairs.
- Always review your financial statements. Review your account information and demand disclosure. You should appoint a co-agent if you are not in a position to monitor your financial statements. They will have oversight of each other to ensure that no exploitation is occurring.
- Revoke if you suspect abuse! If you suspect that your agent is abusing his or her powers, you may revoke his or her powers in writing, as long as you are competent to do so.
2) JOINT BANK ACCOUNT PROBLEMS
A joint account with another means that both of the joint owners have access to the money in the account. There are two types of joint accounts:
This is an account held by “You or John Doe.” This allows each owner to withdraw money from the account without the signature of the other. Obviously, this type of joint account is open to misuse. Senior citizens open up these accounts for convenience purposes because they may be too frail to travel to the bank. Financial exploitation occurs because the joint owner has access to everything in the account even if they did not contribute anything to the account.
To prevent this exploitation you should always review your bank statements in order to monitor the actions of the other owner. Take note that the bank will not be liable if the owner withdraws your money and deprives you of the funds. However, if you can prove that it was your funds that contributed to the account, you may hold the other owner liable. During the lifetime of the parties, each party is entitled to the amount in the account in proportion to their net contributions. Upon death, there is automatic inheritance by the joint account holder. Therefore, your will does not control the distribution of this asset.
“And” account: This is an account held by “You and Jane Doe”. It is an account that requires both owners to sign for a withdrawal. Therefore, the joint owner must be someone you trust and whom you want to inherit the funds of the account upon your death.
3) DEED TRANSFERS
As a general rule, it is not prudent to sign over the deed to your property to another, including relatives. Once you sign over the deed to someone, you are no longer the owner of the property. The new owner can do whatever they want regarding the property, including evicting you from your home, mortgaging the property, or selling the home and keeping all of the proceeds.
Be cautious when someone is trying to persuade you to transfer the deed over to someone else. Tell them that you appreciate their concern. However, you will consult with an attorney concerning the benefits and detriments of executing a deed transfer. Be advised that failing to read the deed, being infirm and elderly, or realizing you made a bad decision is not a valid legal defense to setting aside the deed transfer.
Transferring ownership of your property also makes you ineligible for certain senior citizen benefits such as home repair programs, rebates and other resources. Consider writing a will to convey your property, protecting your interests in the property until after your death.
4) CREDIT CARD FRAUD
You are not liable for credit card charges if the application and/or use of the card is unauthorized. If you suspect credit card fraud, you must write to the credit card company stating that the charges are unauthorized and/or you never applied for the account. Your rights will not be protected if you dispute the charges only by phone. To prevent credit card fraud from happening, you should always know the location of your credit card.
You should not open up an account in the name of someone else because you are consenting to their use and are liable for the charges placed by this person.
In conclusion, please remember to take an active role in your affairs. You must monitor your financial statements, ask questions, and demand disclosure of information from your agent. You must remain aware and advocate for yourself in order to prevent financial exploitation.
Seniors in Pennsylvania can discuss concerns about financial exploitation by calling our Pennsylvania SeniorLAW HelpLine at 1-877 PA SR LAW (1-877 727-7529). Seniors in Philadelphia can also call SeniorLAW Center’s telephone intake line 215-988-1242 Mondays through Thursdays, 10 a.m. – 2 p.m.