Spotting elder abuse: application of the fraud triangle
At Nicholls Law, we have spent many years fighting to financial abuse, including elder abuse and the abuse of vulnerable adults. We have many war stories and from this, instead of taking battle scars we’ve learnt some valuable lessons. Through our experience fighting to right the wrongs of those who’d take advantage of the elderly we understand fully how to spot the signs. So, we think it’s only right that we share our perspective, so hopefully we can have an active role in stopping this type of abuse.
Sadly, financial abuse appears to be on the rise. Increasing social pressure, fractured families, technological advances and internet banking have all previously been cited to contributed to this (Law Society, 2020). However, we reflect that the circumstances of the pandemic for the last year or so have impacted this further as many vulnerable individuals becoming reliant on other individuals to met there day-to-day needs.
Although we may not realise it, financial abuse is essential a type of fraud.
Regrettably, it has been noted that there has been an “explosion of cases in which the perpetrator of the fraud was a family member”. Reflecting on our experience, we know this to be the case. Most individuals when thinking of fraud or financial abuse will think of con-artist or a faceless hacker as the perpetrator. Which is not to say the vulnerable aren’t at risk of fraud by hacker or con-artist, but with a family member we tend to be much more open and trusting. Sadly, this trust allows a platform for the perpetrator to commit the fraud.
Why are elderly and vulnerable adults targeted?
UK citizens over the age of 50 years old control an impressive 70% of the wealth here, and importantly, many of the seniors do not realise the value of their assets. Particularly, as many of these individuals will be home owners which value would have increased substantially – in the early 90’s average house prices in the UK where around the £100k mark but in May 2021 the average was £284k. But these figures vary a lot, depending on the area. For example, in Essex where we are based, the average house price is over £400k now. Importantly, individuals in this age group are more likely to be lonely and vulnerable, or have disabilities that make them dependent on others for support in their activities and affairs.
Victims of financial or elder abuse can often be reluctant to take action against their abusers because they do not want their care and support to stop, or they may also feel ashamed and not want to admit they’ve been take advantage of.
What is financial abuse?
The WHO define financial abuse of the elderly as “The illegal or improper exploitation of use of funds or other resources of the older person”. This can span a wide variety of actions, and includes a broad spectrum of things. For example, on the lower end of the spectrum, individuals may overcharge for things they’ve purchased, may accept payment multiple times for one thing, helping themselves to an extra fiver or so from someone’s purse/wallet. On the higher end, we’ve come across examples of undue influence so individuals can get more inheritance Below are some of the common examples and some of real-life war stories to show how this can happen.
War stories for financial or elder abuse
Visiting son. The son who gracefully travels home regularly to see his mother (and support his local football team). The mother provides all food for the son and often treats him to a take away, he barely spends a penny while he is home. The son, however, requests £400 for the petrol for a 200-mile round trip. His mother, likely know no better (fuel is very expensive nowadays) and/or fears abandonment, just pays.
Facebook marketplace fiend. A niece likes like help out with her uncle who has aged quite rapidly in recent years and needs more help around the house. He has had a couple bad falls in recent years, so thought nothing much when his niece started to confine him to a limited number of rooms in his home. Meanwhile, the niece has gradually been selling off the contents of the other rooms via Facebook marketplace. The uncle hasn’t seen a penny of the proceeds and is unaware of what is happening.
Beer on a champagne budget. As Dottie was high risk, during the pandemic her daughter had started to do her weekly shop for her. Dottie used to do her weekly shop in Marks & Spenders or Waitrose as she liked the customer service and had been a loyal customer for years. However, when her daughter took over she started to shop in budget shops to get her shop, buying the cheapest basic range. Dottie would always reimburse her daughter for the cost of the shopping but her daughter was overcharging her by almost double.
Double pay. Dory had started to experience problems with her memory and had become increasingly forgetful. She had a weekly cleaner who would come to her house. Dory was concerned that she’d forget to pay Dory, but she knew the cleaner was kind and if she’d forgotten to get cash out in advance that she would take her to a cash point to get the cash out. Dory would offer to pay the cleaner multiple times for the same job. Sadly, this meant that the cleaner was being paid cash when she got to the job as well as often taking her to the cash point after a job to get paid again.
Undue influence. A mother had three children and had always been open with them, explaining that she’d like to give equal amounts to all of her children. One of her children, started to experience some financial struggles and begun bullying and pressurising the mother to change her Will. Although, the mother had mental capacity she changed her Will to reflect her child’s wishes as she was concerned that they would stop seeing her and that she’d no longer be able to see her grandchildren.
Loan shark. Jonathan didn’t have much family, but he did have a couple cousins who were about 10 years younger than him. Jonathan was starting to show signs of forgetfulness but still had his mental capacity. The cousins asked Jonathan for a loan and after some convincing, he agreed to it and loaned them the money. A couple years passed and Jonathan still hadn’t been repaid and by now Jonathan had developed dementia. The cousins claimed that the loan Jonathan had given was in-fact a gift and not a loan. Jonathan was confused as he was very sure it wasn’t a gift, as that’s very uncharacteristic for him.
Safe-keeping. A father had three sons, two lived quite far away and only one of them was local. The local son helped the father out a lot, as he was close by. After his mother passed away, the son convinced his father to down size to a small house as it was just him and the son kept telling the father horror stories of elderly people’s house being broken in too. Eventually, the father agreed and sold his house for a small bungalow. This left the father with a large sum of money in his bank account from the left over equity. The son then convinced the father to put the money in his account for ‘safe-keeping’ from the ‘tax man’. The son never repaid the money to his father.
Deathbed will. Gwen’s son and her current husband (step-father to her son) had never seen eye-to-eye. Gwen and her husband were both independently wealthy, so Gwen felt there was no need to make much provision for him in her Will and instead have left everything to her son. However, this made her husband very upset as he did not like the son. When Gwen was very ill on her deathbed, her husband tricked her into signing a Will cutting her son out of his inheritance.
Granny annex. Dexter & Deidre had retired some years ago now, and were becoming increasingly aware that they might need more care soon. They were considering their options, looking into care homes and other sheltered accommodation. Their eldest son made the suggestion that they come and live with him, so that his family could take care of him. They agreed to pay for an extension which added value to property in exchange for lifetime care. As soon as the extension was complete, the level of care his family were providing stopped and his son did not keep up his end of the agreement.
Misuse of a Power of Attorney. Kevin was worried about his parents and there later life care, so he arranged for himself to become their Lasting Power of Attorney. He did a good job taking care of his parent’s affairs. He made sure they were claiming the correct benefits, paid their bills on time and made sure everything was running smoothly. When it was time for his parents to move into a carehome, he needed to sell their property to fund this. Kevin was a tradesman himself and many of his friends were. He decided to sell the property to his business partner without exploring all opportunity. This meant that the property sold undervalue for what it could have got in different circumstances and Kevin benefitted from this as his business partner shared the profits with him.
Who are the perpetrators? Fraud Triangle
Almost anyone can perpetrate financial abuse of the elderly, perhaps mostly shockingly this can include even the closet of family members, such as spouses, children or grandchildren, carers and those in a position of trust and responsibility.
Most people won’t commit fraud unless there is a really good reason. After all, most people are inherently good – however, people are not perfect. They can easily fall to subject to being in the wrong place at the wrong time. They need to perfect conditions to commit fraud.
Criminologist Donald R. Cressey created the fraud triangle that outlines the three conditions that lead to higher rates of fraud. We have applied this here as financial or elder abuse is an example of fraud.
Motivation + Opportunity + Rationalisation = Fraud
Individuals need to be ‘motivated’ in order to commit fraud. This might be that there is a sudden change in someone’s financial circumstances could lead to them committing fraud. They could do it out of spite if they feel wronged, particularly as family grievances can run deep. They may feel they need to in order to put food on the table or to keep up with the Robinsons (or Kardashian’s). Furthermore, they may have mismanaged their own money or business.
Once an individuals is motivated they also need the ‘opportunity’ to commit it, as without an opening nobody would be able to commit the fraud. This is how family members often have an advantage for committing financial abuse, as we mostly treat them with trust and openness. For example, some vulnerable individuals will share there pin with ‘trusted’ family members so they can go do their shopping for them.
Lastly, even when some is motivated and has the opportunity they often need one last thing to push them over – they need to be able to ‘rationalise’ their actions. Most individuals will choose not to act unless they can justify why their actions are ‘okay’. As even when everything else falls in place, they usually wouldn’t want to do it if they meant they were harming someone else. Common rationalisations include, ‘x-family-member does it too’, ‘they have enough, this won’t be missed’, ‘it’s one of the perks’, ‘it’s my inheritance anyway’ etc.
What are the warning signs?
As with a lot of things, the biggest red flag is change. Especially, when it’s unexpected. Often by the time we’ve reached an elderly age we have reached a fairly predictable life – in terms of our spending and income patterns, the routines we have and who is helping us. Any sudden and expected changes should be treated with caution as they may indicate financial or elder abuse.
Obvious indicators
- Frequent and significant withdrawals from ATMs or bank transfers between accounts that the individual cannot explain.
- A change in the amount of cash being withdrawn each week when their spending habits haven’t changed for many years.
- Additional names on banks accounts or benefit payments.
- Appearance of previously uninvolved relatives or ‘close friends’.
- An increase in the amount of cash in the house.
- Unpaid bills.
Subtle indicators
- Increasing reluctance to talk openly about family or friends.
- Increasing isolation or avoidance of once-usual social contact.
- Increasing reluctance to spend money, for example, to heat their home or to buy food.
- Increasing timidity, nervousness or lack of self-confidence.
What should you do if you suspect financial abuse?
Always act sensitively when you have suspicion of financial or elder abuse, as not acting in this why may cause offense and cause them to withdraw from you. Broaching the topic is easiest when you have a strong relationship. There are various courses of action available, depending on this issues at hand, at Nicholls Law we are always on hand to answer your queries and point you in the right direction.
We’d always recommend that you seek legal advice, but is it important to consider the extent of the alleged abuse -is a simple one-off error or is it a pattern? If the claims of abuse are brought to you by others, check the credibility and motivations of those bringing the claims too.
For urgent help, you can contact the police, Adult Social Care, or Office of the Public Guardian (OPG).
Furthermore, there may be several steps going forward that can minimise the likelihood of financial abuse, such as apply for a Lasting Power of Attorney or a Court of Protection Deputyship order.
*Notice: This blog does not constitute legal advice*
References:
Age UK (2015) Financial Abuse Evidence Review. Available at: https://www.ageuk.org.uk/globalassets/age-uk/documents/reports-and-publications/reports-and-briefings/money-matters/financial_abuse_evidence_review-nov_2015.pdf
Law Society (2020) Close to home: Spotting elder abuse. Available at: https://www.lawsociety.org.uk/en/topics/blogs/close-to-home-spotting-elder-abuse
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