Older New Zealanders are often less computer-savvy and more trusting than younger people. Increasingly, unscrupulous friends or relatives are taking advantage of that. Here are some Age Concern New Zealand tips to protect yourself from financial abuse.
How many are affected?
Last year, 1,736 cases of elder abuse were identified by Age Concern, more than half of them financial abuse. These people were deceived, pressured, or manipulated out of their money and possessions.
Who can become a victim?
Anyone. Elder abuse is where an older person is harmed through the actions of people they trust. No one’s immune. It affects those who own a great deal, those who own very little, and all those in between who have managed to save and invest enough to cover their needs for their own retirement years.
What’s the impact?
Most financial elder abuse is not obvious to an outsider. Yet it can have crippling effects on older people’s hopes, lifestyles, activities, physical or mental wellbeing, and family relationships.
Many people are ashamed of discussing their personal experience of financial elder abuse with their friends, let alone in public. They feel foolish or hurt that a person they know, trust and rely on has taken items from them or not repaid money they’d loaned them.
Would your older neighbours tell you that they were selling their house to rent a small cottage in a cheaper area because their son used their online banking accounts to pay for his gambling? Would you know that the kind older couple across the road don’t go on holiday any more because their granddaughter lives with them while she is studying, pays no board and is using their car and bank card for her own social life?
Loaning money to family
Parents often say they’ll support their loved ones, without considering the longer-term implications.
They might offer to help their adult children with their first-home loan deposits, be a guarantor on their mortgages, give them interest-free loans to start a business, or pay for private school fees, music lessons or sports trips for grandchildren.
But when there’s a family break-up or when the business fails, money isn’t repaid and external agencies call in the debt from the guarantor – what happens then?
Need or greed?
In our society, people expect to inherit their ageing parents’ assets. But, sometimes, adult children have a sense of entitlement about what they stand to inherit in the future, rather than ensuring their parents use their money for their own needs or pleasure.
Whether it’s need or greed, people who perpetrate elder financial abuse are hurting those who can’t recoup financial losses at their time of life.
How to prevent financial abuse
· Even if it feels embarrassing, it’s better to seek independent advice as soon as you suspect you’ve been ripped off by a scam or by a family member, friend, neighbour or paid carer.
· Asked for a loan? Say you’ll need a legal signed-off contract with repayments on it, talk to your lawyer, and tell other family members. Seek a second opinion. Be very wary about agreeing to be guarantor for a mortgage or a loan. It could destroy your future finances.
· Someone running errands for you? Never give them your pin numbers or passwords. Check bank statements to make sure all the withdrawals are ones you’ve made.
· Computer safety: Regularly review security for your online information and bank accounts.
· Too good to be true? Don’t believe letters, emails, or phone calls offering great deals, inheritances or prizes.
· If someone calls, emails or asks online for personal, financial or banking information, stop! Don’t give it. Say you need a minute to get the paperwork. Ask for their name, physical address, and phone number, then hang up. Check them out before calling their head office, or ask someone to check them out for you.
· Asked to help family or friends in a crisis? Give short-term help only. Decide whether to keep supporting them after the crisis has lessened. Maybe someone else can help later.
· New financial venture? Discuss options and seek second opinions. Ask why that ‘fantastic offer’ has to be signed up immediately.
· Always ask for written quotes and invoices for work around your home. ‘Moonlighting’ or ‘cash jobs’ leave you open to manipulation and abuse.
· Giving money to one of your children? Make sure other family members know and talk about what this might mean for any future inheritance. Put agreements in writing.
· Writing your will or setting a power of attorney? Outline your reasoning to stop possible family disputes leading to abuse of a surviving partner.
· Re-partnering? Think about all your existing and future financial arrangements, mortgages, loans, wills, enduring powers of attorney, insurance policies, advanced directives. Be open with new family members about your choices, to decrease elder abuse during inter-family disputes.
If you or someone you know has questions about elder abuse they can get in touch with their local Age Concern for free and confidential advice and support, or phone police.
First published 23 May, 2018
JUNO does not contain financial advice as defined by the Financial Advisers Act 2008. Consult a suitably qualified financial adviser before making investment decisions. This story reflects the views of the contributor only. Content comes from sources that JUNO considers accurate, but we do not guarantee that the content is accurate.