How Our Seniors Are Getting Ripped Off
Every year, thousands of older Kiwis lose money to fraudsters, friends, and even trusted relatives. Hanny Naus, of Age Concern New Zealand, explains what’s happening.
19 October 2021
Elder abuse is often hidden in our communities and can be complex. Its effects range from physical abuse and neglect, to psychological abuse.
All forms of abuse are devastating – but, sadly, one of the most common is financial abuse.
Financial elder abuse is people using the money, property or personal resources of an older person improperly, illegally or without authority.
It might be one of their children sneaking money out of their bank account, or using their bank card without their knowing or agreeing.
Or it could be when someone prevents an older person from using their own money or assets the way they want to.
‘Friends’ and family might be manipulating or threatening older people to force them to pay money, give away assets, lend money, or sign them up as a guarantor for a loan that’s never repaid.
Family members might move in with older parents or grandparents, and use up power and water, food and alcohol, but not pay anything towards the costs.
Effects can be devastating
Anyone can be tricked into giving away money, but for older adults, the consequences of financial abuse can be devastating.
They no longer work, they’re on fixed incomes, and they have no way of replacing the money or possessions that have been taken from them.
At Age Concern, we regularly see the devastating effects of financial elder abuse. We talk to older people deprived of their homes, life savings, security, independence, and lifestyle.
How to avoid being a victim
Prepare older people you know by warning them of the possibility that someone they trust might take advantage of them.
Tell them, before making any financial decisions, to take time to carefully consider all the options.
They should consider the long-term consequences for themselves and their own future financial needs, particularly if they have been asked to offer their homes as a guarantee for a loan.
In a worst-case scenario, they might face a loan default in the future, and have their home sold out from under them.
They should always seek a second opinion from outside their family or friendship circle first. If they’re lending money to someone, make sure they have a legally signed-off written contract, with repayment agreements written in detail.
When they’re having work done, in their home, around their property or to their car, they should ask for written quotes and guarantees. Check with others to see if the prices they’ve been quoted are fair. Pay only when they receive a formal invoice, and get a receipt.
If they’re ill, and they ask other people to pay their bills, they should give clear written instructions, including asking for receipts and proof of payments. If their illness is ongoing, they should arrange automatic bank payments.
Enduring Power of Attorneys
One way of ensuring that an older person’s needs will be met in the future if they can’t make decisions for themselves is to set up an Enduring Power of Attorney now.
When older people are considering setting up Enduring Powers of Attorney or family trusts, get independent legal advice before making any promises or signing any documents.
There are particular complications where an older person is part of a blended family.
Anyone re-partnering and trying to sort out their financial affairs is best to review all their existing financial arrangements.
They should be open with all blended family members about their decisions, to reduce the possibility of elder abuse coming out of inter-family disputes.
Look out for scammers
Thousands of New Zealanders lose millions of dollars to fraudsters every year. Netsafe reported that New Zealanders lost NZ$12,512,999 in the first quarter of 2018 alone.
The worst thing you can do is be complacent and think scams only happen to ‘stupid’ people. Scams can affect anyone. There have been cases where victims were lawyers, police officers, teachers, professors, and chief executives.
If you get a request on the phone for personal, financial, or banking information such as pin numbers and passwords, refuse and hang up the phone.
If you get online requests for personal, financial or banking information, delete without responding. Don’t give out pin numbers or passwords. Always keep your pin numbers and passwords safely hidden from view.
Don’t send money to someone you’ve never met and if you haven’t personally initiated the contact, even if they seem trustworthy.
Published 29 February 2019
This article does not contain any financial advice and has not taken into account any particular person’s circumstances. Before relying on it, we recommend you speak with a financial adviser. This story reflects the views of the contributor only. Content comes from sources that we consider are accurate, but we do not guarantee that the content is accurate.
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