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Financial Fraud: Individuals with special needs can easily be taken advantage of




Financial fraud is among the fastest growing types of abuse, and individuals with disabilities are particularly vulnerable.


In most cases, it involves exploitation by someone known to the victim, but in plenty of scams strangers target individuals with disabilities and the elderly online, by phone and through other means.


In the first instance, a family member, caregiver or other close associate takes advantage of the victim’s trust in order to raid their finances. This can take many forms, from convincing them to extract cash from an ATM, to manipulating them to grant them financial power of attorney, to outright theft of valuables and other assets. They may accomplish this through deception or threats.


Schemes from unethical outsiders are also notorious. Lonely individuals may fall prey to online romantic interests who are suddenly in need of financial assistance. Phone callers may claim to represent a government agency, demanding credit card information. Phishing schemes may send e-mails that appear to be from a bank in order to acquire account passwords.


Less Likely to Complain

These abusers realize that targeting someone with a disability makes it less likely that their crimes will be reported. Individuals with special needs are often overly trusting and may not realize that they are being victimized. If they have a cognitive disability, this makes it even more unlikely that a financial predator will be caught.

There are other reasons individuals may not complain: they may have difficulty communicating their concerns; they may worry that they will not be believed; or if they are being preyed upon by people on whom they depend or with whom they have a strong emotional connection, they may be reluctant to tell others about the betrayal. They may be relatively isolated so that their situation is not readily apparent to others, including medical providers, bankers and others who are required by law to report suspected abuse.


Abuse of Trust

There are numerous cases of trusted individuals who exploit the legal and fiduciary responsibilities granted to them. A financial power of attorney (POA) is meant to protect individuals who cannot handle economic decision-making on their own. However, in the wrong hands, the POA can turn into a blank check, with the agent cashing out bank accounts or retitling real estate. Individuals with special needs may be manipulated into signing a POA and may do so without reading or understanding it.


Trustees have enormous latitude with regard to the assets they manage, the misuse of which can be financially devastating. Designating a trust protector to monitor and, if necessary, remove, a wayward trustee can be an effective way to prevent improper behavior.


Guardians and conservators have been known to take advantage of those for whom they are responsible. Given the broad authority granted to a guardian and conservator, it is best for families to plan ahead and choose someone they trust, rather than leaving it to a court to appoint someone in an emergency situation. In 2010, a federal study criticized courts across the nation for the manner in which they screen and monitor guardians and conservators.


Similar problems have plagued the Social Security Administration and its Representative Payee program. These fiduciaries, usually family members or close friends, handle Social Security payments on behalf of those claimants who cannot manage their cash benefits by themselves. Recent legislation seeks to tighten the selection process and increase monitoring.

Spotting Abuse

The following are signs that someone may be the victim of financial abuse:

  • The individual becomes increasingly isolated.

  • The agent or caregiver suddenly acquires costly items.

  • Missing cash, valuables or financial statements.

  • Lavish spending, monetary gifts to others, transferring of assets.

  • Unpaid bills or termination of utilities.

  • Finances are suddenly handled by others, without explanation.

  • Unexplained changes to estate documents.

What to Do

If you suspect that someone is being financially abused, there are steps you can take.


If the victim lives alone, with family, an aide or in an unlicensed facility, contact Adult Protective Services (APS). The National Council on Elder Abuse maintains a database of all state APS contacts, which can be accessed by calling the Elder Care Locator service at 1-800-677-1116 during regular business hours, or by visiting https://eldercare.acl.gov/Public/Index.aspx.


Original Article: The Voice, by Elizabeth L. Gray, Esq: Vol. 13, Issue 3

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