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Financial exploitation: early warning signs

Key points

  • Impaired financial decision-making can be one of the earliest signs of dementia, appearing years before memory loss.
  • Scammers are skilled at targeting people with cognitive decline—stay alert to new 'friends,' donation requests, and phone calls.
  • Gentle, non-accusatory conversations are key to preserving trust while protecting your loved one.
  • Practical tools like automatic bill payments, a safe spending account, and a mail-check routine can reduce risk without taking away independence.
  • Document any suspected exploitation and contact Adult Protective Services or the National Elder Fraud Hotline.
  • You are not alone—support groups and elder law resources are available to help you navigate this challenge.

General caregiving information, not medical advice. Check medications and major care changes with your clinician.

Step-by-step

  1. Start by observing changes in financial behavior without judgment. Watch for signs like giving more money than usual to charities or individuals, buying things impulsively, or showing a sudden interest in gambling or lottery tickets. Note any new subscriptions, memberships, or donations that seem out of character.

  2. Gently ask your loved one about their financial habits in a non-accusatory way. Use phrases like: 'I noticed there are a lot of donation requests in the mail—has anyone been asking you for money lately?' or 'I want to make sure you are feeling okay about your finances. Can we look at the mail together?' This keeps the conversation open and supportive.

  3. Help your loved one set up automatic bill payments for recurring expenses like utilities, mortgage, and insurance. This reduces the chance of missed payments, which can be a sign of exploitation or neglect. If they are already behind, contact the utility company or mortgage lender to discuss payment plans.

  4. Create a simple system for managing mail and phone calls. Sort mail together each week, and set up a 'junk mail' pile for donation requests and scams. For phone calls, consider using a call-blocking service or a phone with a 'do not disturb' mode that only allows calls from saved contacts.

  5. Encourage your loved one to have a trusted person—like you, a sibling, or a financial advisor—added as a co-signer or authorized user on their bank accounts. This allows you to monitor transactions and flag unusual activity. Discuss this with your loved one first, framing it as a safety measure: 'I want to help you keep your money safe so you can enjoy it for years to come.' Before taking this step, consult with an elder law attorney or financial advisor to ensure it is appropriate and legally sound.

  6. If you notice repeated donations to a specific organization, gently investigate. Look up the charity on sites like Charity Navigator or GuideStar to see if it is legitimate. If it is a scam, help your loved one understand by saying: 'This organization is not who they say they are. Let's find a real charity you care about and donate together.'

  7. Watch for signs of online exploitation, such as new 'friends' on social media, requests for money from people they have never met, or sudden interest in online romance. If you see this, have a calm conversation: 'I am worried that someone might be taking advantage of you online. Can we look at your messages together?'

  8. Consider setting up a 'safe spending' account with a limited amount of money for everyday expenses, while keeping larger savings in a separate account that requires two signatures for withdrawals. This protects the bulk of their assets while allowing them to maintain independence. Only set up this arrangement if you have legal authority (such as power of attorney) and your loved one agrees. Review the arrangement regularly with your loved one and their attorney, and discontinue it if they object or if it is no longer needed.

  9. If you suspect exploitation has already occurred, document everything—dates, amounts, names of people or organizations involved—and contact Adult Protective Services (APS) in your state. APS can investigate and provide resources. You can also call the National Elder Fraud Hotline at 1-833-372-8311.

  10. Finally, take care of yourself. Financial exploitation is stressful, and you may feel overwhelmed. Reach out to a support group for caregivers, or speak with a social worker who specializes in elder abuse. You do not have to handle this alone.

What not to do

  • Do not accuse your loved one of being foolish or careless. This will only make them defensive and more likely to hide their actions. Instead, approach with curiosity and concern: 'I noticed something different about your spending—can you help me understand?'

  • Do not take over their finances completely without their consent. This can feel like a loss of control and damage trust. Instead, offer to help gradually, starting with small tasks like sorting mail or setting up automatic payments.

  • Do not ignore small red flags, like a single large donation or a new subscription. These can be early signs of a pattern. Address them early with a gentle conversation rather than waiting for a crisis.

  • Do not assume that only strangers are the problem. Family members, friends, or paid caregivers can also exploit your loved one. Stay alert to anyone who seems overly interested in their finances or who asks for money.

  • Do not rely solely on your loved one's memory or judgment to track their finances. Their cognitive decline may make them unreliable reporters. Use bank statements, credit reports, and mail to get an accurate picture.

  • Do not forget to update legal documents like power of attorney and advance directives. If your loved one still has capacity, work with an elder law attorney to put protections in place. If capacity is declining, act quickly.

Practical tools

  • The 'Mail Check' Routine

    Set a weekly time to sit down together and go through all mail. Use a simple system: a 'keep' pile for bills and important documents, a 'shred' pile for sensitive junk, and a 'donation request' pile. For donation requests, you can say: 'This one looks like a scam—let's throw it away. If you want to donate to a real charity, we can find one together.' This keeps you informed without being controlling.

  • The 'Safe Spending' Account

    Open a separate checking account with a debit card that has a low daily limit (e.g., $100). Transfer a set amount each month for groceries, gas, and small purchases. Keep the bulk of savings in a separate account that requires two signatures or is monitored by a trusted person. This allows your loved one to maintain independence while protecting their assets. Only set up this arrangement if you have legal authority (such as power of attorney) and your loved one agrees. Review the arrangement regularly with your loved one and their attorney, and discontinue it if they object or if it is no longer needed.

  • The 'Phone Shield' Setup

    Use a call-blocking app like 'Nomorobo' or 'Truecaller' to filter spam calls. For landlines, consider a phone with a 'do not disturb' feature that only rings for saved contacts. Teach your loved one to say: 'I do not discuss money over the phone. Please send me something in writing.' Practice this phrase together.

  • The 'Charity Check' List

    Create a short list of 3-5 legitimate charities your loved one cares about. When a donation request comes in, compare it to the list. If it is not on the list, say: 'This one is not on our approved list. Let's skip it and donate to one we both trust.' This reduces impulsive giving while honoring their generosity.

  • The 'Financial Check-In' Script

    Use a gentle, non-judgmental phrase each month: 'I want to make sure everything is okay with your money. Can we look at your bank statement together?' If they resist, say: 'I am just trying to help you stay safe. We can do it quickly.' Keep it brief and positive.

  • The 'Emergency Contact' Card

    Create a small card with phone numbers for Adult Protective Services, the National Elder Fraud Hotline (1-833-372-8311), and your local Area Agency on Aging. Keep it in your wallet and your loved one's wallet. If something feels wrong, call immediately.

Discuss with your clinician

Ask your loved one's doctor about a cognitive assessment if you notice new financial judgment problems—this can help confirm early-stage dementia and guide next steps.

Discuss any medications that might affect judgment or impulse control, such as certain sleep aids or anxiety medications, with the prescribing clinician.

If your loved one has a history of gambling or impulsive spending, ask the doctor about behavioral interventions or referrals to a geriatric psychiatrist.

Inquire about local resources for financial counseling or legal aid for older adults, as the doctor may have referrals to social workers or elder law attorneys.

Ask your doctor: 'Should we consult an elder law attorney before adding a co-signer or authorized user to my loved one's bank account?'

Ask your doctor: 'What are the legal and ethical considerations for setting up a safe spending account, and do we need a power of attorney first?'

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