Confessions of an Estate Planner: Part 7 Crimes Against The Elderly

Unconscionable, Criminal and Invisible

Taking advantage of the old, frail and vulnerable members of society is more prevalent now than it ever was. 

People are living longer, they have more money and many are developing mental illnesses such as Alzheimer’s Disease. 

It’s too easy and they are ripe for the picking.

The property of the victim can be extracted from them by a variety of tried and tested ways including subtle manipulation, physical abuse, mental torture, undue influence, coercion as well as every day garden variety frauds and scams. 

It’s criminal.  Although more often than not the conduct is not reported to the police due to embarrassment, lack of capacity or death.  Even if reported, it is often quite difficult to secure a fraud (or other) conviction due to the required criminal burden of proof (i.e. beyond reasonable doubt) unable to be met.

The conduct is always unconscionable even if a criminal conviction is not secured. Whilst difficult and costly, the civil courts and tribunals can put things right by making orders for damages and costs that penalise the offenders.

And it is mostly invisible. It is happening in your neighbourhood or a retirement village near you every day. Right under your nose.

The Victims

The victims usually have or exhibit one or some or all of the following characteristics:-

• they are lonely (and are desperate for conversation and are eager for the company);
• they are isolated (they do not have a partner or children or other relatives or close friends);
• they have mental or physical disabilities;
• they are suffering from depression;
• they are on medication that affects their cognitive ability;
• they are not familiar with technology or finances;
• they do not speak or understand the language of the country they live in;
• they have had a limited education;
• they have lost someone recently;
• they may be unfamiliar with or confused by matters dealing with money;
• they are frail and weary and have lost interest in leading a productive life.

In short, they are vulnerable and easily taken advantage of.

Apart from being vulnerable, they usually have something worth taking (i.e. money or property).

The Offenders – Pure Slimy Greed in the Time of Addiction

The main categories of offenders are:-

• Strangers;
• Carers and Relatives;
• Johnny Come Latelys;
• Institutions (i.e. financial institutions, trustee companies and aged care facilities)

The one thing the offenders all have in common is that they are all motivated by pure, slimy greed.  Why else would they behave so badly?

There is also often something else affecting their decision making.  The offender whether it be a stranger, carer, relative, blow in or an employee of an institution may have a gambling, alcohol or drug addiction which is controlling their better judgment.

The Stranger’s Methods - Vile Scams and Evil Schemes

Frauds, vile scams and evil schemes generally involve deliberately deceiving the victim with the promise of goods, services, or other benefits that are non-existent, unnecessary, never intended to be provided, or grossly misrepresented.  It happens every day in every city in the world. 

Just watch A Current Affair any night of the week or visit the scamwatch website.  

New scams appear as the wind changes direction.  It only used to be parting with your life savings for some cladding you did not need.  Now, scams involve con men travelling across the world, moving from town to town across the lands, searching for new prey.

The Offenders usually keep the following methods set aside for the frail and elderly:-

• fake prizes and sweepstakes;
• bad or fake “Investments”;
• bogus charity contributions;
• non- necessary home and automobile repairs;
• loans and mortgages with harsh terms (reverse mortgages are particularly distasteful in my view but are actively promoted by the same banks that are now the subject of the Royal Commission);
• health, funeral, and life insurance with no benefits; 
• miracle cures; and
• shonky travel packages. 

In addition to the various types of services or products offered, frauds vary widely in the means used to commit them including telemarketing, mail and even coming into your home.

Successful frauds share common elements. The offenders gain trust and confidence through their lies and charisma by using a business name similar to that of a well-established organisation, or by communicating a concern for the victim's well-being. They create the impression that their victim has been ‘chosen’ or is ‘lucky’ to receive the offer, and that such offers are rare.

They encourage their victims to make an immediate decision or commitment to purchase products or services, which effectively limits the opportunity for consultation with others.

Further, since the ‘special’ offers are available to only a select group of customers, the offenders ask the victims to be discreet and not discuss the details, shrouding the transaction in secrecy and decreasing the chance of discovery by a family member, neighbour, or other concerned party.

The ‘cons’ occur quickly, with little risk of exposure and by the time they are discovered the offender has disappeared.

The Carer’s and Relative’s Methods – The Art of Deceit

Carers and relatives are usually in a position of trust and have an ongoing relationship with their victim.

Often the victim is not aware of what is happening.  I can only think of the case where a Sydney solicitor who was the Enduring Power of Attorney for an elderly and very rich gent.  He dutifully picked him up from the nursing home every Sunday and took him for fish and chips.  As it turned out, the fish and chips were very expensive as he charged his usual hourly rate ($600.00 per hour) for the privilege of his company.

When they are aware of what is happening, the victim usually feels powerless to act as they do not want to lose the support, company and/or care if they make a fuss (in other words they want to maintain the relationship so they accede to being taken advantage of). 

They live in fear. They may fear being sent to an aged care facility.  They may fear being denied access to grandchildren.  They may fear the unknown if they don’t comply.

They have been subtly and gradually manipulated into this position over a long period of time (or worse they have been subject to neglect and/or physical, sexual or emotional abuse or a cocktail of the lot).

It is cruel and hard to fathom how someone could torture another in such a way.

The usual methods include:-

• under the guise of helping the victim with their financial affairs, the offender has their name added to the victim's bank account, allowing the offender to deposit, withdraw, or transfer funds at will;
• simply stealing or using their victim's cash, property (i.e. moving into a house and not moving out) and chattels;
• borrowing money and not paying it back;
• denying services or medical care to conserve funds;
• getting their victim’s ATM pin number and withdrawing funds or buying groceries and the like;
• forcing their victim to gift property, make Enduring Powers of Attorney in their favour or making wills in their favour or have real property transferred to them in joint names so when their victim dies they acquire it by way of survivorship;
• as Enduring Power of Attorneys act in their own best interests and not in the best interests of the victim;
• inducing fear and distrust of others; or
• isolating their victim from family members, friends and support networks (so their work is easier and the victim feels like everyone else has abandoned them).  Simply not passing on messages that people have called usually does the trick.

Distinguishing between an unwise, but legitimate, financial transaction and an exploitative transaction resulting from undue influence, duress, fraud, or lack of informed consent can be difficult.  Suspicious transactions may be well-intentioned but guided by poor advice.

More often than not, financial exploitation involves a pattern of behaviours, rather than single incidents.

There is some protection for victims in Section 87 of the Powers of Attorney Act 1998 (Qld):-

87 PRESUMPTION OF UNDUE INFLUENCE

The fact that a transaction is between a principal and 1 or more of the following—

(a)     an attorney under an enduring power of attorney or advance health directive;

(b)     a relation, business associate or close friend of the attorney;

gives rise to a presumption in the principal’s favour that the principal was induced to enter the transaction by the attorney’s undue influence.

The effect of s87 is that if the offender is an attorney for a victim and they receive a gift of property from the victim they must prove that the transaction was legitimate (i.e. they are presumed at law to have done the wrong thing and must prove otherwise – in effect they are guilty until proven innocent).

Note that paid carers cannot be attorneys in terms of Section 29 of the Act.

Johnny Come Lately – Enter the Gold Digger

How many stories have you heard about the lonely widow/widower who meets a new younger partner who is seemingly only after the money?  The Johnny Come Lately starts as a stranger but soon ends up being a close friend or spouse with their hands on the purse strings.  Much of what was said above applies to this category of offender.

I have encountered too many instances to remember.  One that comes to mind is a rather wealthy elderly gentleman who upon the death of his wife married a mail order bride within 6 months and had a child within 18 months.  On his death his new wife and son (then aged 6) received everything via his will as by this time, he had fallen out with his children and had written them out.  A long costly legal battle ensued that was resolved in favour of the new wife and infant son. 

In another recent case I was involved in, a couple started renting next door to an elderly lady with no close relatives.  Before too long they had abandoned their rented premises moved in with her to ‘look after her’ and within a very short period of time she had re-written her will leaving her property to the couple.  It was the only thing she could do.  The elderly lady died, her original beneficiaries who lived interstate sued and the matter ultimately settled with the offenders receiving some cash to ‘go away’. 

There is no way of preventing this sort of thing happening where you have a lonely person and the new love of their life or pretend carer appears like magic from outer space. 

There are of course many, many genuine people and it is very easy for children and outsiders to get it all wrong.

For more details on this topic please see - Confessions of an Estate Planner: Part 5 Claims of Spouses

The Institutions

Financial Services - Nothing is too good to be true

It is no surprise that Australian financial institutions (particularly banks) are the strongest in the world. 

The Financial Services Royal Commission has only confirmed that when something seems to be too good to be true it probably is a disaster in disguise (waiting to happen).

The Royal Commission is giving us all a daily dose of the types of things our trusted banks, super funds, trustee companies and financial planning firms get up to make even more money.

What is evident is that these firms will do anything to ‘get a deal’ and make even more money by:-

• lending to people they should not lend to (ask any Storm Financial customer – most lost their homes and life savings - about the Commonwealth and Bank of Queensland who readily advanced funds to them that they could repay if the market turned. The market turned with catastrophic results);
• allowing the victim to be a joint borrower with or guarantor of their children (this is called ‘emotional lending’);
• gouging interest and bank fees out of their customers (the Royal Commission has heard evidence about an elderly woman who has been paying off the same $1,000 since the 1990s, and a 72-year-old nurse who was allowed to borrow more than $3,000,000.00 to buy 11 investment properties;
• reverse mortgages (where the older person takes out a loan against the equity built up in a home, with the money given to a child to buy a house or prop up their business;
• charging fees for absolutely no services or charging exorbitant fees for little service or advice.  The five biggest financial institutions – the Commonwealth Bank, NAB, Westpac, ANZ Bank, and AMP – have had to pay or offer customers $222,300,000.00 in refunds and interest for failing to provide personal advice to customers while charging ongoing advice fees in recent years. The amount of refunds is expected to rise to $850,000,000.00 as more skulduggery is uncovered.
• even after you have died they are charging you fees for advice they haven’t given you.

It is disgraceful. I could go on (and on) but all you need do is turn on your radio or TV each day to get more and more examples or revisit part 2 of my confessions written nearly two years ago:-

Confessions of an Estate Planner: Part 2 The Advisors 

Frankie Valli had it exactly right ‘It’s too good to be true…. Can’t take my eyes off of you’. 

Keep a very close eye on your bankers and financial advisors.  If you rob a bank you go to jail.  If a bank or financial advisor robs you, they get a slap on the wrist. Again, ask any Storm customer.

Nursing Homes -  Nurse Ratched's good work continues 

Most of the aged care facilities in the land are of the highest quality and are operated professionally in the best interests of their residents.  Sadly, it is the extreme cases of neglect and abuse that make the headlines and worry their residents, potential residents and their families.

Many are understandably afraid of nursing homes having been suitably scarred by watching Nurse Ratched in One Flew Over the Cookoo’s Nest back in the mid-seventies.

Nursing home neglect and abuse has often been attributed to under qualified and insufficient staff. When staff are not properly trained, or overworked because there are too few workers, the results can be deadly.

Some instances of nursing home neglect and abuse are acts of frustration. The homes try to make a profit by keeping their costs of running to a minimum.  Many are owned by bank-like corporations run by financial controllers, squeezing out every last penny.

Something has got to give. 

Many could be excused for thinking they have been left to die in a concentration camp.

Elder abuse or neglect by staff in care facilities may occur because of:

• workers being burnt out from long shift hours;
• inadequate training;
• staff are not remunerated properly;
• staff may be frustrated with rebellious or aggressive patients.

Neglect is a type of elder abuse defined as the refusal or failure to fulfil any part of a worker's obligations or duties to a nursing home resident. Neglect and elder abuse in nursing homes may also include the failure to provide necessary care. Neglect typically means the refusal or failure to provide a nursing home resident with such life necessities as food, water, clothing, shelter, personal hygiene, medicine, comfort, personal safety, as well as social and emotional neglect.

The Solution

I wish there was an easy one.  Most of the nasty things go unnoticed.

I can only offer this.  When you are in complete control of all of your faculties put in place a plan… one that plans for the worst.  Many focus on getting their wills right.  Whilst that is essential, my view is that your Enduring Power of Attorney (EPA) and Advance Health Directive (AHD) are much more important.  The reason is that you are still alive and someone else is making decisions for you about the way you will live and die and the way your money will be spent or given away.

Whilst they appear to be so, EPAs and AHDs are not simply pro forma documents you pick up at the newsagency and get signed up. 

A lot of thought should go into:-

• who you will trust with making decisions about your personal and health care;
• who you will trust with making decisions about your finances;
• who will succeed your first choice attorney/s (if they become incapable or die);
• any limitations you wish to place on your attorney/s;
• appointing more than one attorney (2 is better than 1) – if you want more than 2 must they act unanimously or by majority or can they act severally?
• will your chosen attorneys have an conflicts of interest (making their job difficult or impossible) – for example your attorney may be in a position to renew a lapsed Binding Death Benefit Nomination made in favour of say a child from a previous marriage.  If they do not renew it the death benefit may be paid to them directly by the super fund.  What will they do?

Apart from the legal planning, putting aside funds and a plan for your care when you are no longer able to look after yourself is very important if possible (this is easier said than done and some just don’t have the resources or consider that they will never find themselves in these circumstances). 

There is also a lot to be said for:-

• structuring your affairs so that if you end up single at some point in the future you assets are protected for your family members;
• putting a lot of time and effort into finding trusted advisors (accounting/financial/legal/medical) who are way younger than you are (i.e. they will still be practising if you ever need help). Again, this is easier said than done.

Help and confidential advice is available from someone like me (I have a special interest in bringing these criminals to justice) or from terrific organisations like these ones:

• Elder abuse helpline
  Information, support and referrals for anyone experiencing abuse or witnessing the abuse of an older person.
  Phone: 1300 651 192
• ADA Australia
  Provides general advocacy support or guardianship advocacy to older Queenslanders experiencing discrimination, harm or abuse.
  Phone: 1800 700 600
• Crime Stoppers
  Information provided by the community assists with crime fighting and crime prevention.
  Phone: 1800 333 000
• DV Connect
  Provides free help for women, men, children, and pets affected by domestic and family violence across Queensland.
  Phone Women's Line: 1800 811 811
  Phone Men's Line: 1800 600 636
• Lifeline
  Counselling services for anyone at any time.
  Phone: 13 11 14
• Office of the Public Guardian
  Protects the rights and interests of vulnerable Queenslanders, including adults with impaired decision making capacity.
  Phone: 1300 653 187