9.6 Financial elder abuse may often involve taking or spending funds held in an older person’s bank account. Legal Aid NSW told the story of Doris, an 83 year old pensioner who found she had a large outstanding balance on her credit card:
Doris was easily confused and her memory was not good. … Doris said she had not received any credit card statements for some time but she knew how much she was putting on her card and made sure she made the payments every month. [Her bank statements showed that] the amount and frequency of transactions on her credit card increased dramatically over a short period. … The statements also showed a marked change in the usual pattern of transactions. For example, there were large online purchases and large cash advances, when Doris had never obtained a cash advance on the card before, nor was aware it was possible.
9.7 The Hervey Bay Seniors Legal and Support Service provided examples of the types of elder abuse that it had observed:
The older person lives with the abuser and has given them authority to access their bank account, either by giving them the card or through internet banking access. The account is used to pay household expenses and to make cash withdrawals. Often the older person has no knowledge as to the extent of the use of their funds, especially as with internet banking, bank statements are no longer posted through the mail. The use of the funds continues after the older person goes into care and is often only picked up when nursing home fees are not paid.
The older person has difficulty getting to a bank and gives the abuser access for the purpose of withdrawing funds for them. The abuser withdraws funds for their own use.
The older person authorises use of a credit card for a specific purpose but it is then used for other purposes.
9.8 Some of these examples suggest that online and mobile banking may present challenges for some older people on the ‘wrong side of the digital divide’. No doubt such technology is very convenient for many older people, as it is for most of the rest of the population. These technologies may allow many older people to monitor their accounts more actively and in their own homes, and thus better protect themselves from financial abuse. Advances in fraud detection technology may be another valuable safeguard against abuse. However, some older people may be unfamiliar or uncomfortable with internet and mobile banking and other people may take advantage of this.
9.9 Concerning the broader context of this topic, COTA submitted that there were:
generally low levels of financial literacy among older people, and particularly older women;
growing complexity in the operation of banking;
accelerating change of banking business practices and product offerings;
a shift to online transactions; and
a reduction in physical bank branch offices and numbers of staff available to assist older customers in person or on the telephone.
9.10 Poor health, remote living and poverty in the community are among the factors that may make some older Aboriginal and Torres Strait Islander people more vulnerable to financial abuse. The Top End Women’s Legal Service (TEWLS) told the story of Queenie, a 70 year old Indigenous woman living outside a regional centre with family who help care for her:
Queenie is frail, with multiple significant health issues and disabilities. In addition, she has been diagnosed with psychological disorders as a consequence of five decades of domestic violence that included multiple physical assaults causing multiple physical impairments, as well as multiple sexual assaults.
Queenie’s family accesses her bank account via her pin number, often without her consent. Queenie feels unable to regain control of her bank account; she does not know how to change her pin number, does not have a relationship with her financial institution, speaks limited English, and cannot communicate with her financial institution without assistance.
9.11 TEWLS also wrote about Margaret, a 50 year old Indigenous woman who suffered significant health problems. Her husband and carer ‘assists her to conduct her financial matters, but also uses her key card without permission to purchase items for himself and often retains Margaret’s key card’.
Financial literacy and other ways to protect yourself
9.12 The ALRC recommends that banks be required to do more to stop the financial abuse of older people, but recognises that there are limits to what banks are able to do to stop some types of financial abuse of older people by trusted family, friends and carers. For example, some financial abuse will be difficult for a bank to detect: will banks know when a carer, who buys groceries for an older person using the older person’s credit card, adds a few items of their own to the shopping cart? Furthermore, some methods of detecting financial abuse, even if possible, might be considered too intrusive.
9.13 Customers will therefore continue to need to monitor their accounts and take an active interest in their own finances. Financial literacy is itself a safeguard from abuse, and some stakeholders noted the importance of government initiatives to improve people’s financial literacy. Alzheimer’s Australia said that to prevent financial abuse, ‘older people require targeted, consumer-friendly information to support their financial literacy’. The Financial Services Council submitted that such initiatives were particularly important for women and people from culturally and linguistically diverse backgrounds. TEWLS recommended ‘increased community financial and legal education to reduce the prevalence of Indigenous elder abuse’.
9.14 It will also remain important for people to plan for the possibility that in the future they may have limited ability to manage their own finances. In 2016, it was estimated that over 400,000 Australians have dementia, which for some will make managing their own finances difficult or impossible. People may need to consider appointing a trusted family member or friend to help them manage their financial affairs and protect them from abuse by others, should they later need such help.
9.15 This chapter proposes additional safeguards against financial abuse, but the ALRC is mindful of the need not to create new rules for banks that might in fact be a burden, not only for other bank customers, but for older people and the people who care for them. One submitter told the ALRC that he could give ‘myriad examples’ of the way ‘inflexible procedures or unhelpful staff can multiply the work required by a carer’.
Legal Aid NSW, Submission 140. Legal Aid NSW argued that ‘the bank should have seen the “red flags” and contacted Doris to confirm whether she was aware of this unusual activity on her account. Big Bank agreed to waive the debt’: Ibid.
Hervey Bay Seniors Legal and Support Service, Submission 75.
COTA, Submission 354.
Top End Women’s Legal Service, Submission 87.
Ibid. Another stakeholder told the story of a terminally ill elderly man who had given his partner access to his ATM card and pin number, and when he died, ‘his partner cleaned out his ATM account’: National Aboriginal and Torres Strait Islander Legal Services, Submission 135.
On financial literacy more generally as a crucial strategy to reduce elder abuse, see ch 3.
Alzheimer’s Australia, Submission 80.
Financial Services Council, Submission 78.
Top End Women’s Legal Service, Submission 87.
Laurie Brown, Erick Hansnata and Hai Anh La, ‘Economic Cost of Dementia in Australia 2016–2056’ (National Centre for Social and Economic Modelling for Alzheimer’s Australia, 2017) 6. See also ch 2.
Although guardianship powers, powers of attorney and other such arrangements are also sometimes abused, as discussed in chs 5 and 10.
S Dunlop, Submission 220.