Financial exploitation happens when someone is deceived or coerced into handing over monetary funds or assets to others.
It can happen through fraud, blackmail, becoming indebted, or having money or property stolen. It can also involve being pressurised to hand over money or property, regardless of whether the victim does so.
Financial exploitation can happen online, via email, telephone, post, or in person. Face-to-face financial exploitation can be perpetrated by doorstep callers, or by family, friends, acquaintances or carers.
People are often groomed before being financially exploited. Grooming may involve the perpetrator ‘befriending’ the victim and creating a relationship of companionship and trust. This relationship is then used to gain access to the victim’s money and assets.
People generally exploit someone financially in order to gain control of their monetary assets. They may also use financial exploitation as a way of gaining power and control over the victim, for example in a domestically abusive relationship.
Financial exploitation can have a huge impact on someone’s standard of living and mental and physical health. They may struggle to pay for bills, rent, food and essentials, be forced to sell or remortgage their house, or take out loans to fund the financial demands of the perpetrator. They may experience high levels of stress, anxiety, fear, shame and depression.
This, and preoccupation with financing the demands of the perpetrator, may make them neglectful of their own health and wellbeing. Indeed, financial exploitation is a major contributory factor to the decline in health of older people.
Forms of financial exploitation
Scams – means of deceiving someone into handing over money or assets through offering the false promise of a product, investment or relationship. Scams rely on someone choosing to respond to or participate in these offers, so they often groom the victim into believing that the offer is trustworthy and will provide a worthwhile reward.
Money laundering – forcing someone to use their own bank account to store the funds made by criminal activities. People who are short of money are particularly vulnerable to being targeted (including students and people who are not in work or who are receiving a limited income), as are people who are victims of wider criminal exploitation.
For example, someone who has become involved in county lines activities may be forced to store the funds made from drug sales in their own account to divert suspicions away from the main actors. People who are forced to launder money may end up with criminal records unless the coercive circumstances in which were made to do so are recognised.
Unregulated loans – loans offered by companies or individuals (including ‘loan sharks’) to people who have an urgent need for money and cannot borrow from a bank or building society. These loans usually require little or no paperwork and have very high interest rates which victims find difficult to repay.
Intimidation, threats and violence may be used to force the victim into making repayments. The ‘loan shark’ will often appear friendly and trustworthy until repayments are missed, and because of this people often hear about these ‘sharks’ through the recommendations of family or friends.
Debt – acquiring debt because of financial exploitation. Someone may acquire debt through taking out an unregulated loan, or by being forced to take on the debts of others. They may also develop debt if, through being coerced or deceived into handing over money to others, they are left without enough money to fund their day-to-day living. If this is the case they make take out a loan to compensate.
Control over financial assets – this can include restrictions on day-to-day spending, being forced to give another person access to savings and accounts, or being forced to hand others money or property. This form of financial exploitation could be perpetrated by fraudsters through a scam, or through individuals known to the victim, such as family, friends or carers.
It can also be a feature of domestically abusive relationships or occur if an individual takes advantage being given guardianship (for example, power of attorney, or a more informal arrangement) of the financial assets of someone who is unable to manage their financial assets themselves.
Blackmail – forcing someone to (in this context) hand over financial assets or take on another person’s debts through using the threat of harm or embarrassment.
National and local context
Financial exploitation can affect anyone, but within the UK older people are disproportionately affected:
- the average age of a victim is 74
- 53% of victims are aged 65 and over (Chartered Trading Standards Institute, 2018)
The most prevalent form of scam-related financial exploitation is banking and payment card fraud (ONS, 2018). However, only 5% of scams are reported in the UK, and the true scale of financial exploitation as a whole is largely unknown. (Chartered Trading Standards Institute, 2018).
This is partly because people who fall victim to financial exploitation often feel embarrassed or guilty, making them less likely to tell family, friends or the authorities. Perpetrators also target those who are most vulnerable and may not realise that they have been financially exploited or have the means to report what has happened.
People who have become the victim of a scam may be stored on ‘suckers lists’. These are lists of individuals perceived to be vulnerable to financial exploitation. These lists are circulated between fraudsters which can result in those most vulnerable to financial exploitation being repeatedly targeted and exploited.
Opportunities for financial exploitation are increasing, in part due to the growing use of the internet and online communications, including for financial transactions. Scams are also becoming more sophisticated. For example, fraudsters can create very convincing looking websites, letters and official document.
An increasing elderly population, many of whom may be isolated or experience cognitive impairments, has also created a growing number of targets for financial exploitation.
Financial exploitation can happen to anyone (indeed, it is believed that 48% of adults in the UK have been targeted by scams, Office for Fair Trading). However, certain factors can increase the likelihood that someone will be targeted, and become a victim to, financial exploitation:
- being elderly
- having a cognitive impairment (those who are elderly and have reduced cognitive function are particularly at risk)
- lacking mental capacity
- having difficulty managing money or paying bills. This may involve confusion over understanding and handling money, difficulty understanding bill payment process, or difficulty paying bills on time. Someone in this situation may be at risk of losing their utilities or facing legal action for unpaid bills.
- being in a situation where others assist with, manage or control someone’s finances, formally or informally – this could be due to illness, injury, learning disability, physical disability, or impairment
- receiving practical or emotional support from another person, such as a carer, family member of friend.
- having reduced independence
- experiencing isolation or loneliness – people may come to value the social contact offered by someone seeking to financially exploit them, particularly if they establish regular contact as a means to groom the victim into handing over money. Even if the victim realises that they are being exploited they may find it difficult to take action against the perpetrator because of the value placed on the social contact accompanying the exploitation.
- having a low income or limited savings, or having experienced a drop in income
- having experienced a challenging life event, such as a bereavement, divorce of loss of employment
- having previously been the victim of a scam – this person may become ‘known’ to fraudsters as vulnerable target, making it more likely that they will be repeatedly targeted
- being a victim of modern slavery (for example labour exploitation), which can involve losing control of earnings and other finances
- being vulnerable to labour exploitation (for example if someone has recently arrived in the UK and is looking for work)
- being involved in drug consumption, trafficking or dealing, including county lines activities
- being involved in a gang.
People can be targeted by financial exploitation in a range of situations and locations. These commonly include:
- the internet and email communications
- the doorstep – postal scams and door-to-door sales people
- the telephone
- an individual’s home, residential home, and other locations where people receive help for care and support needs.
- the workplace, if an employer is controlling an employee’s salary
- being part of a gang – gang members may make the person ‘indebted’ as a means to exert control.
Signs of exploitation
Changes to appearance, personality and personal circumstances:
- experiencing a sudden deterioration (in health, wellbeing, capacity to live independently, standard of living, or ability to manage finances).
- appearing more withdrawn, stressed or anxious.
- mention of a new ‘friend’ who they have met in person, via telephone or online – may mention that they have been giving money to this ‘friend’ to help them out.
Changes to financial circumstances:
- changes in bank account funds, including unexplained withdrawals
- inclusion of additional names on bank account
- family members or another responsible adult taking complete charge of someone’s finances, especially if without explanation or consent
- sudden changes to, or creation of, a will or other financial document, especially if unexplained.
- unpaid bills or rent, despite having the financial means to do so.
Other suspicious circumstances:
- receiving an unusual amount of mail, emails or telephone calls
- purchasing or receiving items which seem unsuitable or excessive, considering the person’s personal circumstances
- noticing that another individual is always present when someone makes financial transactions or withdrawals
- noticing signatures on cheques or other paperwork that do not look like the person’s signature, or which have been written when the person has difficulty writing
- noticing that someone is unable to explain what is happening to their finances
- disappearance of someone’s money, personal belongings or financial documents
- care giver attempting to isolate someone from their family and friends.
This is not an exhaustive list of the signs presented by people who are being exploited and warning signs will present differently in each individual.
It is important to assess your concerns within the context of someone’s wider behaviour and personal circumstances and to raise concerns over anything that does not feel right.
Norman was 85 years old and was a carer for his wife, who had dementia.
Norman started receiving telephone calls from some people about an opportunity to pay money into an overseas lottery scheme. The scammers made regular contact with Norman and he came to view them as friends who wanted to help him out.
He referred to them as ‘bankers’ and started paying them money, believing it would enable him to one day win the lottery. With his wife ‘s condition deteriorating she required care home admission, and Norman intended to use his eventual winnings to financially support them both.
Norman’s friends and family became aware that he was paying money to these ‘bankers’, and were concerned that he was being exploited by a scam. With the help of professionals they tried to explain to him that he was being financially exploited. However, Norman continued to view the scammers as friends and remained convinced that he would eventually win the lottery that he believed he had been paying into.
Norman kept to transferring huge amounts of money into the lottery scam. This included his wife’s money which, due to her illness, he had accepted responsibility for managing. One several occasions the scammers persuaded him to travel to London to deposit money in back-street sex shops.
Due to the large payments he was making to the scammers, Norman started to accumulate debt. He became overdrawn on his bank account and developed debts with the local authority when he stopped repaying care home fees. He also stopped paying utility bills, further increasing his debt.
When Norman’s wife passed away Norman continued to pay into the lottery scam, now using her inheritance. He still believed that he would win the lottery, and intended to donate this money to ‘good causes’. He eventually began seeking advice regarding releasing equity from his house in order to keep paying the scammers.
Family, friends and professionals remained highly concerned for Norman. Despite their attempts to help him understand that he was being exploited he had continued to send money to the scammers. It became clear that without multi-agency interventions Norman risked being stripped of all his financial assets. The decision was therefore made to refer Norman into adult safeguarding. This enabled actions to be taken to safeguard him from the scammers.
This case study is based on a number of real cases which have occurred in Devon. In the interest of confidentiality all names and other identifying features are fictional.
Additional case studies can be found in the following documents and websites:
The wider picture
Financial exploitation may be accompanied by other forms of exploitation, abuse and violence. For example, modern slavery, sexual exploitation and county lines exploitation can all involve someone else gaining control of a victim’s earnings, forcing them to engage in an exploitative situation in return for receiving financial ‘rewards’, or forcing them to acquire debts. In these contexts financial exploitation is used by the perpetrator to exert control over the victim and keep them in the exploitative situation.
Financial exploitation can also escalate into other forms of exploitation. For example, if someone has become indebted to another person the lender may threaten violence if the debts fail to be repaid, or demand work or sexual favours as recompense.
Cycles of exploitation and victimisation can therefore emerge, with increasing debts (and the need for greater funds to repay them) and fears for their own or others’ safety making it difficult for people to remove themselves from the exploitative situation.