Financial exploitation happens when someone is deceived or coerced into handing over monetary funds or assets.
It can happen through fraud, blackmail, accumulating debts, or having money or property stolen. It also includes situations where someone feels pressured into handing over money or property.
Financial exploitation can happen online, via email, telephone, post, or in person. Face-to-face financial exploitation may be perpetrated by doorstep callers or by people known to the individual, such as family, friends and carers.
Financial exploitation often involves grooming. Perpetrators may seek to befriend someone and establish a relationship of companionship and trust. This relationship may then be used to gain access to the person’s money and property.
People can be financially exploited for a number of reasons:
- to gain control of someone’s money or property
- to gain power and control over someone – for example in a domestically abusive relationship
- as part of wider exploitation – for example, becoming indebted to a county lines drug gang or being a victim of labour exploitation and having your wages confiscated by your employer.
Financial exploitation can have a huge impact on people’s standard of living, and mental and physical health. They may struggle to afford daily living costs, bills and rent, and may be forced to take out loans to meet the financial demands of the perpetrator. They may feel stressed, anxious, depressed and fearful, and may find it more difficult to look after their, or others’, health and wellbeing.
- Forms of financial exploitation
Scams – deceiving someone into handing over money or assets through falsely promising them a product, investment or relationship. Scams are designed to groom victims into believing that the offer is trustworthy and will provide a worthwhile reward.
Money laundering – forcing someone to keep hold of funds accumulated from criminal activities, for example by transferring these funds into their bank account. People who are perceived to be short of money may be targeted by money launderers. This can include people who are not in work or are receiving a limited income. Students and young people may also be targeted as they are often perceived to have limited financial resources.
People who are experiencing other forms of exploitation may be forced to launder money. For example, someone involved in county lines activities may be forced to store the money accumulated from drug sales in their own account to divert suspicions away from main actors.
People may be given a criminal record unless recognition is given to the coercive circumstances under which they have been forced to launder money.
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 people to make repayments. Loan sharks will often appear friendly and trustworthy until repayments are missed. Because of this, people often hear about loan sharks through family or friends, who are themselves unaware of the exploitative nature of the loans.
Debt – people who are financially exploited may accumulate debt. This could happen through taking out an unregulated loan; being forced to take on others’ debts; or being left without enough money for day-to-day expenses.
Control over financial assets – this can include restrictions on day-to-day spending; being forced to give others access to bank accounts and savings; or being forced to give others money or property. It can be a feature of domestically abusive relationships and financial guardianship arrangements (these are established when someone is unable to manage their financial assets, for example by appointing a power of attorney).
Blackmail – using the threat of harm or embarrassment to force someone to hand over financial assets or take on another person’s debts.
- 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 seventy-four
- fifty-three percent of victims are aged sixty-five and over (Chartered Trading Standards Institute, 2018)
The most common form of scam-related financial exploitation is banking and payment card fraud (ONS, 2018). However, as only five percent of scams are reported, the true scale of financial exploitation is largely unknown (Chartered Trading Standards Institute, 2018).
People who fall victim to financial exploitation often feel embarrassed or guilty, making them less likely to report the incident. Perpetrators also target vulnerable people, who may not realise that they have been financially exploited or feel able to report what has happened.
‘Suckers lists’ are used by scammers to identify people who may be easier to exploit. These lists include the details of individuals who have previously been the victim of a scam. They are shared between fraudsters, resulting in the repeated targeting and exploitation of vulnerable people.
Opportunities for financial exploitation are increasing, in part due to the growth of online communication, banking and shopping. Scams are also becoming more sophisticated, with fraudsters developing the capabilities to create convincing websites, letters and official documents. An increasing elderly population, many of whom may be isolated or may have cognitive impairments, is creating more targets for exploitation.
- Factors increasing vulnerability to financial exploitation
Financial exploitation can happen to anyone. However, certain factors can increase the likelihood of being targeted by, and becoming a victim to, financial exploitation:
- being elderly
- becoming more dependent on others – for example, receiving practical or emotional support
- experiencing a challenging life event, such as loss of employment, a divorce, or a bereavement
- experiencing difficulties when managing money – for example, due to a lack of financial assets, a learning difficulty or a cognitive impairment
- experiencing illness, disability or a long-term health condition
- experiencing isolation and loneliness – people may value the social contact offered by perpetrators of financial exploitation (social contact and offers of friendship often form part of the grooming process).
- having a cognitive impairment (those who are elderly and have reduced cognitive function are particularly at risk)
- having caring responsibilities – especially if the person someone cares for has been a target of financial exploitation
- having financial difficulties, such as a low or reduced income, or limited savings
- lacking mental capacity
- previous experience of being financially exploited – the person may be viewed as a vulnerable target
- receiving help with managing finances – this can include situations where others have been handed control over financial assets, such as a power of attorney
- being vulnerable to, or a victim of, modern slavery (especially labour exploitation)
- being involved in drug consumption, trafficking or dealing, including county lines activities
- being involved in a gang.
- Locations where financial exploitation takes place
People can be targeted by financial exploitation in a range of situations and locations, including:
- care settings, including residential homes
- the doorstep – especially through postal scams and door-to-door sales people
- the home
- the internet and email
- the telephone
- the workplace – for example if someone is the victim of labour exploitation
- gang membership – gang members may financially exploit someone as a means of exercising power and control.
- Signs that someone is being exploited
Common signs that someone is being exploited include those listed below. Please note that this is not an exhaustive list and that warning signs will show themselves differently in each person. It is important to explore all concerns over someone’s behaviour and personal circumstances and to consider whether they could be signs of exploitation.
Appearance, behaviour and personal circumstances
- experiencing a sudden deterioration in health, wellbeing, independence, standard of living or ability to manage finances
- appearing more withdrawn, stressed or anxious
- mention of a new ‘friend’ – this friendship may have been established on the telephone or online
- mention of helping a friend, relative or acquaintance through giving them money.
- changes in bank account funds, including unexplained withdrawals
- control of finances moving to a family member or other responsible adult, especially if this has been done without explanation or consent
- inclusion of additional names on bank accounts
- sudden changes to, or the creation of, a will or other financial document
- unpaid bills or rent, despite having the financial means to do so.
Other observations and circumstances
- attempts made by care giver to isolate someone from their family and friends
- disappearance of someone’s money, personal belongings or financial documents
- noticing that someone has difficulty understanding or explaining their current financial situation, especially if this has changed
- presence of another person when someone makes financial transactions of withdrawals
- purchasing or receiving items which, considering someone’s personal or financial circumstances, seem unsuitable or excessive
- receipt of an unusual amount of mail, emails or telephone calls
- signatures on cheques or official documents that do not look like the person’s signature, or which have been provided by someone who has difficulty writing.
- Case study
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 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 paying his 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.
More case studies can be found in the following documents and websites:
- Links between financial exploitation and other forms of exploitation
Financial exploitation may accompany other forms of exploitation, abuse and violence. For example, financial exploitation can be a feature of modern slavery, sexual exploitation and county lines activity, and may be used to control the victim and prevent them from leaving the exploitative situation. This is particularly the case if someone accumulates debt, as the need for greater funds to repay the debt can draw them deeper into exploitation.
Financial exploitation can escalate into other forms of exploitation, abuse and violence. For example, if someone has become indebted to another person, the lender may threaten violence if the debts fail to be repaid, or may demand work or sexual favours as recompense.