Protecting Seniors with Dementia from Financial Fraud

They say money can’t buy happiness — but when dementia enters the picture, it can certainly buy confusion, stress, and a front-row seat to potential financial exploitation.

In this publication, we're uncovering a rising threat that doesn’t come in the form of flashy phishing emails or overseas robocalls. It starts much closer to home — in the minds and lives of our aging loved ones, especially those experiencing cognitive decline. Let’s dive in.

Older adults with dementia are especially vulnerable to financial exploitation — and the threat grows as their cognitive abilities decline. Understanding how to protect them financially, while preserving their independence and dignity, is critical.


How It Works:

  1. Dementia impairs financial judgment. This can start with missed payments or risky purchases and escalate to complete vulnerability to scams.
  2. Scammers and even caregivers may exploit confusion. Some fraudsters pose as helpful professionals or family friends. Others are caregivers with too much access.
  3. Traditional protections like Power of Attorney (POA) aren’t enough. POA doesn’t stop the elder from accessing their own accounts — even if they’re being manipulated.
  4. Exploitation can happen gradually or suddenly. It may begin with overspending or escalate into drained accounts and lost savings through fraud or coercion.


Who’s Targeted:

  • Adults over 65, especially those showing early signs of dementia
  • Individuals with Alzheimer’s disease or related cognitive conditions
  • Elders with limited family oversight or multiple caregivers
  • Families unaware of how to manage finances alongside a diagnosis


Real-Life Example:

A caregiver in Ohio helped manage a woman’s daily activities while she navigated the early stages of dementia. Her family trusted the caregiver with minor financial tasks — like picking up groceries or paying utility bills — but didn’t monitor account access closely. Six months later, they discovered thousands had been withdrawn from the woman’s account, with purchases made for the caregiver’s own family.

Despite having Power of Attorney, the woman still had full access to her account, and the caregiver was never listed — making prosecution difficult.


Why You Should Care:

Dementia doesn’t just rob people of memories — it can leave them financially exposed, especially during stages where they still appear “mostly fine.” And sadly, exploitation often comes from those closest to them, including hired caregivers, distant relatives, or even well-meaning family members unaware of the risks.

The cost? Lost life savings. Legal battles. Family rifts. Deep emotional damage. And the worst part? Most of it is preventable with early planning.


How to Protect Your Loved One:

• Simplify financial management.

Consolidate accounts, automate bills, and separate spending from savings using prepaid cards or separate bank accounts. This makes oversight easier while preserving independence.

Limit access for caregivers.

Set up accounts with restricted access. Use “view-only” settings or require dual signatures for large transactions. Don’t allow broad access unless it’s absolutely necessary — and even then, limit it.

Secure key documents.

Centralize legal, medical, and financial paperwork in a locked file cabinet (for those who prefer physical copies) or a secure cloud storage (for tech-savvy families).

Have a neuropsychologist evaluate decision-making capacity.

They can determine if your loved one can still make financial decisions and guide you on when to step in more firmly. These evaluations carry legal weight.

Work with the right professionals.

Elder law attorneys can help establish legal protections. Financial advisors trained in dementia cases can guide asset protection. Geriatric care managers can coordinate everything in between.


Quick Tips & Updates:

Quick Tip #1: “Did you know? 1 in 10 older adults over age 60 experiences some form of financial abuse — and dementia triples the risk.”

Pro Tip: “Start early. Don’t wait until signs of confusion set in. Establish protections and monitor financial activity at the first hint of cognitive decline.”

Update: Many banks now offer “Trusted Contact” designations — allowing institutions to alert you if they notice suspicious activity, without breaching privacy rules.


Stay safe, stay informed.


Keywords Defined:

Dementia – A group of symptoms affecting memory, thinking, and social abilities that interfere with daily life, often linked to conditions like Alzheimer’s disease.

Power of Attorney (POA) – A legal document that gives someone the authority to act on another person’s financial or medical matters.

Financial Exploitation – The illegal or improper use of an elder’s money, property, or assets.

Conservatorship – A legal process where a court appoints someone to manage the financial affairs of someone no longer capable of doing so.

Trusted Contact – A person designated by the account holder who a financial institution can reach out to when suspicious activity is detected.


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