Definition

Child Financial Abuse is the misuse of a child's identity or assets for personal gain. It is often overshadowed by physical and emotional abuse causing it to be underreported. The impact is devastating on children's lives.

Three Common Forms

1. Parental
2. Teen Dating
3. Identity theft

Parents have easy access to children's personal information and finances. Because of this, it is difficult to detect and resolve parental financial abuse. According to EndCan, this abuse is not malicious in every situation. Sometimes parents are in horrible financial situations, such as having a crappy credit score and piles of immense debt. Therefore, parents use children's clean slates to obtain loans, credit cards, or to make big purchases they could not before. Mostly, these bills are left unpaid and that is why it ruins a child's financial life before it fairly begins. Many teenagers have their own income from working. Therefore, financial abuse can be an apparent issue when they date. According to EndCan, money management and dating are new experiences to teens; therefore it can be hard to understand what is healthy and unhealthy. Some indicators include: one partner must pay for all dates, one partner must ask permission to use their own money, one partner must give the other partner access to their money, and one partner is limited or not allowed to work. It is vital for parents to teach teens red flags of financial abuse and abuse in general. Identity theft affects children 50 times more than other groups of people. Thieves do the same things as parents. They take out loans or get credit cards in the child's name and never pay off the debt. According to Dawson Place, "this form of abuse is the hardest to detect early on, but can be the most financially damaging" (2021).

Signs

1. Child pays bills
2. Child is punished for spending money
3. Child receives mail about payments
4. Child has a credit report
5. Child has no access to their money
6. Child is threatened with money

Impact

Most children do not know they have been financially abused until their adults. It will be extremely difficult to obtain huge accomplishments, such as buying a house or even renting an apartment because landlords look at credit scores. Also, the money still has to be paid to lenders; that is why it is vital to contact them, tell what happened, and work out payment arrangements or luckily get the debt completely cleared.

Definition

Like children, the elderly are extremely vulnerable to financial abuse. Psychiatrist.com uses the broad definition of financial abuse from the National Center for Elder Abuse. It is "the illegal or improper use of an elder’s funds, property, or assets including, but not limited to, misusing or stealing an older person’s money or possessions, coercing or deceiving an older person into signing any document (eg, contracts or will), and the improper use of conservatorship, guardianship, or power of attorney." The definition shows both sides of the abuse, fraud and exploitation.

Common Stories

The U.S. Department of Justice shares common stories of elder abuse. The first is exploitation by family, close friends, or neighbors (i.e. spousal fraud, identity theft by adult child, theft by guardian, misuse of a power of attorney, theft by friend and promised exchanges, etc). Secondly, exploitation by trusted professionals which involves investment fraud by financial advisor or tax preparers, forgery by caregivers, etc. Lastly, exploitation by strangers, including internet identity theft, fraud by “new sweetheart,” the "grandparent scam,” “home repair scam,” and “lottery scam.” The website goes in depth about the specific examples that may relate to you or someone you know.

Signs

1. Sudden changes in bank accounts
2. Additional authorized uses on credit card
3. Unauthorized withdrawals from ATM
4. Abrupt changes of will or related documents
5. Unexplained missing funds and valuable items
6. Unpaid bills despite having the available funds

Impact

According to psychiatrist.com "financial abuse of elders is underreported." Annually, $2.9 billion is lost from financial abuse. Many elders depend on fixed incomes from government assistance and/or retirement savings. This means the ability to live their independent routines are ruined when someone takes advantage. Financial abuse not only affects elders, but their families also. Family members may have to step in to take care of the victim and work to fix the issue. This can cause many burdens, but financially, families are paying more money in bills and basic necessities than before. Ultimately, victims result in nursing homes or hospitalization and die prematurely because of the abuse and potential neglect from family and caregivers. Mortality rates of victims of elder abuse are "comparable" to victims of caregiver neglect, which is the highest mortality rate of all types of abuse. The National Library of Medicine states "Elder abuse (EA) affects one in six older adults, and financial EA, a common subtype, severely impacts victims and society. Again, there is limited of evidence because this type of abuse goes underreported. However, the National Library of Medicine conducted an experiment and went in great detail on their website. In result, "Financial abuse-only cases had the lowest prevalence of vulnerability and risk factors. Most of these factors, and a familial relationship, were significantly more common in cases involving other EA types. Findings indicate that financial abuse, occurring in isolation, is distinct from other EA types." According to the outcome of the experiment, the National Library of Medicine states financial abuse is a distinctive type of abuse and should be separated when documenting other EA types.

Description

According to the National Network to end Domestic Violence (NNEDV), financial exploitation is a common tactic abusers gain power and control in an intimate relationship. Research shows that it happens in 99% of domestic violence cases, and it decreases the chances of a victim's security after leaving the abuser. The abuse may be subtle or extensive, but the impact has the same affect on victims. Some tactics are concealing information, limiting the victim's access to assets, or reducing accessibility to family finances. Along with the other types of abuse, financial abuse, is committed to entrap the victim. Financial abuse can happen throughout the relationship or especially when the victim tries to escape. This type of abuse is considered the most powerful when trying to keep the victim in the toxic situation.

Signs

In some cases, financial abuse begins "very charming" but it is only to manipulate the victim. For example, the abuser may offer a weekly allowance so the victim can take a break from the stress of working. Victims get comfortable and begin trusting that the abuser loves them and merely wants to help. Ultimately, the allowance decreases sooner than later, and it is too late by the time victims want to gain back control over their finances. In other cases, ones that are more overt, abusers will commit, but are not limited to, this list:

1. manage all funds
2. add debt to joint accounts
3. hide assets
4. withhold money
5. not allow victim to access bank accounts
6. refuse to contribute income
7. forbid victim from working
8. harass or stalk victim at their workplace
9. force victim to file fraudulent tax returns
10. force victim to write bad checks
11. refuse to pay or evade child support

Impact

There are short- and long-term effects of financial abuse. In short-term situations, financial access is vital for the victim's safety. Without funds, survivors are often unable to afford safe housing; therefore, homelessness is a realistic fear they may have. After escaping a long-term situation, survivors have ruined credit scores, sporadic employment histories, and legal issues. This makes it difficult to gain back independence and security.