Financial Exploitation by Someone You Trust
Financial exploitation by a relative, caregiver or agent is harder to spot than a stranger's scam, because the person already has access. Here are the signs and the protections you can set up.
Exploitation by a family member, caregiver or someone holding power of attorney is harder to catch than a scam call, because the person already has legitimate access. Watch for unexplained withdrawals, sudden changes to a will or power of attorney, a new "friend" involved in the finances, missing belongings, and isolation from family and friends. Two protections apply: brokerage firms must ask customers to name a trusted contact person they can call if they suspect exploitation, and the 2018 Senior Safe Act protects financial institutions that report it.
Our guide to Social Security and Medicare scams covers strangers posing as government agencies, and our guide to suspected elder abuse covers reporting. This article is about noticing exploitation while it is going on, when the person responsible has a key, a login or a signed power of attorney.
Why this is different from a stranger's scam
A power of attorney (POA) gives someone legal authority over another person's finances, either broadly or for stated purposes. In most families it works as intended. It also means the agent has account access, a reason to be signing documents, and a ready explanation for any one transaction.
A stranger has to trick someone into giving access. A trusted person already has it. That makes the misuse hard to see from outside, and sometimes hard for the account holder to recognize.
The warning signs
One sign alone proves nothing, since family finances change for ordinary reasons. Several together deserve attention:
- Unexplained withdrawals or transfers that do not match the person's usual spending.
- Sudden changes to a will, power of attorney or beneficiary designation with no marriage, death or new diagnosis to explain the timing.
- A new "friend," caregiver or online relationship who becomes involved in money matters quickly.
- Missing belongings, unpaid bills or a lower standard of living when income and assets should cover expenses.
- Confusion or vagueness about recent transactions, or reluctance to discuss finances.
- Secrecy or isolation. A caregiver or relative limits contact with other family, friends or the person's financial advisor.
- Pressure to sign documents quickly, without an independent attorney reviewing them.
The protections that already exist
Trusted Contact Person (FINRA)
Since 2018, FINRA rules require brokerage firms to ask every customer to name a trusted contact, someone the firm can reach if it suspects exploitation. That person gets no access to the account.
Temporary Disbursement Holds
FINRA Rule 2165 lets a broker-dealer place a temporary hold, generally up to 25 business days, on a disbursement it reasonably believes is exploitative, to allow time to investigate or involve authorities.
Senior Safe Act (2018)
Federal law that protects banks, credit unions, brokers and insurance companies from liability when they report suspected senior financial exploitation to law enforcement or Adult Protective Services in good faith.
What It Doesn't Cover
These protections apply to banks and brokerages, not to every financial relationship. Family and friends still need to pay attention.
Safeguards to set up before there is a problem
- Name a trusted contact on each bank and brokerage account. It is free and takes a few minutes. Choose someone other than the person who holds the power of attorney.
- Turn on account alerts for large withdrawals and transfers, and consider read-only access to statements for a second family member.
- Build checks into the power of attorney. An attorney can draft it to require regular accounts to a third person, to name co-agents, or to limit gifts.
- Keep more than one person informed. Exploitation is much harder when several relatives or a professional see the finances.
- Check credit reports once a year for accounts the person did not open.
Our article on power of attorney, guardianship and advance directives explains the documents.
What to do if you're seeing these signs
- Ask specific questions first. "I noticed three transfers to an account I don't recognize. What were they for?" There is often an ordinary answer, and an accusation can shut down the conversation.
- Talk to the older person alone, if you can.
- Tell the bank or brokerage what you have seen. They can review activity and may be able to hold a transaction.
- Report it. Adult Protective Services takes reports of suspected exploitation, whoever is responsible. Reach your state's agency through the Eldercare Locator at 1-800-677-1116. The National Elder Fraud Hotline, 1-833-372-8311, helps adults 60 and older with financial exploitation.
- Get legal advice if a power of attorney, will or guardianship is involved. Use an elder law attorney who is independent of the person holding the POA. The National Academy of Elder Law Attorneys directory at naela.org is a starting point. A person who still has capacity can revoke a power of attorney at any time.
Frequently Asked Questions
What is power of attorney abuse?
It is when someone holding a financial power of attorney uses that authority for their own benefit instead of the account holder's: unauthorized withdrawals, moving assets into their own name, or spending the money on personal expenses. Because the agent has legal access to the accounts, it can be harder to spot than an outside scam.
What are the warning signs of financial exploitation by a trusted person?
Unexplained withdrawals or transfers; sudden changes to a will, power of attorney or beneficiary designation with no clear reason; a new "friend" or caregiver involved in financial decisions; missing belongings or unpaid bills despite adequate income; confusion about recent transactions; and isolation from family and friends.
What is a trusted contact person on a bank or brokerage account?
It is a person, separate from anyone with power of attorney or account access, whom a bank or brokerage can contact if it suspects financial exploitation. FINRA rules in place since 2018 require member firms to ask every customer to name one. It costs nothing and gives that person no access to the account.
Can a bank freeze an account if it suspects elder financial exploitation?
Under FINRA Rule 2165, a broker-dealer can place a temporary hold on a disbursement, generally up to 25 business days, if it reasonably believes exploitation is occurring. The 2018 Senior Safe Act separately protects banks and other financial institutions that report suspected exploitation to authorities in good faith.
Where do I report suspected financial exploitation by a family member or caregiver?
To your state's Adult Protective Services, which you can reach through the Eldercare Locator at 1-800-677-1116, or to the National Elder Fraud Hotline at 1-833-372-8311. If documents such as a power of attorney are involved, an elder law attorney can review them. The National Academy of Elder Law Attorneys (NAELA) can refer you to one.
This article explains general warning signs and federal consumer protections related to elder financial exploitation as of October 2026 and is not legal advice. Every family's situation is different. Consult Adult Protective Services or an elder law attorney about an actual case.