Banks have a critical role to play in helping to stop the growing problem of financial elder abuse
The Banking Code of Practice requires banks to be vigilant for signs of abuse, but a recent report suggests many are falling short
Australia’s Age Discrimination Commissioner has warned that reforms to power of attorney arrangements are long overdue
The Banking Code of Practice confers a duty on banks to be on the lookout for signs of financial elder abuse, which is a major problem in Australia. Most of the perpetrators are the grown children of the victims.
When a child of an elderly person asks them to act as guarantor for a loan and legal advice is not obtained, for instance, the code requires that the guarantee document is signed by the parent without the child present. The guarantor is also asked to consider what they’re getting into for three days before the agreement is finalised.
The problem with the Banking Code of Practice is that it’s strictly voluntary
The Australian Banking Association (ABA) – the peak industry body representing banks – writes and publishes the code and has also instructed its members that they have a critical role to play in preventing financial abuse through power of attorney arrangements, where children take control of their parent’s financial assets. These legal instruments are all too easily weaponised against the parents who sign off on them.
But the problem with the Banking Code of Practice is that it’s strictly voluntary. The ABA encourages members – which includes all major banks and most smaller ones – to follow it. But there is no real punishment for those that don’t.
Financial elder abuse can range from using a parent’s credit card for personal expenses to taking control of their home through psychological coercion, with many other examples in between.
The most common form is when the perpetrator (usually the victim’s child) pressures the older person into loaning them or giving them money or into signing over a home or other significant asset.
Another form of financial abuse might be when an adult child doesn’t honour an agreement to contribute to rent, food or aged care expenses.
According to a 2021 study conducted by the federal government’s Australian Institute of Family Studies, men and women over 65 experience financial abuse in roughly equal measure. It affects about 2% of this age group. The study found that this translated to between 67,500 and 100,100 senior Australians having experienced some form of financial abuse in the six months prior to the reporting period.
Urgent reform to enduring power of attorney laws is needed to prevent the financial abuse of older persons
Australia’s Age Discrimination Commissioner, Robert Fitzgerald
A large-scale 2024 Parliamentary inquiry into financial elder abuse found that banks should be on the forefront of preventing it. Its final report estimated that the social and financial costs run to several billion dollars every year.
And financial elder abuse is a growing problem. The latest Australian Bureau of Statistics numbers indicate there were 4.4 million Australians aged 65 or older as of 2022, a number that’s expected to more than double by mid-century.
In June 2024, Australia’s Age Discrimination Commissioner, Robert Fitzgerald, warned that lawmakers should take a fresh look at power of attorney arrangements.
“With the largest intergenerational wealth transfer in Australia expected to take place in the coming decades, urgent reform to enduring power of attorney laws is needed to prevent the financial abuse of older persons and make it easier for people to be educated about their rights and responsibilities under these documents,” Fitzgerald said.
Gaining access to a parent’s assets through power of attorney arrangements is often a gateway to financial abuse.
Poor code compliance
The Banking Code of Practice may be voluntary, but once a bank signs up to it, they’re technically – but not legally – obligated to comply. The lack of legal enforcement is a critical factor. In February this year, the body tasked with making sure banks follow the code – the Banking Code Compliance Committee (BCCC) – reported that only 23 of 88 banks it reviewed have adequate information about financial elder abuse online or a dedicated webpage.
“Financial elder abuse frequently occurs out of sight, and many cases go unreported because people may feel ashamed, fearful, or may not even realise it is happening,” says BCCC chair Ian Govey.
“Clear, accessible information on the issue matters. It can help customers, carers, and the wider community understand risks, recognise concerns, and know where to seek help.”
Financial elder abuse frequently occurs out of sight, and many cases go unreported because people may feel ashamed, fearful, or may not even realise it is happening
BCCC chair Ian Govey
The Customer Owned Banking Code Compliance Committee (COBCCC) also took part in the review, since its code of practice also calls for banks to be vigilant for signs of abuse.
Chair Danielle Press says financial elder abuse “is complex, and older Australians deserve meaningful protections that uphold their dignity and rights”. She also called for information and guidance to be “supported by robust internal systems, staff training, and procedures that enable banks to actively identify, prevent and respond to abuse”.
But neither committee recommended banks be held accountable following the report. Instead, they “encouraged all banks to reflect on their current practices and consider ways to strengthen the protection and support they offer to older customers experiencing vulnerability”.
The BCCC doesn’t have the power to issue fines, but will call banks out publicly for serious breaches of the code and issue formal warnings. Such ‘sanctions’, however, probably go unnoticed by most bank customers, unless they’re in the habit of reading BCCC announcements.
In July 2024, for instance, the BCCC sanctioned ANZ Bank for continuing to charge fees to people who had died, and for being aware of the issue but not taking action to stop it for a year.
In January 2025, it named and shamed Bank of Queensland for also overlooking the fact that the accounts they were charging fees to belonged to people who were no longer alive.
The 65 banks that lacked adequate information and guidance on how to spot and deal with financial elder abuse were not named in the BCCC report.
National Seniors Australia CEO Chris Grice tells CHOICE that the transition to digital banking has made financial elder abuse easier to perpetrate.
“As the institutions where financial elder abuse can happen within their doors, banks do have a responsibility to help prevent elder abuse, though this doesn’t fall on their shoulders entirely,” Grice says.
“Financial elder abuse can also happen within people’s own homes and residential aged care settings, for example. This is one of the concerns with the loss of face-to-face banking services due to branch closures or the transition to ‘tellerless branches’ with only concierges to direct customers to ATMs.”
Financial abuse is one of the most common and damaging forms that elder abuse can take
Council on the Ageing CEO Patricia Sparrow
“Bank tellers are trained – and do an excellent job under challenging circumstances – to recognise signs of financial elder abuse, such as coerced signatures on loans. These signs are hard to identify online.”
CEO of the advocacy organisation Council on the Ageing Patricia Sparrow says “financial abuse is one of the most common and damaging forms that elder abuse can take. And while not limited to older people, we know it affects millions of Australians and costs the economy $11 billion a year. That scale alone is enough to drive stronger preventative action”.
The personal and familial nature of financial elder abuse – the third most common form behind psychological abuse and neglect – makes it a particularly hurtful crime, says Chris Grice.
Older people fall victim because they don’t expect a loved one to take advantage of them
National Seniors Australia CEO Chris Grice
“Banks and financial institutions have a clear responsibility to help stop this harm before it happens by identifying suspicious activity, responding to unauthorised transactions, strengthening account security and ensuring safe and independent access for older people to manage their money,” Sparrow says.
“As opposed to scams that are committed by strangers, financial abuse often involves a person in a position of trust coercing or forcing an older person to sign over assets or to change a will or power of attorney, stealing money or taking credit cards.”
“Older people fall victim because they don’t expect a loved one to take advantage of them, can’t stop it, or are too embarrassed to seek help. It’s incredibly sad and financial loss in later life is particularly devastating.”
Andy Kollmorgen is the Investigations Editor at CHOICE. He reports on a wide range of issues in the consumer marketplace, with a focus on financial harm to vulnerable people at the hands of corporations and businesses. Prior to CHOICE, Andy worked at the Australian Securities and Investments Commission (ASIC) and at the Australian Financial Review along with a number of other news organisations. Andy is a former member of the NSW Fair Trading Advisory Council. He has a Bachelor of Arts in English from New York University. LinkedIn
Andy Kollmorgen is the Investigations Editor at CHOICE. He reports on a wide range of issues in the consumer marketplace, with a focus on financial harm to vulnerable people at the hands of corporations and businesses. Prior to CHOICE, Andy worked at the Australian Securities and Investments Commission (ASIC) and at the Australian Financial Review along with a number of other news organisations. Andy is a former member of the NSW Fair Trading Advisory Council. He has a Bachelor of Arts in English from New York University. LinkedIn
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