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Financial Exploitation, Undue Influence, Fraud

David M Godfrey


  • Distinguishing between financial exploitation, undue influence, and fraud in the realm of elder law is crucial for precise legal analysis.
  • Financial exploitation involves the unauthorized use of a vulnerable adult's money or property for another's benefit, while undue influence centers on exerting control with the intent to alter the individual's choices.
  • Fraud, on the other hand, encompasses intentional lies or misstatements to induce reliance for someone else's gain.
  • While fraud and undue influence may be tools in financial exploitation, they can also occur independently.
  • Careful consideration of the specific elements for each term is vital, as using them interchangeably can complicate legal proceedings and hinder addressing the underlying maltreatment.
Financial Exploitation, Undue Influence, Fraud

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There are fine lines of difference between financial exploitation, undue influence, and fraud. The exact definitions will vary from state to state, but in general terms, here are some guidelines for determining what term most accurately fits the act:

  • Financial exploitation is the unauthorized use or taking of the money or property of a vulnerable adult for the benefit of another person.
  • Undue influence is the exertion of influence, over a vulnerable adult, with the intent to override or change the choice or free will of the person, for the benefit of another person.
  • Fraud is a theft involving an intentional lie or misstatement of the fact, with the intent that the person relies on it to the benefit of another person.  

Both undue influence and fraud are tools used in financial exploitation – but exploitation can occur without undue influence or fraud. A lot of financial exploitation is simply outright theft.  Lies or intentional misstatements may be used by an undue influencer – combining fraud and undue influence, but often the person exerting undue influence does not rely on lies or material misstatements. Undue influence can be exerted by telling the truth such as “If you don’t give me what I want, you will never see your grandchildren again,” – lacking the necessary elements of fraud. A fraud may also be described as a theft by deception. Fraud does not require a vulnerability on the part of the victim, both financial exploitation and undue influence do.  Fraud and financial exploitation do not require the element of a person in a position of power or influence. Very capable persons are sometimes victims of fraud. These are complex and overlapping concepts. The law requires specific elements for each cause of action. Careful analysis before labeling an act enhances credibility.   

Vulnerability Person in a Position of Power of Influence Intentional Lie, Or Material Misstatement of Face Theft or Use of Money or Property for the Benefit of Another
Financial Exploitation Required Optional Optional Required
Undue Influence Required

Must have capacity
Required Optional Required
Fraud Optional Optional Required Required



While related and sometimes overlapping, it is important to use these terms with precision. When the terms are used interchangeably, it triggers many lawyer brains into trying to discern the facts and elements, distracting from moving forward on the maltreatment that has taken place.