We’ve all heard stories about financial abuse targeting elders and the bad news is it’s only getting worse. Elder financial abuse includes scams and other exploitation targeting the savings of people ages 60 and older. Many of us may think, “it won’t happen to my family” or “my relative is too smart to fall into that trap”, but watch out because it’s happening more often than you may think.
These assumptions are only wishful thinking. Fraud is on the rise, so it’s important to talk to your loved ones about what to look for and how they can protect their finances. Encouraging them to utilize the services of a financial planner that can proactively review and track their finances may also be a good way to assure that all their financial matters are looked after.
More common than you think
The U.S. Department of Justice’s Elder Justice Initiative offers a sobering statistic. In the United States alone, studies have found that between 3-5% of seniors endure financial abuse by family members every year. Unfortunately, this form of exploitation is one of the most frequently reported means of elder abuse.
It’s important to talk about money, but sometimes it can be uncomfortable to talk about real financial issues with family. However, open discussion is often the best first step toward guarding against financial abuse. Find out the information you need to know in the event of a sudden calamity. Questions to ask include:
- Where are the important documents kept - i.e. bills, deeds, and wills?
- Who are the professionals you work with – accountants, lawyers, financial advisors, etc?
- What investment accounts do you have?
- Who has access to your financial accounts?
You will also want to have a conversation about when and under what circumstances they would like for you to step in and handle their finances for them. Estate planning documents such as a power of attorney for financial decision making can help.
Trouble takes many forms
Not all financial trouble that elders experience is a sign of abuse. Maintaining open and clear communication is a great help. Look for unpaid bills piling up, creditor notices, and suspicious activity on their bank accounts. With help from technology you can even setup automatic alerts to notify you of suspicious or larger than usual transactions.
There are many scams out there that target the elderly and many of them come via telephone calls. There are scammers who pose as officials from a sweepstakes, lottery or some other contest. They claim that your loved one is in line to receive a prize. Others will pretend to be from the IRS and threaten legal action over some long-forgotten overdue balance. The real IRS only sends notices via regular mail, but that can be easily forgotten when dealing with a wily and confrontational con artist. Another scam on the rise are fraudsters posing as tech support in order to gain access to computers and other devices which may contain sensitive information like bank records or logins to financial websites.
Talk about these scams with your parents and loved ones, help the to increase their awareness. Make sure they understand that they shouldn’t give out Medicare or Social Security numbers. Remind them to always be certain before signing anything, particularly legal documents, contracts, and anything to do with making an investment. If you don’t already know the people who handle financial matters for your parents or loved ones suggest arranging a meeting. If necessary, ask your parents to instruct their financial advisors to work with you under certain circumstances.
There are several resources to keep you, your parents and loved ones aware of fraud. Stay informed of both new scams and instances of elder financial abuse in your area. StopFraud.gov offers a number of resources and tips for identifying and reporting the financial exploitation of elders. The AARP website also features a Fraud Watch program and offers an interactive national fraud map that can look at specific reports and alerts from law enforcement.
With careful planning and communication, you can make a real effort to protect your parents and other members of your family from an embarrassing and costly set of circumstances.