There are many ways for scammers to take advantage of everyday Americans, and for the most part, people are prepared to protect themselves against them. Most of us know not to wire funds to strangers or give our financial information out over the phone. We recognize how scammers work for the most part and take measures to protect ourselves.
But unfortunately, seniors aren’t quite as savvy. Senior financial abuse robs the elderly of $36 billion each year. Even worse, 90 percent of people committing financial abuse against the elderly are family members, friends, or trusted individuals. So how do you protect yourself or a senior you know against financial abuse? It’s important to learn to identify the problem, recognize signs of when it’s occurring, and take preventative steps to protect yourself and your loved ones.
Let’s start by categorizing elderly financial abuse. It’s defined as “fraudulent or otherwise illegal, unauthorized, or improper act or process of an individual, including a caregiver or fiduciary, that uses the resources of an older individual for monetary or personal benefit, profit, or gain, or that results in depriving an older individual of rightful access to, or use of, benefits, resources, belongings, or assets.” Summed up, it’s taking advantage of a senior’s finances against their knowledge or will.
Here are some red flags for senior scamming:
- Strange bank account activity, like large, frequent, or unexplained withdrawals, loans, or transfers, opening or closing accounts, or wiring large sums of money.
- Interlopers who suddenly become an elderly person’s best friend and “help” them with their finances, even taking them to the bank.
- A suddenly empty bank account.
- Unpaid bills.
- Suspicious-looking checks that might be forged.
- The elderly person avoids discussing the problem out of shame or confusion.
- Unexpected or unexplained shifts, like new powers of attorney, a new will, changes to a trust or sending bank statements to a new address.
- Loss of finances or property.
Of course, financial fraud comes in many forms, and these are just some of the signs to look for.
Now that you know what elderly financial fraud can look like, here’s how you can protect yourself and your loved ones from it.
- Stay connected. Isolation makes you vulnerable, so find a family member or trusted friend who can help you monitor your financial situation and estate planning.
- Make sure your financial assets are secure and your legal wishes are documented.
- Keep things simple by streamlining your accounts as much as possible so they’re easier to monitor.
- Shred receipts, bank statements, and unused credit card offers.
- Never give away personal information, like your Social Security Number or bank account number, over the phone unless you made the call and you trust the person you’re talking to.
- Never pay a fee or taxes to collect sweepstakes or lottery winnings.
- Take your time with financial decisions and signing documents. Get information in writing, share the information with a trusted partner, and if necessary, consult with a financial advisor or attorney.
- Befriend your banker so they can flag any suspicious account activity.
- Beware of people trying to threaten, rush, or intimidate you into giving them control of your finances.
- Trust your instincts. If something doesn’t feel right, don’t do it. Alert family, close friends, or the authorities.
If you suspect or experience elder financial abuse, start by having a conversation with your elderly loved one, or if you’re the victim, with your family. If your suspicion is confirmed, report the abuse to your bank and police. They’ll help stop it and prevent it from happening again. Then reach out to Adult Protective Services in your town or state for help.
Ashar is a nationally licensed, independent resource for financial professionals and fiduciaries, helping them unlock the value of existing life insurance assets for their clients who no longer need or want their life insurance policy. We do not sell insurance or offer financial planning services. We’re here to help your clients confidently take the next step toward a secure future.