Protecting Your Elderly Loved Ones from Financial Abuse
Perhaps the most despicable financial abuse is elder abuse and illegal or improper use of a senior’s money, property, or assets. Elders are often targeted due to their inability to recognize or report when they have become victims. Even with these missing reports, 1 in 5 people over the age of 65 do report being victims of financial fraud or abuse, according to a report by US News.[1] These abuses result in United States seniors showing a combined loss of $36.5 billion per year.
Common Targets of Financial Abuse
Scammers target elders who are the most vulnerable, such as those who are disabled either physically or mentally, those who are unaccustomed to handling their finances or those who have recently lost a spouse. Many cases go unreported due to the elderly victim being confused, embarrassed or incapable of reporting. As a caretaker of an elderly loved one, you can be on the lookout for common scams and warning signs and take steps to ensure your loved one is protected as best you can.
Types of Elder Scams to Watch Out For
Scammers are an unfortunately creative and sneaky bunch and their ploys can be the same. Here are some of the most frequently used against elderly citizens that you should be watching for and inform your loved one about:
Medicare Scams. Someone may impersonate a Medicare representative and gain access to the senior’s information, fraudulently bill for services the senior never received, or bill for services then pocket that money. Medicare will never call, email, or visit you to ask for personal information.[2] If you want to confirm the validity of a Medicare issue, call 1-800-MEDICARE. Be sure to check your claims regularly.
Telemarketing. The US DOJ reports that 1 in 6 Americans are led dishonestly into giving away a combined total of $40 billion each year by telemarketers. Of these, 80% are over the age of 50. Scams over the phone can involve fake sweepstakes, lottery winnings, impersonation, fake charities, and more.
Phishing. Phishing is when a person’s information is stolen through the use of fake emails, calls or other contact methods. For example, an email may appear to be from their Internet provider, asking for an update in information, but may actually be a phishing scam from a fake email designed to look recognizable. This scam is used to get ahold of the victim’s identities and info.
Social Security Scams. A caller may claim that the elderly person’s Social Security number is involved in criminal activity, frozen or their identity is at-risk and that they need to confirm the number over the phone, thereby stealing the information. These callers may even spoof the number to match the SSA’s. However, the SSA will never call and ask you to give your SSN, pay anything, or threaten your benefits.[3]
Inappropriate Financial Recommendations. Financial “professionals” may recommend the purchase of expensive products that will not benefit their client, simply for their own profit. For example, they may recommend or pressure the purchase of an annuity that will not mature at an appropriate age for their advantage.
Impersonation of Relative. Some scammers will contact elderly victims and pretend to be a grandchild or relative in need, asking for money.
Internet Fraud. Seniors who are unfamiliar with technology may not notice warning signs when downloading software or clicking on nefarious things online. This may result in a scammer gaining access to the senior’s computer to get personal information.
Warning Signs of Financial Abuse
Many people find that their elderly loved one is reluctant to share “embarrassing” experiences or financial woes, or that he or she is not able to recognize when they are being scammed. If you are concerned that your loved one could be a target, watch out for signs such as these below. While these could all have other explanations, it is worth being on your guard and asking questions when you notice one of these.
Unusual or unexplained bank withdrawals or transfers
Large credit card charges
An individual who has access to their information and property
A new friend or romantic partner, particularly one they have met online and/or send money
Coerced to sign wills and POAs (Power of Attorneys) that they do not understand
Change in beneficiaries
Missing property
Statements that are being sent to another address
Eviction notices or unpaid bills
Not understanding their own financial situation
Not receiving sufficient care despite the ability to pay for it
Ideas of What You Can Do to Help Your Elderly Loved One
The number one thing you can do to help reduce their vulnerability is to be involved. As mentioned before, risk is increased when warning signs go unnoticed, elders are uninformed, or they are unable to report activity. Your presence and partnership with your loved one in the handling of their financials will not only decrease the chance of financial abuse but could also be a profound act of love by you.
Be aware and open. Know that financial abuse of elders happens to many people and it should not be embarrassing for you or your loved one to report. It absolutely should be reported! Call the Adult Abuse Hotline at (800) 222-8000 or contact your nearest Adult Protective Services office.
Plan for regular family financial meetings. Regular conversations among family members who are involved in the finances and care can maintain continual monitoring for suspicious activity and keep everyone up to date on next steps.
Have a family financial management plan. Plan for the future by making note of financial professionals and trusted advisors including lawyers, accountants, financial planners, and advisers. Determine who, if not your elderly loved one, will manage bill payment, account management, and access to accounts.
Encourage them to remain socially active. Isolation increases vulnerability as friends and family are less likely to notice warning signs or changes in behavior and/or situation.
Complete and compile key documents. Grant a financial (durable) power of attorney to someone who you trust and who is comfortable handling money matters. Check on the status of their will and living will. Make certain insurance policies are up to date. Verify who the beneficiaries are on accounts and insurance policies. Know where the documents are stored. For a more complete list of what you should compile, read AARP’s article here.
Check for identity theft or fraud. Monitor credit reports for free annually from annualcreditreport.com and check for accounts or charges that seem unusual. Consider placing a fraud alert on your credit report by contacting a credit bureau.
Simplify. Consider reducing the number of credit cards and consolidating accounts. Review expenses and design a budget that is easy to track and maintain. Consider automatic bill payment in order to reduce stress and prevent late fees from forgetfulness.
Stay up to date on common scams. Occasionally research what kinds of scams are common and keep yourself informed on what to look out for. Two good resources are the FBI’s Scams and Safety website or the Department of Justice’s Elder Justice Initiative.
Register for the National Do Not Call Registry. Registering for the National Do Not Call Registry can help to reduce the number of spam calls received, reducing exposure to telemarketers.
Monitor accounts. Consider using a technological tool that will store backups of essential documents and information, or a tool that monitors accounts and sends alerts to designated contacts when there is suspicious activity.
Consider an adviser. If you are overwhelmed or are worried you will not have the time to devote the attention you want to into your loved one’s financial plans, consider seeking help from an adviser you can trust. Kings Path Partners serves seniors and their families through the review and implementation of estate plans, investment goals, and philanthropic objectives. We carefully watch over our clients and their assets, remaining transparent, accountable, and relational in our service. We seek to show selfless service and genuine care to each client as we form personal, trust-based relationships.
Kings Path Partners is committed to serving clients respectfully and confidentially, providing guidance tailored to you and your family’s specific needs. If you need help developing a plan, give us a call at 832-500-3101 or email service@kingspath.com for a consultation.
[1] https://health.usnews.com/wellness/aging-well/articles/2017-03-14/infographic-the-high-cost-of-elder-financial-abuse
[2] https://www.medicare.gov/forms-help-resources/help-fight-medicare-fraud
[3] https://www.consumer.ftc.gov/blog/2018/12/fake-calls-about-your-ssn
