June was World Elder Abuse Month, making now a good time to reflect on some of the financial hazards the elderly are particularly vulnerable to. Fraud surges typically happen during tax season, the holidays and throughout disasters and pandemics.
The Senate Special Committee on Aging recently reported that exploitations now cost seniors more than $3 billion annually, confirming the need to remain vigilant to protect our older population, year-round.
Why are seniors targeted? According to AARP, Americans over age 50 hold 77% of all financial assets in the U.S. This fact, combined with the decline in cognitive ability that often comes with aging (according to the Alzheimer’s Association, 10-20% of people over 65 have some type of mild cognitive impairment) makes seniors a prime target for financial scams and fraudulent activity.
Some warning signs of potential financial fraud that may raise a red flag are overdrawn checks or unfamiliar signatures in checkbooks, unpaid bills, duplicate subscriptions, a dramatic change in the rate of withdrawal of funds from accounts, or a change in power of attorney or beneficiaries on insurance or investment accounts.
Sadly, the majority of elder financial exploitation is by family members or caregivers. Common abuse includes coercing an aging individual into signing over assets, asking for unsolicited work and insisting payment before work is complete, misusing income or assets by stealing money by check or credit card, having unauthorized account access or withholding portions of cash, and charging excessive rent or fees for basic care services.
Seniors, and those caring for them, should also be on the lookout for scams. A few of the more common ones targeting the older population are:
- Grandparent scams: A senior receives a call from a person impersonating their grandchild, who is in crisis, with an urgent plea for money, often requesting to keep it secret.
- Romance scams: The most successful scam across all age categories relates to online dating. There is often a request for money, gift cards, or plane tickets, typically starting as small requests and growing in amount.
- Technical support scams: There has been a rise in this form of scam due to the social isolation caused by the pandemic, especially for seniors, who should be leery of granting remote access to ‘fix’ their computer. Scammers use this ploy to pull private data and access bank accounts.
- Government impersonation scams: Criminals pose as government employees and threaten to arrest or prosecute victims unless they agree to provide payment.
- Sweepstakes, charity and lottery scams: Scammers claim to work for legitimate organizations to gain trust or they claim the victim has won a foreign lottery or sweepstakes, which they can claim for a fee.
A few tips for protecting seniors:
- Talk about finances with trusted family members and financial professionals. Begin a conversation with a family financial meeting. Have an objective third party look over financial statements. Check in regularly to ask questions and discuss any concerns related to financial well-being.
- Watch out for phishing scams which use fraudulent emails, texts, phone calls and websites to trick users into disclosing private information. Do not click on links or open any attachments or pop-up screens from sources you aren’t familiar with and guard your passwords, social security and account numbers, or other personal financial information.
- Do some research before making a donation. Be wary of any business, charity, or individual requesting payments or donations in cash, wire transfer, gift card, or through the mail.
- Keep your computers and mobile devices up to date. Using the latest security software, web browser, and operating system is the best defense against viruses, malware, and other online threats. Turn on automatic updates, so you receive the newest fixes as they become available.
- Be suspicious about anyone who has recently gained an interest in your life and finances.
- Hire caregivers through certified agencies. Make sure to ask for and check references.
- Have legal and financial protections in place. Keep your estate documents up to date, particularly your powers of attorney, spelling out who has access to your financial accounts.
- Credit reports. Review at least once a year. Or set up free, monthly credit monitoring.
Educating seniors and their caregivers on financial abuse is critical to prevention. Following a few tips and precautions and communicating openly with trusted family & financial professionals can provide peace of mind for older adults while protecting their assets.
Some additional resources: