Protecting Seniors from Financial Abuse
Unfortunately, elder financial abuse and fraud costs American seniors some $36.5 billion each year, according to the National Council on Aging (NCOA). Take the following steps to identify, prevent and report financial abuse of senior family members and friends.
1. Understand the Threats
Elder financial abuse and fraud can be committed by those close to the senior or by complete strangers via the Internet. Unless you're managing the finances of an elderly relative or friend, it may be difficult to spot financial abuse. Understanding the potential threats facing the senior in your life can help to prevent abuse and fraud.
Caregiver/Family Fraud – A family member, friend or caregiver uses their position to gain access to the senior’s financial assets. With this access, the once trusted advisor will begin to use the senior’s assets for their benefit.
Impersonation Scams – A fraudster will call a senior claiming to be from a well-known company and state that fraudulent activity has been flagged on their account. The fraudster will ask for information that can be used to gain access to the senior’s accounts.
Phishing/Smishing Scams – Convincing emails containing malicious links are sent to seniors to trick them into willingly divulging personal identification information.
Romance Scams – Using emotion, fraudsters gain trust from an unsuspecting senior to obtain funds. After love and trust is established, the fraudster will begin asking for assistance in the form of money.
Technology Scams – Seniors are contacted by fraudsters impersonating a technology professional claiming that the senior must pay to have a nonexistent computer issue fixed. Funds are then withdrawn from the senior’s account.
Money Smart for Older Adults is a comprehensive financial curriculum created by The Consumer Financial Protection Bureau (CFPB) and Federal Deposit Insurance Corporation (FDIC) to provide further education on these threats for you and the senior in your life.
2. Identify the Warning Signs
Warning signs include unpaid bills, overdrawn checks, disconnected utilities and duplicate subscriptions. A glance through the loved one's checkbook might show an unfamiliar signature. You might find contracts, for example deeding property to another relative, transferring long-held financial accounts to another firm or purchasing dubious investment portfolios. This is especially serious if your elderly relative doesn't remember signing.
If your relative mentions receiving suspicious emails/phone calls or complains about technical issues with their computer, they may be a victim of a cyberattack. Look for sums of money being withdrawn from bank accounts, unauthorized purchases on credit cards, new accounts on their credit report and accounts that can no longer be accessed with the password created by the senior.
If a once-chatty senior stops calling you, it may be a sign that an abuser has scared them into silence. If a caregiver controls who has access to the senior and limits the time you spend alone with them, this may be a red flag that abuse is taking place. Seniors who fall victim to a cyberattack may be reluctant to share information due to embarrassment or confusion.
3. Spot Financial Abusers
The evening news often reports the latest financial scams we should all avoid, but these stranger scams make up only a small portion of how the elderly are financially abused. In fact, they're most often victimized by family or professional caregivers, according to the Alzheimer's Association and the National Adult Protective Services Association (NAPSA). Both offer detailed information on elder exploitation and tips for spotting financial and other abuse. According to the NAPSA, the list of potential abusers can also include neighbors, attorneys, religious leaders, medical professionals, friends and acquaintances, as well as financial services employees. Of particular concern are family and friends who are in desperate financial situations themselves. Seniors are also considered excellent targets by cybercriminals because of their technological skill level and financial assets.
4. Put Financial Safeguards In Place
Some seniors may also be more at risk for identify theft, falling prey more easily to online phishing scams and requests for sensitive financial information, such as Social Security numbers. Educate your loved one on cyber best practices such as identifying suspicious links, using multifactor authentication, and creating stronger passwords. Advise them to never give usernames, passwords, or financial data over the phone or on unsecured sites.
To prevent and catch identify theft, bank with financial organizations that provide fraud alerts, and choose credit cards with zero liability fraud protection. The NCOA offers a list of the top 10 financial scams targeting seniors and how to avoid them.
5. Report Financial Abuse
Elder financial abuse remains an increasing but under-reported crime, according to NAPSA. Seniors may be embarrassed by falling for a con, or they may remain silent out of fear. Often, the abuser has threatened them physically or verbally. If the senior lives with the financial abuser, they may also be victims of physical abuse. Eldercare Locator, a program of the federal Administration on Aging, and the National Center on Elder Abuse offer information on reporting all forms of elder abuse. Through IdentifyTheft.gov, consumers can report identity theft to the FTC and receive a free recovery plan.
Elder financial abuse is an unfortunate reality, but by taking these steps, you can work to prevent it. That way you can focus on spending quality time with your senior friends and family.