Protecting Aging Loved Ones from Financial Scams
Contributed by Caroline Currier
The holiday season is a time of generosity and cheer. However, it is also peak season for financial scams.
Seniors are more likely to fall victim to a financial scam for two reasons, the first being the volume of attempts that they are subjected to. Studies show that an elderly individual receives five scam phone calls for every 1 that a middle-aged individual receives. Further, because they are retired, they are more available than the average person to take calls during the day. The second reason that seniors are more vulnerable to financial scams is that they often have diminished capacity. As we age, our ability to distinguish the truth from fraud often diminishes. Additionally, seniors are tender-hearted and are eager to assist others when asked.
You can significantly reduce your aging loved one’s likelihood of becoming the victim of a financial scam by implementing the four strategies listed and discussed below.
- Educate Your Senior on Potential Scams
Education is an essential step to protecting your senior loved ones. Seniors should be made aware of some of the more common attacks aimed to gain access to their cash assets as well as their identity. The most common financial scams generally come in the form of phone calls from persons alleging to represent a law enforcement agency or a federal entity such as the Internal Revenue Service or Social Security Administration. Law enforcement impersonators will often indicate that a family member has been injured or is in jail, and is in immediate need of funds for medical treatment or bail. Calls from the IRS or Social Security Administration will often be automated, and will be tied to a request for a senior’s information such as a social security number. You should inform your senior of these tactics and ask that they contact you or a trusted third party in the event that they are contacted in this manner. You should also inform your senior that anytime someone requests payment in the form of a gift card, that they are most likely being deceived, and should not fulfill any such request.
The majority of the time, scammers come in the form of a stranger. But people often forget that a seniors can be taken advantage of by people that they already know, such as an acquaintance, a neighbor, a friend or even a family member. Therefore, you should encourage your senior to reach out anytime that anyone, even a friend, asks them for information or funds in any amount or any form, especially that of a gift card.
- Educate Yourself on Your Senior
Knowledge is a powerful weapon in defending your senior against scams. To gain more information on your senior’s day to day life, you should ask them all of the “Where” and “Who” questions:
- Where does your senior spend most of their time?
- Where do they shop?
- Where do they keep their personal information such as social security cards, bank statements and cash?
- Where they bank or hold their investments?
- With whom do they spend most of their time?
- Has anyone been in or stopped by their home lately?
- Has anyone asked them for their personal information lately?
- Has anyone asked them for money lately?
- Have you given anyone money lately?
- Who is their point of contact at their financial institutions?
It is helpful to keep written records with this information in case you or your senior loved one need it in the future.
- Get a Power of Attorney
A Power of Attorney (POA) is a legal document that allows you to act on your loved one’s behalf and represent their interests. If drafted by an elder law attorney, this document will allow a loved one, ideally someone who is comfortable with technology, to monitor a senior’s bank accounts, investment accounts or credit card activity. This will allow that person to become aware of suspicious activity immediately, before a scammer can drain an account in full.
For seniors with diminished capacity, families might also considering placing the senior’s assets in a Trust that allows the family to manage the senior’s assets with greater security. It is important for families to know that their options for asset protection are significantly limited without a POA in place. Thus, when possible, seniors should sign a thorough POA when they are healthy and have full capacity to give their family members greater flexibility in how and when they can manage the senior’s affairs.
- Connecting with a Third Party
Whether or not your senior lives near family, it is a good idea for every senior to have a trusted individual in their life with which they discuss financial abuse. I recommend that this person serve some kind of advisory role in the senior’s life, such as a religious counselor, an attorney, a financial advisor or bank associate. This person should not be a relative or close family member, as oftentimes seniors will avoid telling their family members that they have fallen victim to a financial scam for fear of being judged. Further, they may avoid asking questions to their loved ones in fear of accusation that they are being “paranoid” or their question is “silly.” They could be embarrassed or afraid that their loved ones will think they are not capable of living on their own any longer.
However, when a senior never reports this abuse out of fear of judgment, they lose all chances of regaining their stolen property and the criminal continues to prey on the elderly without punishment. Therefore, you should encourage your senior to connect with a trusted advisor sooner rather than later. As an elder law attorney, I encourage all of my senior clients to contact my office if they ever have any questions or concerns about the validity of a request for information or payment. And they often do.
Protecting seniors in Northwest Arkansas is not only a professional goal of mine, but a personal one. You should consider using these four strategies to protect your aging loved one from financial abuse. Even a short conversation with a senior citizen in your life can save them from losing thousands of dollars of this holiday season.
Please reach out to our elder law attorneys if you have any questions or concerns about the financial welfare of your senior loved one.