5 Steps to Protect Against Elder Fraud
More than 5 million American seniors are abused each year, according to the Elder Justice Roadmap, a recent report from the U.S. government. And the problem is believed to be widely underreported, with only 1 in 24 incidents brought to the attention of authorities.
Elder abuse ranges from physical and psychological abuse, to neglect, abandonment and fraud. Financial fraud of the elderly includes taking money or property directly, deceiving them into signing over a deed or power of attorney, engaging them in a telemarketing scam, convincing them to send money through a third party, using their property without permission, and much more.
Perpetrators of elder abuse include family members, crooked business people and even predatory individuals.
Aging Population Means Higher Risk
More than 80 million Americans — 20 percent of the total population — will be 65 or older by 2050, according to the National Center on Elder Abuse. Compare that to 1990, when only about 10 percent of the population was 65 and up. That’s a large group of potential victims for scammers.
As you and your loved ones age, here are five steps you can take to protect against elder financial fraud:
- Know the Signs: Is your elderly loved one suddenly having a hard time affording their day-to-day needs? Are they writing uncharacteristically large checks to charities or care organizations? Have they signed away properties or signed a power of attorney without fully understanding the implications? Often, the signs of elder abuse are as simple as noticing changes in their behavior.
- Know When to Step In: Sadly, deteriorating cognitive abilities are one of the reasons that the elderly make such common fraud targets. If you notice your loved ones becoming more forgetful, struggling with day-to-day matters and losing track of their finances, it may be time to step into more of a caregiver role in order to protect their interests. (When in doubt, here are some early warning signs of impaired financial decision making to watch for.)
- Survey Their Accounts: Make a list of all the different places that your loved one keeps their money and look for any suspicious activity or changes in their spending patterns. Investigate any transactions that they either cannot remember or seem out of place for their lifestyle.
- Know Their Friends: “Sweetheart” scams, in which an individual ingratiates themself to an elderly person in order to gain access to their finances, are as old as time itself, and can be particularly damaging to a victim’s life savings. Keep in touch with your older loved ones and ask about any new friends who suddenly pop up. They might be out for their own interests.
- Stay Informed: Knowledge is power, and if you are concerned about the financial well being about an elderly relative, often the best step to take is simply to talk to them about it. Who manages their money on a day-to-day basis? Are their bills being paid on time? Are they aware of everything that is going on with their money?
Fraud is just one part of elder financial care. Read more from SAM about how to prepare for the other financial challenges that come with aging family members.
[Any reference to a specific company, commercial product, process or service does not constitute or imply an endorsement or recommendation by the National Endowment for Financial Education.]