Over Christmas break, a friend received quite a surprise when his Mom told him that she had some good news. She shared that she met and fell in love with a Ukrainian General online. His Mom was sending Apple gift cards to a post office box in Texas as gifts for this man and his son. My friend has the unpleasant task of letting Mom know she was being scammed and is now working with the FBI to bring these criminals to justice. This experience opened my eyes to how easily our aging parents can fall victim to scammers. My exposure expanded as the father of another friend had been scammed for thousands of dollars by a woman he had also met online. This woman has numerous family emergencies requiring money; my friend’s father had willingly sent her money at each request.
Being susceptible to scams can be a sign of dementia. A National Institute of Health report shows that older adults can have problems managing finances for up to 6 years before receiving a diagnosis of dementia.1 Earlier detection of cognitive decline could help protect your Mom or Dad from falling victim.
Aging parents can be especially vulnerable to falling for a scam after a significant loss or enhanced stress. You want to be extra vigilant if your parent lives alone, has recently moved, lost a spouse, or has a significant health change. It’s also important to understand that elder financial abuse is almost equally likely to be done by strangers as well as someone the senior knows.2 If your parent has a new best friend or caregiver and your Mom or Dad is hesitant about making decisions without consulting that person, be on guard.
Here are some of the more common scams against the elderly:3
- Requesting bank or credit card information to make donations over the phone for a fake charity
- Demanding payment of a debt owed by a loved one who recently died
- Posing as representatives from the government, Social Security or Medicare and pressing for payment of unpaid taxes or personal information to continue receiving benefits
- Pretending to be a grandchild in trouble who needs money
- Winning a sweepstake or lottery but requesting upfront fees to collect the money
- Meeting a romantic partner online who has monetary requests to pay bills or other items
- Requesting funds for an investment opportunity with promises of high returns
Just as we set up protection for our children as they were getting iPhones and laptops, we need to put safeguards in place for elderly parents as well. Here are steps you can take to help protect your parents from fraud:
- Ensure your parents have a power of attorney updated in the last 5-7 years. If they don’t have a power of attorney (or if you don’t have one), get one! It will likely cost a couple of hundred dollars but could save thousands in legal and court fees.
- Review their bank and credit card statements and check their credit on annualcreditreport.com. You want to look for things like unexplained charges, unusually high withdrawals, late fees, or new credit cards or loans. Stagger calendar reminders every few months to check their credit reports with the three major credit bureaus: Experian (ex: January), Equifax (ex: April), and TransUnion (ex: August).
- Freeze their credit to reduce the likelihood that fraudulent accounts can be opened. You will contact each credit reporting agency to freeze credit and select a PIN that can be used if credit needs to be “thawed.” Here are the websites to visit to freeze your credit with each of the three major reporting agencies: Equifax, Experian, and TransUnion.
- Ensure your parents are using virus protection on their computers and strong passwords for their online accounts.
- Put notes in your parents’ homes to remind them not to share financial or insurance information. Remind them they don’t have to make quick decisions regardless of what they read in an email or text or hear in a phone call.
- Contact the Direct Marketing Association’s Mail Preference Service to have your parent’s name removed from the list used by marketers.
- Call 1-888-5OPTOUT to have your parent’s name removed from the marketing list of the three credit reporting bureaus.
- Put your parents’ phone number on the National Do Not Call registry.
- Work with a CERTIFIED FINANCIAL PLANNER™ who can provide another layer of oversight and help simplify and consolidate your parent’s financial accounts.
- If your parent has already fallen victim to fraud, don’t blame or shame them. They may be embarrassed and hesitant to share the details you need to help. Instead, let them know it’s important to share what happened to protect others from being victims. If they continue to be exploited financially, consider meeting with an estate planning attorney to discuss potential options, including:
- Opening a smaller bank account that your parent can access for spending but restricts their ability to get funds from larger accounts and investment accounts.
- Creating a trust to manage your parent’s money.
- Going to court to be named as conservator of your parent’s finances.
The expression “an ounce of prevention is worth a pound of cure” is true, especially with our physical health and financial health. If you have any questions or need help getting your parent’s protection started, please don’t hesitate to reach out to Patti Black, CFP, or any of the advisors at Bridgeworth.
If you want to learn more, this series of videos may be a helpful resource: https://www.olderadultnestegg.com/for-family-and-friends/learning/
Bridgeworth Wealth Management is a Registered Investment Advisor.
1 https://www.nih.gov/news-events/nih-research-matters/financial-problems-can-be-sign-dementia-onset
2 https://www.olderadultnestegg.com/training-modules/caregiver_3/
3 https://money.usnews.com/money/retirement/aging/articles/common-scams-that-target-seniors-and-how-to-avoid-them