Protecting Parents from Predators

Over Christmas break, a friend received quite a surprise when his mom told him that she had some good news. She had met and fallen in love with a Ukrainian General online. His Mom was sending Apple gift cards to a post office box in Texas for this man and his son. My friend had 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. I also heard that another friend’s father had been scammed for thousands of dollars by a woman he met online. She had numerous family emergencies requiring money, and my friend’s father willingly sent her money several times.

Susceptibility to scams may indicate an increased risk of dementia. A National Institute of Health report shows that older adults can have problems managing finances for up to six years before receiving a diagnosis of dementia. Earlier detection of cognitive decline could help protect your parents from falling victim.

Aging parents can become more vulnerable to scams 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 substantial health change. It’s also important to understand that elder financial abuse is almost equally likely to be inflicted by strangers as someone the senior knows. If your parent has a new best friend or caregiver and your parent hesitates making decisions without consulting that person, be on guard.

Here are some of the more common scams against the elderly:

• 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 requesting personal information to continue receiving benefits.
• Pretending to be a grandchild in trouble who needs money.
• Winning a sweepstakes 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 when they started using smartphones and laptops, we need to put safeguards in place for elderly parents as well. Here are steps that can help protect your parents from fraud:

• Ensure your parents have an updated power of attorney within the last 5-7 years. If they don’t have one (or if you don’t have one), get one! It will likely cost a few 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 unexplained charges, unusually high withdrawals, late fees, or new credit cards or loans. Create staggered calendar reminders every few months to check their credit reports with the three major credit bureaus: Experian (in January), Equifax (in April), and TransUnion (in August).
• Freeze their credit to reduce the likelihood that scammers will open fraudulent accounts. When you contact each credit reporting agency to freeze credit, you will be asked to 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 use virus protection on their computers and strong passwords for their online accounts.
• Post friendly reminders 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. Here are some more Tips for Avoiding Online Scammers.
• 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 financial advisor who can provide another layer of oversight and help simplify and consolidate your parent’s financial accounts.
• If your parents have 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 becoming 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 regarding our physical and financial health. If you have any questions or need help starting your parent’s protection, please don’t hesitate to contact one of our financial advisors at Savant. We’re here to provide guidance and support as you navigate your financial journey, which can often include helping care for your parents. Your peace of mind is our priority. Contact us today to get started.

If you want to learn more, this series of videos may be a helpful resource.

Sources:

National Institutes of Health: Financial Problems Can be Sign of Dementia Onset

Caregiver Learning Series

US News: Common Scams that Target Seniors and How to Avoid Them