Each year, one in five older Americans falls victim to financial exploitation
The American Association of Retired Persons (AARP) Institute says that each year, one in five older Americans falls victim of financial exploitation. Financial scams can be devastating to elderly populations, their children and their entire family.
Financial exploitation refers to the misuse or misappropriation of an individual’s money or property. Anyone, regardless of income or level of wealth, can become a victim of this crime. Sadly, these crimes are committed by con artists, phone scammers, caregivers and even family members.
The best first step is to educate yourself on the scams that exist. There are many scams and there are new ones all the time. The common thread often looks like this: they try to get you to give them personal information; they encourage you to make a decision quickly about purchasing a product; or they want the elder to give money to a “good cause.”
Why has the victimization of the senior community become such a rampant crime? One reason is that the baby boomer generation is aging, so there are simply more seniors. These seniors are also living longer, often living away from families and possibly feel more isolated and alone.
Protect yourself and your assets
As you start to age, here are some tips to fight exploitation:
- Stay active and connected with friends and family.
- Don’t be afraid to engage in regular conversations about money and your wishes.
- Seek independent, or third-party, advice from someone you trust before signing financial documents.
- Plan your own future and designate a power of attorney for financial matters.
- Designate a ‘trusted contact’ on your financial accounts.
- Don’t ever give out personal information over the phone.
- If a request makes you feel anxious, regardless of who asks, don’t do it.
What can I do to help my parents?
The best step is to have a frank conversation with your parents now. Often a family meeting can be helpful in determining what help your parents require or want should a difficult situation arise. You should do this now because by the time a parent needs help, it can be too late.
Discuss their overall financial plan including income in retirement and the eventual transfer of assets. It is also important to discuss power of attorney or health care directives. It may be useful to bring in someone without personal connections, perhaps a trusted financial advisor, to moderate the meeting.
Look for warning signs: If you see something, say something. Warning signs can include donations to charities you don’t recognize, unexplained checks to strangers and financial accounts in debt that should have a positive balance.
Set up simple checks and balances now to use when your parents need help to make sure they don’t fall victim to financial exploitation and common scams. What might these checks and balances look like?
- Monitor their accounts
- Have one child monitor daily finances and another one review the financial statements, if possible
- Make unexpected visits; Is your parent nervous about you being there? This might be a sign that something is wrong.
- Check that your parent is being taken care of; make sure the house or living space is orderly and that they are eating well.
- Do a routine check to make sure valuables are in their place.
- Be open with the family if there have been problems. The coined term, “honesty is the best policy,” truly is the golden rule.
- If you discover financial abuse, know that it is a crime and it should be reported.
In 2018, the Senior $afe Act was passed, which allows financial institutions to help identify potential issues and report them. This bill makes it easier to report abuses to legal authorities and the appropriate state agencies. In Colorado (as in most states), you should contact Adult Protective Services in the county where the senior resides should an incident occur.
At the end of the day, financial education and monitoring is the biggest crime preventer, but if a crime is committed, immediate and thorough action can mitigate or even prevent additional damage.