Protecting Elderly Parents from Financial Scams
Financial fraud is the fastest growing form of elder abuse, but it often goes unreported and can be difficult to prosecute. Many elder victims are afraid, confused or embarrassed to report a financial scam. Many states have passed some form of elder abuse prevention laws, but you can protect loved ones from financial abuse by becoming familiar with the most common scams.
Scammers target elders because they are perceived to be vulnerable and depend on others to meet their most basic needs. Many elders live alone, are physically or mentally disabled, unable to handle their own finances, or have recently lost a spouse. Severely impaired individuals are also less likely to take action against their abusers as a result of illness or embarrassment.
Scam artists portray themselves to be trustworthy people. They can be strangers, friends, family members, paid or volunteer caregivers, lawyers, doctors or accountants. Many of them have paperwork or documents that appear to give them legal authority to act. Some scam artists may work at a bank or other financial institution and have ways of hiding their tracks by manipulating electronic records.
Most Common Financial Scams
Keep an eye out for these common scams:
- Medicare/health insurance scams – Perpetrators may pose as a Medicare representative to get older people to give them personal information
- Lottery & sweepstakes scams – Mail or email scams such as “You’ve already won! Just send $2,000 to cover your taxes”
- Charity scams – Soliciting funds for good causes such as natural disasters
- Charging excessive amounts of money – Smooth talking scammers first convince the elders that they need some goods or services, then overcharge them by hiding high costs in interest charges or installment payments
- Identity theft – Credit cards opened fraudulently
- Investment/securities schemes – Pyramid schemes, unrealistic returns promised and dealers not licensed
- Annuity sales – Using equity realized from a reverse mortgage to buy an expensive annuity, which may not mature until the person is well into their 90’s or over 100
- Telemarketing or mail fraud – Scammers use the phone to conduct investment and credit card fraud, lottery scams, and identity theft
- Using fraudulent legal documents – Many scammers hide their actions in legal authority, persuading a power of attorney or will giving them access to the senior’s property
- Doing unsolicited home repair work – Scammers scour neighborhoods with a high concentration of older residents, then appear on their doorsteps claiming to spot something that needs to be fixed – a hole in the roof or clogged drainpipe
Warning Signs of Financial Abuse
Look out for certain factors that may indicate that a loved one is a likely target of financial abuse.
- Unusual or large withdrawals or transfers from bank accounts
- Large credit card charges that the person can’t explain
- Missing checks
- A person who quickly forms a close relationship with the older person, getting easy access to their home, money, or property. New “best friends.”
- Newly executed documents, such as a will or power of attorney
- Changes in account beneficiaries or authorized signers
- A large number of unpaid bills
- Missing property or personal belongings
- A caregiver expresses excessive interest in the amount of money being spent on the older person
If you suspect senior abuse is occurring, there are several options for taking action.
Notify bank personal or alert law enforcement. You may also contact Adult Protective Services, a government-affiliated agency in charge of investigation reports of elder financial abuse.