The baby boomer generation is aging, and they are increasingly becoming targets for senior financial abuse. Americans over the age of 50 have control over 70% of the nation’s wealth, making them ideal candidates for scammers to approach1. So, what is elder financial abuse? It is a crime that exploits older adults of their means and independence. It can be perpetrated by fraudsters or people close to you or your family member, such as a friend, caregiver or relative. As people age, they may need the assistance of an outside person or relative to manage their finances. Unfortunately, they may put their trust in someone who does not have their best interest in mind.
With so many technical advances it can be difficult for seniors to know what is safe and who they can trust. Nevertheless, there are simple steps that can be taken to protect personal information and warning signs for family and friends to be aware of.
Steps for Seniors
- Choose a trusted contact for accounts and investments
This trusted contact will be authorized to be contacted by your bank or financial institution if there is questionable activity on your account or if you are unreachable. This person may be privy to some account information but unable to make any transactions on your behalf 2. Contact your bank to see what the process is to add a trusted contact to your accounts.
- Enroll in an account tracking service
There are services that can detect suspicious activity on your accounts and alert you as soon as it detects anything. Some examples are EverSafe and LifeLock which for a nominal fee can help monitor your accounts and detect scams. An added benefit to having one of these services is they can also help in recovering any losses if you do happen to fall victim to fraud.
- Never give out personal information via the phone or email
Many scammers use the phone or email to target the elderly with the hope that they don’t understand the technology and will freely give personal information. Unless you made the call and trust the other party, avoid sharing social security numbers, account information or any other personal identifying information.
- Review your monthly financial statements
Review your monthly financial statements thoroughly for any unauthorized money movement or any activity you do not recognize. If you notice activity that you did not authorize, contact your financial institution immediately.
- Make a plan
Talk to someone at your bank, a lawyer or financial advisor about the best options to safeguard your investments and accounts and ensure your wishes are followed. They can help you put a plan in place in case of financial abuse.
Warning Signs for Family and Friends
- Change in typical financial patterns
If you notice the elderly person begins using an ATM card and never has in the past or is attempting to open new accounts or transfer large sums of money this could be an indicator that there is some type of elder financial abuse occurring.
- Past due bulls or insufficient funds in accounts
If you notice past due bills or monthly financial statements with insufficient funds, this could also be an indication of elderly financial abuse.
- Updating or changing wills or trusts
If an elderly person suddenly wants to make significant changes or updates to their completed will or trust, try to talk with them about why they need to make the changes. Gather an understanding of why the change is needed and help determine if it’s necessary.
- A caretaker, relative or friend who suddenly begins conducting financial transactions on behalf of an older person.
Be wary of any “new friend” or caretaker that is asking for financial information you do not think they need or should have access to. Even a relative can take advantage of an older person. The National Center on Elder Abuse reports that 53% of elder financial abuse was committed by a family member3. Make sure that any new changes to a will or power of attorney are in their best interest and wanted by the elderly person.
What to do if you become a victim of elder financial abuse?
If you happen to fall victim to elder financial abuse, contact Adult Protective Services in your state for guidance. Reach out to a trusted contact or family member who can help aide in the process of recovering from the abuse. You can also contact a lawyer to help navigate the legal side of financial exploitation crime.
The effects of financial abuse on an individual can be devastating, but using the steps above is a start to protecting yourself or a family member from falling prey to scammers. If you are concerned about the safety of your finances or those of a family member, contact your financial advisor (or theirs) and ask to review the accounts.
Insight Wealth Strategies, LLC is a Registered Investment Adviser. Advisory services are only offered to clients or prospective clients where Insight Wealth Strategies, LLC and its representatives are properly licensed or exempt from licensure. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by Insight Wealth Strategies, LLC unless a client service agreement is in place.
Insight Wealth Strategies, LLC (IWS) and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.