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Protect Elderly Parents’ Finances from Scams
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Jan 23, 2013
Money is a delicate subject in many families. As parents age, money issues become increasingly important and often even more sensitive.
Controlling their own money is a tangible sign of parents’ independence. Because of this, they may hesitate to give up that control to children or even to talk about what they are doing with their money, where it is kept or invested or how they plan to use it going forward.
Yet, these are issues that very much need to be discussed as parents age.
Targets of scams
Scams are defined as fraudulent business activities. These are usually designed to extract funds without the return of value promised. Senior citizens are often targets of scams for a variety of reasons:
- They have cash. Many have saved through the years and have easy access to funds.
- They tend to be trusting. A good sob story or product pitch may sound appealing, and they may not feel comfortable asking the hard questions that would identify the scam.
- They are available. Many seniors are at home and consider phone calls and mail a welcome diversion. They are easier to contact than other groups.
- They may be confused. While all seniors certainly don’t fit this profile, some do. Those individuals may not realize they have been scammed, resulting in unreported crimes.
The FBI includes information on its website about scams and precautions for avoiding them. Learn more at www.fbi.gov/scams-safety/fraud/seniors.
Targets of sales pitches
Some organizations play on the elderly to sell their legitimate products and services. They may actually provide the product or service for the money received, which keeps them out of the scam category.
Still, the practices are less than above-board. For example, one 80-year-old woman had unwittingly subscribed to a “travel club” offering her discounts on flights and resorts. If she had been able to travel, these discounts might have been useful. In fact, she was in a nursing home and unable to travel.
In some instances, the telemarketer actually does call the individual and talk about the offer. The caller may ask the buying question in such a way that the senior citizen answers “yes” without being clear on what they have committed to.
In other instances, the caller may simply state that the company is providing the service for a small fee, without asking for permission. The charge shows up on a credit card and often goes unnoticed. Months or years of fees may be collected before the issue is recognized.
Overly generous giving
Many seniors have a soft spot for certain causes, and they may respond generously to various charities or religious organizations. These may be good organizations, or they may not be.
In either case, seniors may end up giving more than their budgets will support. The result will eventually be a shortfall of funds when they need the money for living expenses or care.
Until an adult child or other concerned person reviews the bank account and credit card statements, most of these issues will go unnoticed. Convincing parents that someone needs to review the information is often a difficult task.
The subject needs to be approached with respect and love. Since maintaining independence is important to most seniors, strategies for keeping them involved in decisions should be discussed. The idea isn’t to take away their independence but to help them manage their finances so that they can stay independent as long as possible.
Adult children or other concerned loved ones should consider suggesting that they and their senior relative or friend review the bank statement and credit card statements together to make sure the institutions are treating them fairly and they haven’t been victimized by identity thieves. This is a good practice for seniors and non-seniors, so it won’t suggest that they are more vulnerable than most people.
In the review, relatives or friends perhaps will be able to identify unusual charges or payments that might open up discussion about scams and other money issues. If they do find something, they should take care not to berate the senior. Anyone can be a victim – young or old, and care should be taken to avoid making a loved one feel stupid or irresponsible.
A time may come when a responsible person will need to talk with a physician about the senior citizen’s physical and mental abilities to handle money issues. Dementia, Alzheimer’s and other illnesses may be indicators that more oversight is truly needed.
An attorney can draw up a power of attorney to allow a designee to legally handle the affairs of the senior citizen. People should take the steps necessary to protect the seniors in their lives.
We are now finishing our third audit with GRF. In particular, Andreas Alexandrou and Dino Karamalikis have kept us on a track of continuous improvement in our financial processes and office management.
Wendy Gilbert | Director