Tip #5: Techniques to Curtail Elder Fraud
McRae Capital Management’s Cybersecurity Series
Elder fraud is a distressing and growing form of financial abuse that targets some of society’s most vulnerable individuals – our seniors. As the elderly population continues to expand, so does the risk of elder fraud. This article emphasizes the importance of recognizing and preventing elder fraud while providing essential steps to protect seniors from falling victim to scams.
Elder fraud encompasses a range of scams and deceptive practices aimed specifically at older adults. These schemes can manifest through fraudulent telemarketing calls, phishing emails, door-to-door scams, or even exploitation by trusted caregivers or family members.
The Impacts of Elder Fraud
Elder fraud not only carries financial repercussions but also inflicts emotional and psychological distress on victims. Seniors who fall prey to fraud may lose their hard-earned savings, experience shame or embarrassment, and suffer from diminished trust in others.
It’s crucial to recognize that many seniors feel embarrassed or ashamed when scammed and may find it challenging to discuss their experiences. Shockingly, only one in 44 cases of financial abuse is ever reported. Initiating conversations about this issue with empathy and a well-considered strategy is one of the most critical actions you can take for your senior loved ones.
Here are some of the most common scams to look out for:
- IRS Scam: Scammers claiming to be from the IRS demand immediate payment for overdue taxes. Please note that the IRS typically initiates contact through regular mail, so any other form of communication should be met with suspicion.
- Impersonation Scam: A caller pretends to be a loved one in urgent need of bail money or payment for an outstanding warrant.
- Tech Support Scam: You receive a call or email claiming your device is infected, and the scammer asks for payment to remove the threat. They may even request access to your device.
- Emergency Scam: An email or text claims a friend or family member is stranded overseas, has lost their phone, and urgently needs money.
- Get-Rich-Quick Scam: Scammers promote investment schemes promising quick wealth, often through trusted family or friends.
Initiating conversation about this issue with empathy and a well-considered strategy is one of the most critical actions you can take for your senior loved ones.
Protecting Against Elder Fraud
- Prioritize Appropriately: Make elder fraud prevention a regular topic in financial and estate planning efforts.
- Educate Seniors: Empower your loved ones with knowledge about common scams. Encourage them to remain skeptical of unsolicited communication, especially those promising quick riches or requesting personal information.
- Create Oversight: Ensure at least one, or ideally two, trusted individuals have insight into the financial activity of senior family members, fostering transparency and accountability.
- Set Up Legal Protections: Consider establishing a durable power of attorney or guardianship for elderly family members, ensuring a responsible person can make financial decisions on their behalf if necessary.
- Set Up Alerts: Work with financial institutions to set up automatic alerts triggered by significant transactions or profile changes. These alerts can provide early warning signs of potential fraud.
- Act Quickly: If you suspect elder fraud, seek help immediately by contacting banks, financial institutions, or credit bureaus as needed.
- Stay Informed: Stay updated on the latest scams targeting seniors by subscribing to newsletters or websites that provide information about common fraud schemes. Sign up for AARP’s Fraud Watch Network to become aware of common scams and receive alerts about new ones.
- Properly Vet Caretakers: Develop a thorough vetting process for caretakers who have access to your possessions or personal information before hiring them.
Fidelity White Paper: Ten Ways to Stop Financial Elder Fraud
National Adult Protective Services Association: https://www.napsa-now.org
Information from the World Health Organization: https://www.who.int/health-
AARP Fraud Watch Network: https://www.aarp.org/money/