The financial exploitation of older people is a rampant epidemic in America. A recent report by the Consumer Financial Protection Bureau revealed that each incident of financial fraud cost older adults ages 70 to 79 an average of $45,300. And when the older adult knew the suspect, the average loss rose to about $50,000.
As older adults experience more wealth events – from selling a home to making IRA withdrawals – they become more vulnerable to scammers. This can often happen when older people lose touch with those who can help protect them. While technology has made lots of things easier, including managing money, it has also increased the ways for scammers to weaponize fraudulent activity. It is more critical than ever to empower older adults to protect their financial accounts – and for trusted family and friends to help them do so, before it’s too late.
World Elder Abuse Awareness Day is observed in June. This is a great reminder and call to action to act on this topic. Through increased awareness and concrete steps, we can help our loved ones better protect their financial assets.
How to spot financial fraud
Former FBI section chief of the Cyber Threat Division Greg Ruppert, now the head of financial crimes risk management at Charles Schwab, said, “I’ve seen every trick scammers use to separate older adults from their money and they are ever more targeted and sophisticated in their approach. Financial scams, no matter the amount lost, are devastating to older adults, who rely on those resources and are unable to recoup the loss.”
Common types of scams targeting older adults include healthcare insurance scams, counterfeit prescription drug schemes, romance scams, person-in-need scams, lottery scams, funeral and cemetery scams, telemarketing/phone scams and investment schemes.
How family members can help
Help protect your older family member against financial scams by staying engaged so you can spot the signs of an investment scam and help if warning signs appear. Speak to them regularly and be on alert for clues, for example if they mention being asked for money, or that managing their finances is confusing or overwhelming.
When you visit them in their home, notice visual cues such as unpaid bills or piles of unopened mail and physical clues like fearful behavior, worsening of an illness or disability as the result of the pressure from a scammer’s tactics.
One of the biggest risk factors for older adults when fraud has taken place is being too embarrassed to admit they may have been scammed to ask for help. This hesitancy can only be overcome with regular communication and wellness check-ins with trusted family members.
5 steps to safeguard financial assets
Here’s how you can avoid scams and make sure you and your senior family members are not victims of financial fraud:
* Designate a trusted contact. Financial institutions like Charles Schwab provide an option to designate a trusted contact – a person who can speak to your financial services provider in the event of an emergency, such as financial exploitation.
* Get your financial affairs in order. Understand your full financial situation, including locating and filing key financial records, creating or reviewing wills, establishing trusts and power of attorney declarations, and updating account and insurance policy beneficiaries as your life situation changes.
* Guard your passwords. According to the 2018 FBI Internet Crime Report, people over 60 experience the most incidents of online investment scams and the highest monetary loss. To protect your online financial accounts, create unique passwords and never share usernames, logins, passwords or personal identification numbers.
* Get smart with your smartphone. Scammers can mask their phone number to make it appear that a call is local or from a trusted party. Prevent telemarketing scams by joining the National Do Not Call registry and let calls from unknown phone numbers go to voicemail.
* Up your technology game. Local recreation centers and libraries offer technology and digital literacy classes to help older adults and their family members protect themselves online and learn about the latest financial schemes.
To learn more about how to educate yourself and your older family members on the latest financial schemes, visit: https://www.schwab.com/resource-center/insights/section/resources-for-senior-investors.