Preventing elder fraud
Summary
Elder fraud can be devastating to experience and extremely difficult to recover from. The best way to prevent such fraud is to stay alert, check in often, and be prepared. This article discusses some key steps to prevent people from falling victim to financial scams and theft, including frequently reviewing assets, having a trusted contact, keeping a paper trail, and sometimes waiting a bit before divulging sensitive information.
Frequently review assets
At least once every six months, sit down and take a good look at all assets, debts, and other financial matters. In addition to a monthly budget balancing session, financial checkups twice a year can reveal patterns of behavior and money handling that might be cause for alarm.
- Bank accounts. Check each account for unusual withdrawals, new people added to the account, or large transfers between accounts.
- Investment accounts. Look for activity that signals a sudden shift in investment priorities, or performance that is dramatically different from the current national stock and bond market trends. This could indicate pressure from someone to purchase stocks or investment products that are not in the person’s best interests.
- Mortgage documents. There are definite benefits to refinancing a mortgage or taking on a home equity loan for people on fixed incomes. There are also plenty of predatory lenders out there willing to take advantage of people who might not fully understand the process. Take a close look at home loans, and use this opportunity to ask questions or talk about whether refinancing a mortgage is a good idea.
- Car loans. New or existing car loans are often the largest single monthly payment for people who own their homes outright, so unexpected changes to these loans can indicate financial trouble or undue influence from someone who does not have the best interests of the person in mind.
- Credit cards. Unusual activity, large charges, balance transfers, and added cardholders might be signals that someone else is trying to drain money from the person, or is taking advantage of their generosity. Unusual or unauthorized purchases can also indicate identity theft.
- Credit reports. It’s a good idea to set up credit monitoring with a person’s bank and check it several times a year. Any major change to the person’s credit rating will appear here and might pinpoint problems with their money.
Have a trusted contact
It’s important to designate someone as a trusted contact who will be contacted by financial advisors and bank managers whenever a new person is added to an account, or if a new account is opened. Close monitoring and communication are crucial to protecting assets from fraud. Having a point person who knows the ins and outs of a person’s finances will help bankers and financial advisors work to safeguard their client.
Keep a paper trail—but dispose of it safely when it’s time
A paper trail can be a major asset if the unthinkable happens and a person becomes the victim of identity theft or financial abuse. What follows are some suggestions for keeping such a trail and disposing of it when the time comes.
- Pay with checks or, even better, credit cards when making purchases or donations. A credit card company and bank can be valuable allies if fraud is suspected.
- Keep documents in a secure place out of reach of cleaners, home aides, or anyone else that might enter the house. Lock up checkbooks and statements to prevent them from being stolen.
- Shred statements, receipts and canceled checks before throwing them away. This goes for any financial documents that might go into the trash, including credit card statements and pre-approved card or loan offers.
When in doubt, wait it out
Scammers often create a false sense of urgency in order to prey on frightened, nervous, or anxious victims. Advise people to pause before giving away sensitive information. What follows are some best practices.
- Never give information on the phone unless you have initiated the conversation.
- Before giving your date of birth, passwords, bank or credit card numbers, or social security number, ask the person on the phone if your representative can call them back at the institution’s 1-800 number.
- Check IP addresses and links before clicking. Scammers and identity thieves have grown increasingly convincing, and often pose as legitimate organizations to send a link advertising winnings or rewards, or notifying victims of problems with their account that need immediate attention. Older people especially might not think to look carefully at a phone number or website link before clicking it and entering sensitive information.
- Consult with a trusted contact before agreeing to any financial transactions that cause uneasiness. Never pay a fee or a person if you don’t understand the transaction. Scammers will often ask victims to pay a tax or fee in order to collect a prize or sweepstakes.
Related information
Having the elder fraud talk
Overview of elder fraud
