Key takeaways
Elder fraud is an increasing problem given the growing population of Americans 65 and older.
Seniors can be defrauded by strangers, or quite often by family members, friends or caregivers who should be looking out for their interests.
Steps to take to combat elder fraud include designating a trusted contact to have a “view only” access to their relative’s finances and reminding loved ones that there is rarely a need to rush into an investment or other purchase.
Any of us can fall victim to fraudulent schemes and scams, but the reality is that older people are common targets. New technologies and platforms have allowed fraudsters to become more sophisticated and made it harder for seniors to navigate the exchange of information online. It’s estimated that financial fraud affecting older adults over age 60 totaled a whopping $3.1 billion per year in 2022.
“The increasing reliance on technology among those who are elderly and vulnerable introduces even more avenues to be targeted,” says Sarah Darr, senior vice president and head of financial planning at U.S. Bank. “It’s especially important for those individuals to be more vigilant or ask family members for help.”
Sometimes an older adult may not want to proactively ask for help in their financial matters, viewing it as a loss of independence. Fortunately, for adult children or caregivers of seniors, there are collaborative steps you can take together to help prevent elder fraud. Let’s examine common types of elder scams and how you can safeguard your loved one against this form of abuse.
According to the National Council on Aging, some of the most common types of elder fraud include:
One of the biggest tactics for committing all types of fraud is through using information shared online. Perpetrators can use information obtained through digital channels or tap into existing data from companies with which someone already holds legitimate online accounts.
“It’s important to be aware that information shared online is not as private as people might think,” says Darr. “It actually might put individuals at greater risk, as predators can illegally obtain data access to commit fraud.”
Having conversations about how to safely use new technologies or platforms—and what information to safeguard—is a great start to saving someone you love from elder fraud.
“It’s important to be aware that information shared online is not as private as people might think. It actually might put individuals at greater risk, as predators can illegally obtain data access to commit fraud.”
Sarah Darr, senior vice president and head of financial planning, U.S. Bank
Family members with good intentions should talk to elderly family members or friends about the benefits of having at least one more set of eyes to help them keep tabs on their finances. It can be especially important if cognitive abilities become an issue for the person being approached.
Since there can be unfortunate situations where family members or close friends are the ones taking advantage of an elderly person, Darr recommends multiple people monitor financial activities for an elderly person who may be susceptible to such exploitation.
“It’s important to acknowledge that you want the elderly individual to continue to live freely and conduct their own affairs, and that you think it would be helpful if you and/or another trusted person stepped alongside to provide support,” says Darr. “Be open about sophisticated scammers that are looking to take advantage of those who have been diligent in building wealth and saving it. Express your desire to help protect the wealth they’ve worked hard to accumulate.”
Help assure them that your interest is that all involved parties agree on a strategy to manage money going forward, and that you plan to continue to work toward their benefit.
Now that you know what to watch for and how to discuss elder fraud with a loved one, below are steps to help prevent elderly fraud:
While it’s not possible to eliminate the risk of fraud, being aware of how elder fraud happens and ways to prevent it is a solid start. It can also be beneficial to develop a relationship with a banker and financial advisor to help monitor financial activity; this provides another level of asset protection for an elderly person who may be susceptible to fraudulent activities.
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