Tips for Preventing Elder Fraud
A neighbor was at home with her young children when she received a phone call from someone claiming to be in IRS agent. He told her that she owed back taxes, demanded that she pay immediately over the phone, and threatened that another agent was in route to arrest her if she did not comply.
Sensing that something was amiss, she refused to pay, hung up the phone, and called me in a panic. Does the IRS really collect payments on the phone? Would she really be arrested? What should she do?
Hanging up was the best thing she did. The person who called her was a con artist, and she thankfully did not become a victim of his scam.
Unfortunately, many people, especially senior citizens, do become victimized. Con artists target seniors because they are sometimes isolated and lonely. Additionally, some seniors have declining cognitive ability, which makes them more vulnerable to fraud.
Often, con artists pose as government officials claiming that the victim owes money, like in my neighbor’s case. They may also suggest that the victim has won a lottery or sweepstakes and needs to send money or share bank account information to claim the winnings. Another tactic is to pose as a family member in trouble. For example, I recently got an email from my sister’s hacked account claiming that she took an unexpected trip to Ukraine and needed a loan because her credit card would not work.
An article in Consumer Reports’ November 2015 issue reports that fraud complaints rose almost 50 percent between 2012 and 2014, and estimates that seniors and their families lose $3 billion to more than $30 billion to fraud each year.
So how do you protect yourself and those you love?
Tips for Seniors to Protect Themselves
The article provides some great tips on how seniors can protect themselves from con artists:
- Opt out of robocalls and calls from telemarketers. Nomorobo blocks robocalls and calls from telemarketers. The service is free for customers with VoIP service. If you don’t have VoIP, you can also sign up for the National Do Not Call Registry to limit calls from telemarketers
- Opt out of mail solicitations through dmachoice.org.
- Before you hire any contractors to work on your home, do your research. Make sure they are licensed and bonded. Always get multiple estimates from reputable contractors before before choosing a contractor.
- Don’t hand over money to a financial advisor without first checking his or her credentials for regulatory actions, violations, or complaints. You can research your broker at finra.org.
- For added security, arrange for your bank to send statements to a trusted person, like a family member, who doesn’t have access to your account. That way an extra set of eyes can check your account for suspicious activity.
- Talk to a lawyer about getting a durable power of attorney appointing someone you trust to handle your financial affairs if you become incapacitated.
Tips to Protect the Seniors in Your Life
There are also things you can do to protect the seniors you love:
- Visit them often and at unexpected times to check for signs of cognitive decline, such as changes in hygiene or eating habits, forgetfulness, and stacks of unopened mail or unpaid bills.
- Check for warning signs of fraud, such as large withdrawals from bank accounts, numerous uncharacteristic smaller withdrawals, checks written to people you don’t know, changes in spending habits, or a close relationship with a much younger person who has become increasingly influential and for whom lavish gifts are purchased.
- Make sure your loved-one stays active and involved. Isolation and loneliness increases the chances that a senior citizen will become financially exploited.
- If the senior in your life exhibits signs of cognitive decline, set up a bank account for him or her with limited funds and a spending limit on the debit card. That way, if fraud occurs, the loss would be minimal.
- Monitor their bank and credit card statements for suspicious activity.
- Caution your loved-one to be wary of those who pressure them to make immediate decisions, request private information such as social security numbers, or demand cash up front. Personal information, such as names of family members, bank account information, and social security numbers should not be disclosed over the phone. If someone claims to be from a particular government agency, that information should be verified. If someone claims a family member is in trouble, other family members should be called to verify.
- Make sure your loved-one has a well-drafted power of attorney, which can avoid a guardianship or conservatorship if they become incapacitated. If a power of attorney does not exist, it may be necessary in extreme cases to file for a guardianship or conservatorship.
Fraud is all around us, but targets the most vulnerable among us. If you think you or someone you love has been a victim of fraud, take action immediately. To report fraud, contact the Consumer Financial Protection Bureau, the Financial Fraud Enforcement Task Force, or the Texas Attorney General’s Office.