Elder Fraud: 5 Ways to Protect the Ones You Love
This blog post was originally published on the FICO Blog on June 15, 2020.
In addition to being a passionate defender in the fight against child identity fraud, I am also an ardent supporter of elders' financial well-being. With this year's theme of "Access to Justice: Legal, Social and Economic Services for Older Victims of Sexual, Physical and Financial Crimes," a rise in COVID-related elder fraud schemes provides a perfect reason to put financial protections into place for beloved family members.
Based on my experience as the family fiduciary of my grandmother's finances, here's a quick list of action items to get you started.
Tip 1: Be Proactive
The best time to assist older people with the financial affairs isn't when they fall ill, or otherwise decline physically or mentally. It's long before. As grandparents or parents get older, there should be a family conversation that includes them in developing a plan.
- Who will be given power of attorney? This task should be executed legally, including filing paperwork, in the correct jurisdiction.
- Where are the family member's financial accounts? If it's not possible to get this list, the elder's mail and previous tax returns will be very helpful.
- Who will manage the family member's accounts? Sometimes it is prudent to assign more than one person to this task, for accountability and to reduce finger-pointing if a bad investment decision is made.
- Should the elder's accounts be jointly held with the family member managing them? This streamlines administrative tasks.
- Schedule regular financial check-ins with the elder and other family member of the financial team to make sure you remain on the same page.
Tip 2: Activate Alerts
Keep an eye on the elder's accounts to receive alerts from banking and investment firms' apps, to apprise you instantly on unexpected or large transfers, or if a balance falls below certain levels.
Tip 3: Freeze Credit
If the elder will not be applying for new credit cards or loans, consider a credit freeze. It's the same process I explained in this recent post. This will also help prevent others who may gain access to the elder's credit cards from requesting credit line increases.
Tip 4: Be on the Lookout for Scams
Elderly people are typically considered to be among the more vulnerable segments of the population, and fraudsters exploit this. Educate yourself on how criminals specifically target the elderly, and teach your loved one what elder fraud scams are and how to avoid them.
Since today's elders are not digital natives, this will probably include your taking the opportunity to show them what phishing text messages look like. Play a voicemail message from a travel-award scam, if you get one. Make fraud discussions a regular occurrence since many pop up quickly, such as in the wake of COVID-19.
Tip 5: Block Solicitations
Register your elder's phone numbers on donotcall.gov (or your nation's version of it) to reduce the number of solicitations. Help your elder understand how to be skeptical of unfamiliar callers who do get through.
The good news is that you can start protecting your beloved elders today. The Consumer Financial Protection Bureau (CFPB) just released the Elder Fraud Prevention and Response Networks Development Guide, an online resource to help communities form collaborative networks to better prevent and respond to elder financial abuse. The Guide offers useful planning tools, templates, and exercises. There are similar guides in other countries, such as this one from the charity, Age UK.
Any questions? Follow my multi-generational efforts to fight fraud and DM me on Twitter @LizFightsFraud.