How to protect your parents from financial scams
When a scammer called Cameron Huddleston’s mother to tell her to wire money to claim a prize, Huddleston had to intercept the calls. Her mother, who had been diagnosed with Alzheimer’s disease, was convinced she needed to wire the money as soon as possible.
“That was a red flag for me. If you have cognitive decline, you don’t see those red flags anymore,” says Huddleston, who lives in Kentucky and is the director of education at Carefull, a service designed to protect the day-to-day finances of aging adults. She also wrote the book “Mom and Dad, We Need to Talk”, about having important conversations about money with your parents.
Scammers often target older people, in part because they have amassed greater wealth. “If you’re thinking from a criminal’s perspective, which target will give you the best returns: a broke 20-something struggling with student loans or a baby boomer with a few million dollars in retirement assets? ” asks Marti DeLiema, assistant professor of social work at the University of Minnesota School of Social Work.
According to the Federal Trade Commission, consumers age 60 and older filed 467,340 fraud reports in 2021, reporting total losses of more than $1 billion. Overall, consumers aged 60 and over are less likely to report losing money to fraud than those aged 18 to 59. But when they report a monetary loss, it’s usually for more money, especially among people 80 and older. They had the highest median loss of any group, at $1,500. The FTC reports that older adults are more likely than younger adults to lose money on scams involving tech support, prizes, sweepstakes and sweepstakes, and impersonation of family and friends. friends.
Here are some steps fraud experts suggest you take to protect your parents and other seniors you care about from being victimized.
Raise the subject
“Talking about scams can be one of the easiest conversations because we’re all targeted,” says Huddleston. And you can use your own experiences or new trends to spread them in a way that isn’t condescending.
DeLiema says explaining specific scams — like a stranger reaching out on social media saying they want to be friends and then asking for money, or fake text messages claiming to be a grandchild who needs help. immediate help – can greatly reduce the chances of someone falling for them. “If you know about the scam first, you’re 80% less likely to respond,” she says.
Rely on anti-fraud tools
A few simple steps can help avoid fraud, such as setting up phones to send unknown numbers to voicemail, using a credit freeze, and implementing stricter privacy controls on social media, says Amy Nofziger, director of fraud victim support for AARP. “These are things we should all be doing,” she says, adding that you can set it up yourself at the same time.
It’s also relatively easy to sign up for financial account monitoring or receive alerts for every transaction, Huddleston says. In some cases, it might make sense to allow adult children to monitor these accounts as well, depending on the parents’ comfort level and support needs.
Legal tools such as a proxyA guardianship or revocable trust can be among the most effective ways to protect a senior’s money from scammers, says James Ferraro, vice president and trust attorney at Argent Trust Company, a wealth management firm. headquartered in Ruston, Louisiana.
“If you funded a revocable trustthen you have a vehicle in place where you can quickly intervene if you suspect someone is taking advantage of your parents, whether it’s a fake charity or a “your grandson is in jail” scam in Mexico,” he said.
Know the warning signs
If a senior is suddenly reluctant to talk about finances, has difficulty paying daily expenses, or receives a high number of phone calls or text messages, these are all potential signs of fraud, says John Breyault, vice president public policies, telecommunications. and fraud at the National Consumers League, a nonprofit advocacy group.
Scam artists are adept at creating a false sense of urgency, Breyault says, telling their targets they need to send funds immediately or the IRS or some other authority will come. “They are incredibly inventive,” he adds, noting that methods and techniques are constantly evolving. The FTC reports that scammers even use artificial intelligence to mimic voices.
If fraud occurs, help authorities track and prosecute it by reporting it, says Nofziger. Start by going to your local police department and using the FTC Online Reporting Portal. The AARP Fraud Watch Network helpline has a toll-free number you can call: 877-908-3360.
The shame and embarrassment that people feel when they are victimized can make a stressful situation worse.
“Lead the conversation with kindness and empathy, without anger or contempt,” says Nofziger. “You can say, ‘I’m sorry this happened to you. Together, we will determine the next steps. There is no problem that we cannot solve or recover from.
Reassuring words that can protect seniors and their money from scammers in the future.
This article was written by NerdWallet and was originally published by The Associated Press.