How to Help Aging Parents Avoid Financial Scams
In the seven years I worked with the elderly, I met so many wonderful, trusting people. Sometimes, too trusting. I had clients who never locked their doors, clients who loaned money and cars to paid caregivers and clients who responded to every piece of mail solicitation they received, sometimes with a check.
If you are not in charge of your parent’s finances, you can still watch out for their financial well-being to ensure they aren’t being taken advantage of. Whether you are a local or long-distance caregiver, there are certain things to watch for to help them avoid scammers. Financial fraud is a form of elder abuse and shouldn’t be taken lightly.
Inappropriate Caregiver Relationships
Most caregivers go into the field because they truly enjoy helping others. Unfortunately, like in every field, there are going to be a few bad apples. If your parent has a caregiver who restricts your access to your parent, is unusually close to your parent after only a short time, or is a bit too aware of your parent’s financial situation, keep a close eye on their relationship.
Some red flags that your parent’s paid caregiver is taking advantage of your parent’s kindness are:
- More cash withdrawls than normal
- Checks written to caregiver or “cash” that are outside the normal financial arrangement
- Valuables (car, jewelry, etc.) being loaned to caregiver
- Missing valuables
- Business or personal loans to caregiver
- Frequent “gifts” to caregiver
- Unpaid bills even when funds are available or interest in making changes to will or power of attorney
- Signatures on checks that don’t appear to be written by caree or sudden sales of stocks
If your parent has a hired caregiver, you should regularly remind discuss protecting their financial assets. Some things they should do include:
- Make sure financial paperwork (bank statements, financial documents, social security cards/checks, etc) are not left out in the open.
- Don’t share credit card, PIN numbers, or personal financial information with caregivers or others. This can be difficult if your parent is unable to go to the bank, pay bills etc. If they are using their caregiver to assist with these tasks, be sure that someone is regularly reviewing finances.
- Remind them that their caregiver is an employee, who receives a salary. If they want to give a gift to the employee, think of it as a bonus, for going above and beyond their duty. A bonus is given periodically, not on a regular basis.
- Establish a durable power of attorney and require that if there is a change to the arrangement the prior person must be notified and agree to the change.
- Reach out to medical providers to require that they speak with your parent alone, without the caregiver present to ensure that your caree is able to speak freely.
General Financial Fraud Against Elderly
While the biggest risks of financial fraud are paid caregivers or a family member who is trying to take advantage of an elderly relative, you should also caution your parents about the following fraud risks.
- Telemarketing/Phone Scams: I don’t know about your parents, but my parents answer the phone, regardless of whether they recognize a phone number. Remind your parent to never share private financial information (social security number, credit card numbers, bank account numbers, etc) over the phone, even if the person says they are with the IRS or a credit card company. If they are concerned, they can call the IRS or credit card company directly, using the phone number on the organization’s website to follow up. Other phone scams include fake family injury claims, trapped family members who need money wired to them or fake charitable donations. In all cases, they should call the organization or family member directly, not share financial information over the phone.
- Fake Family Member Phone Scam: A scammer pretends to be a relative and asks that the senior send money via Western Union for a financial crisis. Again, if there is a concern, they should call the family member directly – never send the money via Western Union before confirming.
If your parent is online, remind them that these scams can also happen through email so they need to be vigilant. One thing to remember when having these types of conversations is that how you approach the discussion is almost as important as what is said.
If you approach your parents in a condescending manner, indicating that they aren’t savvy enough to recognize these risks, they will likely shut down. Approaching it in a way that you’re sharing information that you just came across for yourself can help make them feel less defensive.