Seniors get scammed out of billions of dollars each year. Even worse, most of this money can’t be recovered. When someone is living in assisted living, they’re often at greater risk. To keep your older adult’s finances safe, The Dollar Stretcher interviews an expert who explains why seniors are more vulnerable to financial scams and what to watch for to protect against fraud.
According to the National Committee for the Prevention of Elder Abuse, there are a number of ways that the elderly can become financial victims. Experts put the total losses in excess of $3 billion annually.
So how can you help protect your parent’s finances if they’re living in an assisted living apartment?
To help us understand what we can do to protect the assets of our elderly parents, we contacted Rod Griffin, Director of Public Education for Experian.
Q: How vulnerable are the elderly to financial scams and identity theft?
Mr. Griffin’s answer: The elderly are among the most vulnerable targets of identity theft and financial fraud.
They often have substantial accumulated assets and strong credit histories, but little understanding of personal finance, digital banking, or direct involvement with their own finances, which makes them a prime target.
Q: Assuming that an adult child is getting duplicate copies of statements, what should they watch out for?
Mr. Griffin’s answer: If an adult child is assisting with or overseeing an elderly parent’s finances, they should watch for the same things they would for themselves.
Are there bills they don’t recognize? Are there charges in billing statements that are unaccounted for, and are checking and other accounts reconciling correctly? Have collection accounts suddenly begun arriving from unknown lenders?
They should also check any medical bills for inaccurate charges or treatment that was not provided. Are payments from pension funds, other retirement funds, and the Social Security Administration arriving in a timely manner or at all, and if so, are the payments in the correct amount?
Q: What are the most common identity fraud scams that seniors face?
Mr. Griffin’s answer: Unfortunately, the elderly are particularly susceptible to fraud by caregivers, friends, and family members. They also are more frequently victims of digital fraud, such as phishing, because they lack experience with online activity.
Seniors may also be at greater risk of medical fraud, particularly insurance scams, because they often have greater and more frequent need for medical care.
Q: Some elderly have fairly complicated financial affairs. Should you encourage them to simplify as they get older?
Mr. Griffin’s answer: It’s a good idea to review your financial resources at any age, but particularly so for the elderly. Reviewing their credit report might reveal open accounts that have been forgotten.
It’s easy to put a credit card in a drawer and forget all about it. Unused accounts can be a source of fraud, so closing them can help reduce that risk. Reducing the number of accounts you have can help make it easier to protect them.
Q: Many elderly people aren’t that internet savvy. Does that make them more likely to be victims of identity theft and other financial scams?
Mr. Griffin’s answer: In today’s world of digital banking, email and social media, seniors are particularly at risk.
They don’t always understand the risk associated with sharing sensitive information online, don’t recognize spoofed websites, or realize emails may use social engineering to get account numbers or passwords.
Q: When a parent moves into an assisted living home, they’re unlikely to be requesting credit. Is there any reason that they shouldn’t “freeze” their credit?
Mr. Griffin’s answer: Freezing a credit file can make sense for seniors, particularly if they no longer need access to new credit or other services.
Some state laws allow seniors to request that their credit file be frozen at no charge. Freezing a credit file does not prevent use of existing accounts. If they plan to apply for new credit, it may be best to delay freezing the file.
The assisted living center may require a tenant screening, which could include reviewing a credit report. If so, waiting to freeze the file until after the process is approved might simplify the process.
Recommended for you:
- Prevent Elder Fraud by Getting Rid of Junk Mail
- How an Elder Law Attorney Can Help Seniors and Caregivers
- 5 Important Legal Documents for Caregivers
Guest contributor: Gary Foreman is the editor of The Dollar Stretcher.com – a site dedicated to “Living Better…for Less” since 1996. You’ll find an active section addressing the financial issues of baby boomers. Visit today!
Image: Connexions Resource Centre
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