By Andrea McKinney, CFP®
According to the 2018 Census Bureau estimates, there are over 52 million individuals in the United States over the age of 65. Their financial needs are unique and they are likely to experience many changes as they age. Since families can be scattered geographically and there is more potential for wide scale digital fraud, individuals age 65 and older need to be aware of the potential for financial abuse.
As people age, they may find it difficult to find someone they can trust to help them with their finances. At some point, it is likely that you or someone in your family will encounter a situation involving financial abuse of a senior. This form of abuse can be hard to detect but there are several red flags:
- Changes in account activity such as unusual transactions or a sudden increase in certain activities, like insufficient charges.
- Withdrawals of large sums of money or account activity inconsistent with the person’s ability.
- Change of acquaintances like a new friend or a relative who begins conducting transactions without proper documentation.
- Lifestyle changes such as mail that is no longer delivered, obvious health or mental problems that are not treated, or a messy appearance.
- Changes in mental state such as disorientation, paranoid feelings about money, or changing personality traits.
- Control / Ownership changes to property titles, wills or trusts without being able to explain why. Also, execution of a new power of attorney or changing account ownership for no apparent reason.
- Lack of communication, especially when the financial institution is unable to speak directly with the person who is the client or account owner.
- Exhibiting a lack of knowledge about one’s financial status.
The passage of the Federal law, the Senior Safe Act, encourages financial providers to report elder financial abuse situations without the concern of breaching client privacy. How can you, as an individual, protect yourself from falling victim to these predators?
- Consider what you will do when you are no longer able to manage and care for your finances independently.
- Put time and careful thought into identifying a trusted contact. This person could be a friend or family member.
- Hire a legal expert to draft a power of attorney. Be sure this person is someone you trust explicitly. This contact may be a different person than the one you selected to be your trusted contact.
- Consolidate your investments and check beneficiary designations.
- Register for the Federal Trade Commission’s national Do Not Call Registry.
- Be aware that fraud can happen either online or through your cell phone in the form of text messages and phone calls.
In closing, a national elder fraud hotline is now available to assist victims of fraud. The hotline can be reached at 1-833 FRAUD-11 and is staffed by case managers who can provide support as well as file complaints.