7 Ways to Protect Your Aging Parents From Financial Abuse
Even if your aging parents have always been financially savvy, they could still be in the cross-hairs of identity thieves and financial scammers. While it's upsetting to contemplate, it's important to realize that even trusted caregivers or family members may view your parent as a source of easy money.
Financial abuse of elders costs Americans around $36 billion each year according to a report by financial services firm True Link. Even with those daunting statistics, you can help your parents spot signs of financial abuse and take steps to prevent it.
Red flags for financial abuse of elders
- Unusual bank and credit card account activity: If you help your parents pay monthly bills, watch for substantial, frequent, or unexplained withdrawals from bank accounts. If your parents mention unexplained transactions, investigate.
- A new "best friend": Does Mom have a new friend you've never met who takes her shopping? Maybe Dad's neighbor mentioned an unfamiliar man stopping by frequently. These people could be legitimate friends, or they could be adept at spotting easy targets when it comes to taking advantage of senior citizens.
- Financial transactions without proper documentation: If a caregiver uses Mom's credit card to buy household groceries but never hands back a receipt, the caregiver could be making personal purchases. Cousin Bob may be helping your dad around the house, but he could also be withdrawing extra money from the ATM with Dad's debit card instead of just the amount requested.
- Sudden unpaid bills or insufficient fund notices: Your parents may not realize the actual balance of their bank accounts due to unauthorized withdrawals. Or perhaps a friend or relative hits them up for a "loan" or money gift. Your parent may even know that something is amiss but is embarrassed to tell you
Tip: Check your parents' credit report annually for unexpected accounts and inquiries. Someone could be trying to obtain credit in their names.
7 steps to prevent financial abuse of elders
1. Talk about moneyFINRA suggests easing into a conversation with your aging parents about money by using "I" statements instead of "you" statements. Also, it's important to share that you have your parent's best interests in mind, and you're having this conversation because you love and care about your parent.
2. Offer to assist your parents with monthly bill paying
This way, you can monitor account activity and keep an eye out for suspicious transactions.
3. Meet your parents' friends
The American Bankers Association recommends asking about new people in your parents' lives. Find out specifics, such as whether the new person is "helping" them with money management or has access to their bank accounts.
4. Be present in your parents' lives
Visiting or talking with your parents regularly allows you to stay tuned in to their financial situation. They'll also be more likely to confide in you if they suspect that someone is taking advantage financially.
5. Notify your parents' bank
If you suspect elder financial abuse, report suspicions to your parents' bank and enlist the management's help to stop future transactions by that person.
6. Carefully vet caregivers
Always run a background check on your parents' caregivers to ensure that person doesn't have a history of theft or fraud. You can purchase a background check from your state police or a private company. Alternatively, you can order specific types of background checks through Care.com, a company that connects families with caregivers. You can also look up free public docket information for criminal and civil cases in many cities, counties, and states.
7. Check credit reports regularly
Review your parent's credit reports from the three major credit bureaus — Equifax, TransUnion, and Experian. Each consumer is allowed one free annual credit report from each agency, which you can order from one central website. You can also sign up with sites, such as Credit Karma or Credit Sesame, for free credit report access and monitoring.
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