By some estimates, financial scams targeting seniors cost victims over $2.9 billion per year. In some instances, family members, friends or neighbors are the perpetrators of these scams – also referred to as elder financial abuse – while in other instances, it’s an anonymous cyber criminal casting a wide net to see how many seniors unwittingly take the bait and send money.
Perhaps you’ve seen an elderly family member or neighbor fall victim to a financial scam before or you’re growing increasingly concerned about an older loved one’s ability to continue managing their finances. Of course, not all financial scams are alike; here are some common signs to watch out for:
- Scammers posing as government representatives (especially Medicare or Social Security)
- Counterfeit drug sellers promising low-cost alternatives for cash-strapped seniors in need of their prescription medications
- Emotionally manipulative scammers claiming to be long-lost family members in desperate need of money
- Legitimate-looking emails containing dangerous malware or viruses that could secretly infiltrate the senior’s Internet history and other information stored on the computer
- Scammers posing as financial advisors and promising to help seniors increase their rate of returns on retirement account investments
- Lottery/sweepstakes demanding a nominal fee to obtain the prize money (spoiler alert: there is no prize money)
These are just some of the many different ways people are scamming seniors out of their life savings, simply because they’re more trusting and not tech-savvy enough to recognize a potential cyber threat when it appears in their email inbox or phone.
To protect your loved ones from elder financial abuse, here are some strategies to try out as they get older:
Communicate with Kindness
One of the most heartbreaking things about elder financial abuse is that it frequently goes unreported because seniors either don’t realize they were scammed or they feel ashamed that they fell for a scam and decide not to tell anyone else in fear of further embarrassment.
For these reasons, it’s absolutely important that you and other family members maintain an open channel of communication with the elderly individual and refrain from admonishing (which could backfire and make them more secretive about their finances). Instead, you should focus on gently guiding them away from potential scams, proactively sharing useful information from credible sources – like the Consumer Financial Protection Bureau – and having regular discussions with them about finances and protecting themselves online.
Although Congress recently passed the Senior Safe Act to encourage financial institutions to take more responsibility for protecting seniors from financial abuse, it’s still critical that family members support each other to minimize the potential consequences of scammers preying on senior citizens.
Tighten Up Security Protocols
If one of your elderly loved ones currently does some or all of their financial management online, then you should work with them to ensure their security measures are up to date. For example, do they have two-factor authentication protections for their online bank accounts? Are their credit reports frozen (so nobody can take out a loan or line of credit in their name)? Do they have a relatively hard-to-guess password, or is it simply “password1” or “12345”?
LastPass is a great password manager that can help you manage your loved one’s passwords securely online. LastPass stores encrypted passwords online.
LastPass is a password manager that securely stores your passwords and personal information in a secure vault. As you visit apps and sites, LastPass automatically fills in your login credentials. All you have to do is remember your LastPass master password, and LastPass will autofill logins for you.
Stop getting locked out of your online accounts or struggling with frustrating password resets. Let LastPass remember your passwords for you, and keep you safe online.
You can also go a step further by installing browser extensions like Privacy Badger, AdBlocker and HTTPS Everywhere on their computer to shield their web browsing activity from potential scammers and prevent them from accessing dangerous websites without realizing the risks.
Block Spam Robocalls
Seniors are among the most vulnerable members of society when it comes to financial fraud conducted over the phone. By some estimates, nearly 45% of calls in 2019 are from scammers or robocalls, and while many companies are scrambling to protect people from phone scams, financial losses are still prevalent to this day (the FTC says the median amount lost to a phone scam in 2017 was $720 – yikes!).
To protect your elderly family members from phone scammers, you can install smartphone apps like Robokiller and Truecaller to automatically detect and ban spam calls. However, scammers have been increasingly “spoofing” calls – stealing real phone numbers with local area codes to appear more legitimate – so it’s also recommended that family members discuss phone scam risks with seniors to equip them with the knowledge they need to avoid fraudsters who get past security mechanisms.
Obtain a Power of Attorney
If you are dealing with an elderly family member who isn’t cognitively capable of making all of their own decisions anymore – especially regarding financial management – then it’s crucial that you work with a legal advisor to obtain financial power of attorney. In some cases, unscrupulous family members abuse this privilege by secretively stealing the elderly individual’s money, so it’s important that your family chooses a responsible, trustworthy person to acquire power of attorney.
This legal designation lets you at least partially control your loved one’s financial management (depending on your state’s regulations for financial power of attorney, the senior’s cognitive capacity, and other factors).
Protect Elderly Family Members
It’s a sad fact that seniors are among the easiest targets for financial crimes, but taking a proactive approach to inform your loved ones of possible scams and increasing their online security can prevent a lot of harm from occurring. While there’s no magic solution to ending elderly financial fraud forever and to protect elderly family members, these strategies can help you protect your family members without encroaching too much on their desire for independence in their golden years.