Fraud Against the Elderly
How You Can Spot and Prevent Financial Abuse
Each year millions of senior citizens are victimized by financial fraud or theft of money, property, or valuable personal information. Often, an adult child or other relative is responsible. Other situations may involve trusted individuals such as caregivers, legal guardians, investment advisors, or new “friends.” Since the types of abuse may differ widely, it is important to take a variety of precautions. Here are suggestions for protecting yourself and your loved ones:
Choose an advisor carefully. If you are considering hiring a new broker, attorney, accountant, or other professional, even someone recommended by a friend or relative, it is best to independently look into that person’s background and reputation before investing money or paying for services. For example, you can confirm that this person is properly registered or licensed and has a clean record with regulators and other consumers. When in doubt about how to research this information, ask your state Attorney General’s office or local consumer protection agency for guidance. Visit State Attorney Generals to find the Attorney General of your state.
Make sure you not only understand the role the advisor will be playing, but trust that this individual will do what is best for you and your finances. Do not be afraid to ask questions or say no--after all, it is your money!
Be careful with powers of attorney. At some point, you may want to have a power of attorney, a legal document that authorizes another person to transact business on your behalf. While powers of attorney can be very helpful, be careful whom you name as your representative. A Power of attorney can be easily misused because it allows the appointed person to step into your shoes and do everything you can do, including taking money from your account and borrowing money in your name.
Protect your personal financial information. Never give out your bank account numbers, Social Security numbers, personal identification numbers (PINs), passwords, or other sensitive information unless you initiate the contact. These requests may come from an unsolicited phone call, text letter, email, or a person who shows up at your door. Be especially wary of someone who congratulates you about winning a prize or lottery but first demands payment for taxes or other fees.
Keep your checkbook, account statements, and other sensitive information in a safe place. Shred paper documents containing sensitive information that are no longer needed.
Closely monitor your credit card and bank account activity. Review your account statements as soon as you receive them and look for unauthorized or suspicious transactions. If you find any, report them to your bank immediately. For more information on protecting your money, visit FDIC Consumer News: Credit and Debit Card Billing Issues October 2018.
Review your credit report. One way to monitor your finances is to order your free annual credit report. Check to make sure all of the information on your credit report is accurate and complete. Check for the inquiries from companies you do not recognize; report to the credit-reporting agency if you see anything suspicious.
Credit agencies are required to provide you with a free report once a year, upon request. The big three agencies are Equifax, Experian and TransUnion. You might want to check a different one every four months to spread it throughout the year, say January, May and September.
Take your time when deciding on a major financial decision or investment. Make sure you understand the transaction and ask questions if you do not. If necessary, ask a lawyer or financial advisor to help you understand the documents and discuss what is best for you. Walk away from anyone who says you must make a decision or otherwise do something right now.
Be aware of scams involving reverse mortgages. These loans enable homeowners age 62 or older to borrow money from the equity in their homes. However, reverse mortgages can be complex products with a variety of risks and costs. Numerous schemes by unscrupulous individuals using deceptive offers and high-pressure tactics to steer senior citizens into using the funds from a reverse mortgage for inappropriate or costly loans or investments have been reported. For guidance on the responsible use of a reverse mortgage, including how to locate a lender or an approved housing counselor, visit the U.S. Department of Housing and Urban Development Home Equity Conversion Mortgages for Seniors.
Finally, here are additional tips:
- Beware of callers asking for money or information. To reduce the number of telemarketing calls you receive, consider signing up for the national Do Not Call Registry at www.donotcall.gov. If you are on this list, be suspicious of calls from any company or organization that you have reason to believe is not eligible to contact you under the registry’s rules.
- Do not comply with requests from strangers to deposit a check into your account and wire some or all of it back. If you send the money and the check is counterfeit, you may be held responsible by your financial institution for the losses. For more information on fake checks, visit FDIC Consumer News: Beware of Fake Checks August 2019.
- If you use social media, many security experts advise against posting the names, addresses, birthdates, and daily activities of relatives because those can be used by a thief. Grandparent scams are on the rise. This type of scam involves con artists who look for personal information on the internet that they can use to call or email an elderly person and pretend to be a relative in distress — such as a grandchild being injured, in jail, or lost in a foreign country — and needing money sent fast. For more on these types of scams visit FDIC Consumer News: Beware, It's a Scam!.
Financial fraud is on the rise. Knowing how to spot and prevent it will help you protect yourself and your finances.
FDIC Consumer News: Avoiding Scams and Scammers
FDIC Consumer News: Scammers Pretending to be the FDIC
Federal Trade Commission (FTC): Scams