Preventing Elder Fraud – Four Proactive Steps for Family Members

_{By Liz Hacquebord, Director of Financial Fraud Analysis & BSA Officer}

June is Elder Abuse Awareness Month and recognizes the need to build strong support for seniors in all aspects of their lives.

When it comes to financial matters, the elderly are unfortunately a prime target for scammers and bad actors. In addition to being aware of common scams and identity theft practices, family members can play an essential and preventative role in helping to protect their elderly loved ones from financial harm. 

Here are four steps that family members can take: 

1. Offer to go over bank statements and account activity with the elder. Look for changes in the elder’s established financial patterns, and watch out for the following “red flags”:

• Large, frequent, or unexplained withdrawals (including ATM withdrawals or debit card purchases).
• Change in volume of checks written, including sudden increase in checks to individuals or companies with no prior connection to the elder. 
• Significant drop in account balance (may include sudden “bounced” check or overdraft fees).

2. Understand who can access or receive information about the elder’s accounts. Make sure your loved ones have the right legal and financial arrangements in place to enable you or other trusted family members to receive information or help with the elder’s accounts if needed. Sometimes there are misconceptions about what information banks can disclose to family members of a victim of elder abuse, especially when a situation is heightened and fraud has already taken place. Common arrangements to permit access to an elder’s accounts include the naming of a power of attorney or a joint account owner. 

• Power of Attorney.  A power of attorney will spell out who the elder will permit to access their accounts and what financial choices they're comfortable having that person make.  The elder should give careful thought to selecting an individual to be given such financial responsibility, and should consult an experienced attorney with any questions.
• Joint Account Owner. Having a joint account holder on an elder’s account may also offer protection because joint account holders can be contacted about suspicious account activity, but the elder should be very careful when naming a joint account owner. Money deposited into a joint account belongs to both account owners equally, which can have a wide array of implications to the elder’s finances.  Additionally, when one of the joint account holders dies, the remaining account holder becomes the sole owner of the joint account.

3. Encourage elders to be open and honest when they may suspect falling victim to a scam or fraud. So many elders are afraid to say when they’ve been scammed because they may be ashamed or fear losing their independence. Reporting the issue to the applicable parties such as the bank or local authorities helps others in the long run. When more people come forward and report scams, it helps to link cases together to get more attention from national law enforcement. 

4. Come up with a code word to dispel potential scams and fraud. Let’s say that your elderly parent receives a call that a friend or relative needs money to help with an emergency – like paying a hospital bill, getting out of jail, or leaving a foreign country. Also known as a “grandparent scam”, these scenarios are often met with high-pressure financial demands and timeframes, forcing the person to take action quickly and without much time to think. This can include asking the elder to transfer or wire money from an account, send a Venmo or person-to-person payment, or visit a branch to take out cash. If the scammer claims to be a family member or a close family friend, having a predefined code word to use in these situations can help them verify if the claim is legitimate. By asking the potential scammer to say their code word, it gives the elder a way to verify the legitimacy of the ask before they can get in touch with other family members or trusted friends for help.

One of the biggest benefits of working with a local community bank like Middlesex is that we build relationships and get to know our customers. We have protocols in place to help protect our customers, especially when they visit a branch looking to take out large sums of money.  

If you suspect elder abuse, talk to the individual to determine who is involved and what has happened. Contact us at 1-877-463-6287 or any other financial institution that may be involved as soon as possible for further assistance.

Check out our additional tips to protect seniors and visit our Security Center to learn more.