$36 billion a year in elderly fraud
Protecting Elderly Parents from Scams
by Gary Foreman
They protected you when you were small, but now your elderly parents need your protection. Not only against physical abuse, but they also need protection against financial scams targeting seniors.
A recent survey estimates that there could be $36 billion in fraud against seniors annually, and that more than 5% of cognitive adults will become a victim in any given year with 3 in 10 state securities regulators saying that the problem is getting worse. (source: American Journal of Public Health)
To help us understand the problem and what we can do to protect our elderly parents we spoke with Susan Hodges. Ms. Hodges is a licensed nursing facility administrator (LNFA) and witnessed scams up close throughout her years of working in nursing homes.
Q: Are some elderly care facilities better able to prevent scams than others? If so, how can you identify the good ones?
Susan Hodges: Some elderly care facilities are better able to prevent scams by having a system of checks and balances. For example, when a resident in a facility receives any form of monetary funds, different employees are involved in the processing. One will pick up the mail (checks or funds). Another one will enter the funds into the computer system, and another will take the funds to the appropriate bank and deposit them. Then another will audit the bank accounts. None of these employees will have their signature on any of the documents or accounts, which keeps them from withdrawing or having any control over the funds. Having different duties for handling funds cuts down on scams.
Furthermore, most facilities have a policy in place that indicates if companies call or visit a resident trying to sell them something, the administrator will get the police involved.
Since I do not have any authority over facilities, I am not able to say which facilities have or do not have a system of checks and balances in place.
Q: We all want to protect our elderly loved ones from scams. What are the warning signs that you should watch for?
Susan Hodges: Regular routine meetings are set up between residents and management. During these meetings, scams are discussed not only with the residents but with their power of attorneys. If a resident(s) seems uneasy or distressed over a situation involving a scam, administrators will get involved. The warning signs are easy to see since most residents show outward emotions.
Q: No one wants to feel vulnerable, but elderly often are vulnerable. How can we encourage them to be alert to scams without scaring them or taking away their dignity?
Susan Hodges: Employees are encouraged to ask the residents to tell them if anyone has been bothering them over their finances or if someone is wanting them to buy, invest, or turn over any type of asset. Employees must report this to management. In addition, if an employee sees or hears that another employee is trying to scam a resident, action is immediately taken by management.
Checking with the groups where he/she visits such as churches, clubs, classes, etc. will help verify if he/she has started any type of suspicious occurrence.
Talking and being involved with a loved one maintains a check and balance system. Let them know it is ok to hang up on someone (it's not rude) and then block the number. If necessary, report the report the number.
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Q: When you believe that a loved one has been scammed, what steps should you take?
Susan Hodges: On a regular basis during activity sessions, the elderly are encouraged not to give out any personal information without a trusted person with them. They are also encouraged to have a trusted person with them before ordering, buying, or selling anything. The elderly will have certain trusted numbers placed in their rooms that are readily available to them to call and report any one trying to solicit.
Trusted persons of the resident can also call these numbers on behalf of the resident. Then it's known the resident has someone looking out for them. Also, check on resident's cell phones, computer sites, etc. to see if anyone has been sending scams. The facility can use as much block protection available, so she/he is not hacked. Use of child protection software programs can also help protect the elderly.
Make sure all personal papers are secured and aren't easy to obtain. Have a shredder handy for the elderly to destroy anything with personal information on it.
Talk with the elderly about advertisements on TV or radio. Explain how these ads are not always what they seem to be, including ads about gold, silver, insurance, etc.
Q: Is there any hope of recovering property taken by scammers?
Susan Hodges: There is very little hope. If it is recovered, it seems to take a long time.
Q: Sometimes scam victims get put on an easy target list. Are there any special steps to take to prevent being scammed a second or third time?
Susan Hodges: A trusted person(s) being involved is the best way to help the elderly from being scammed again. Once it is known someone is looking after them, they will be taken off the list. An elder with a trusted person will be able to avoid a lot of pain down the road. By encouraging the elderly to have a trusted witness for any/every transaction, they will feel more secure.
Report the scam to the local police and block out any computer sites that relate to the scam. If a bank check is involved, put a stop payment on the check or any other future pay outs. If an ATM is involved, inform the bank and get another card. They may also provide a picture of the scammer. If the scammer is a company, report it to the Better Business Bureau.
Lastly, change telephone numbers, passwords, and other electronic devices. Encourage the elderly not to answer any unknown or unrecognizable numbers. Block the numbers if possible. Also send out emails or use any other social outlets and let them know what happened. Discuss the scam so it will be hard for the scammers to repeat it. Also, fill out post office forms to stop all third class mail from being delivered. This will stop a lot of scammers from getting to them.
Keeping the elderly in a routine helps them to avoid scams. It goes a long way in helping them not become a victim. After all, a scam is usually a "surprise" event, so a routine should help eliminate a surprise or at the very least be an "alert."
Susan Hodges, the author of A Breach of Trust, is an advocate for senior citizens navigating the world of geriatric care and assisted living. As a retired licensed nursing facility administrator (LNFA) and long term care administrator (LTC), Hodges previously maintained nursing homes in Stamford and Fort Worth, TX where she helped the facilities stay abreast of their daily challenges. Hodges currently serves as president of Hodges Consulting and resides in Fort Worth, TX where she works tirelessly to protect the rights of nursing home residents.
Gary Foreman is a former financial planner and purchasing manager who founded The Dollar Stretcher.com website and newsletters in 1996. He's been featured in MSN Money, Yahoo Finance, Fox Business, The Nightly Business Report, US News Money, Credit.com and CreditCards.com. Gary shares his philosophy of money here. You can follow Gary on Twitter. Gary is also available for audio, video or print interviews. For more info see his media page.
Take the Next Step:
- Many seniors become scam victims. Know how to protect a parent's finances who is in assisted living.
- Discover more ways you can protect your aging parents by visiting the Dollar Stretcher Library.
- Know how to avoid burnout when caring for elderly parents.
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