Keeping Senior Family Members Safe from Fraud

Elder fraud has long been a problem, and it's getting worse. In 2023, the FBI received 14% more elder fraud complaints than the previous year, with financial losses from such schemes rising 11%. To protect your parents, grandparents and other older family members and friends from potentially catastrophic financial losses, learn how criminals commonly target seniors — and how you can intervene.

Why They're Vulnerable

Older individuals with retirement savings, accumulated home equity, and other significant assets make appealing targets for fraud-bent strangers and unscrupulous family members and caregivers. Isolation, cognitive decline, physical disability, health problems and the recent loss of a spouse can make individuals easy prey for fraudsters. People without adequate experience or understanding of technology are also more likely to fall victim to cybercriminals.

Unfortunately, accurate statistics on elder financial abuse are hard to come by, mainly because victims hesitate to report it for fear of embarrassment. They also might suffer from cognitive impairments that prevent them from even realizing they've been victimized. But various estimates say one in 10 elderly Americans are defrauded annually.

Signs of Elder Abuse

Concerned family members and friends should look carefully for elder fraud warning signs. Red flags can include:

• Frequent large withdrawals, including daily maximum ATM withdrawals,
• Unusual debit transactions,
• "Insufficient fund" notices from banks and credit card issuers,
• Nonpayment of bills, which could indicate a loss of funds or loss of access to funds,
• Uncharacteristic attempts to wire large sums of money,
• Closing CDs or accounts without regard to financial penalties,
• An unusual degree of fear or submissiveness toward a caregiver,
• Moving away from existing relationships and toward new "friends" you don't know,
• Financial management changes, such as assigning a new power or attorney or trustee or engaging new professional advisors and
• An uncharacteristic reluctance to discuss financial matters.

Watch caregivers or other individuals who act domineering and exhibit excessive interest in your loved one's finances or assets. Also be on guard if the elder talks about an online "romance." Fraud perpetrators increasingly pose as potential romantic partners who first gain the trust of their targets. Then, they convince vulnerable elders to wire money or transfer control of accounts to the criminal. Many romance scams originate overseas. Thus, it can be challenging for authorities to catch the fraudsters and restore funds to defrauded individuals.

What You Can Do

Red flags aren't necessarily proof of fraud — especially in isolation. But act immediately if you suspect someone is trying to take advantage of a senior or if you have evidence of criminal activity.

If at all possible, prevent the elder from making any further contact with the suspected fraud perpetrator. Your task will be easier if you have power of attorney or are working with someone who has power of attorney. You might also enlist the help of other family members and close friends.

Then, help the victim:

• File a police report.
• Call the National Elder Fraud Hotline at 833-372-8311.
• Report the scam to the Federal Trade Commission (ReportFraud.ftc.gov).
• If the fraud is email or web-based, report it to the FBI's Internet Crime Complaint Center (ic3.gov).
• Contact the victim's financial and legal advisors.
• Depending on the extent of the schemes, contact the victim's banks, brokerages, credit card companies and insurers.
• Change the passwords on all computer devices and for email and sensitive online accounts.
• Make sure the victim's devices have automatically updated security software.
• Notify one of the major credit bureaus — Equifax, Experian or TransUnion —
• and request that a fraud alert be attached to the victim's report. That agency is required to notify the other two agencies of possible fraud.

Be sure to follow up on suggestions from the authorities or experts. Victims usually must devote considerable time and effort to recover any financial losses.

Provide Support

Your immediate objectives may be to halt any fraud in progress and try to help the victim recover lost funds. In addition to notifying people who can help, you'll want to review your loved one's financial records to ensure you've caught everything. Also, the victim should be directed to articles about preventing elder fraud (try AARP.org) and look for community-based programs (such as those offered by a public library or senior center).

At the same time, don't neglect the emotional aftermath of fraud. Your loved one may feel embarrassed and even culpable. Reassure defrauded people that they aren't to blame and ensure they have the support they need to prevent it from happening again.