Don't let them become a financial victim
Protecting a Parent Who Is in Assisted Living from Financial Scams and Identity Theft
by Gary Foreman
Care Management for Your Elderly Parent
In Home Help for Elderly Mom
Boomers Helping Aging Parents Live Independently
According to the National Committee for the Prevention of Elder Abuse, there are a number of ways that the elderly can become financial victims. Experts put the total losses in excess of $3 billion annually. So how can you help protect your parent's finances if they're living in an assisted living apartment?
To help us understand what we can do to protect the assets of our elderly parents, we contacted Rod Griffin, Director of Public Education for Experian.
Q: How vulnerable are the elderly to financial scams and identity theft?
Mr. Griffin: The elderly are among the most vulnerable targets of identity theft and financial fraud. They often have substantial accumulated assets and strong credit histories, but little understanding of personal finance, digital banking, or direct involvement with their own finances, which makes them a prime target.
Q: Assuming that an adult child is getting duplicate copies of statements, what should they watch out for?
Mr. Griffin: If an adult child is assisting with or overseeing an elderly parent's finances, they should watch for the same things they would for themselves. Are there bills they don't recognize? Are there charges in billing statements that are unaccounted for, and are checking and other accounts reconciling correctly? Have collection accounts suddenly begun arriving from unknown lenders? They should also check any medical bills for inaccurate charges or treatment that was not provided. Are payments from pension funds, other retirement funds, and the Social Security Administration arriving in a timely manner or at all, and if so, are the payments in the correct amount?
Q: What are the most common identity fraud scams that seniors face?
Mr. Griffin: Unfortunately, the elderly are particularly susceptible to fraud by caregivers, friends, and family members. They also are more frequently victims of digital fraud, such as phishing, because they lack experience with online activity. Seniors may also be at greater risk of medical fraud, particularly insurance scams, because they often have greater and more frequent need for medical care.
Q: Some elderly have fairly complicated financial affairs. Should you encourage them to simplify as they get older?
Mr. Griffin: It's a good idea to review your financial resources at any age, but particularly so for the elderly. Reviewing their credit report might reveal open accounts that have been forgotten. It's easy to put a credit card in a drawer and forget all about it. Unused accounts can be a source of fraud, so closing them can help reduce that risk. Reducing the number of accounts you have can help make it easier to protect them.
Q: Many elderly people aren't that internet savvy. Does that make them more likely to be victims of identity theft and other financial scams?
Mr. Griffin: In today's world of digital banking, email and social media, seniors are particularly at risk. They don't always understand the risk associated with sharing sensitive information online, don't recognize spoofed websites, or realize emails may use social engineering to get account numbers or passwords.
Q: When a parent moves into an assisted living home, they're unlikely to be requesting credit. Is there any reason that they shouldn't "freeze" their credit?
Mr. Griffin: Freezing a credit file can make sense for seniors, particularly if they no longer need access to new credit or other services. Some state laws allow seniors to request that their credit file be frozen at no charge. Freezing a credit file does not prevent use of existing accounts. If they plan to apply for new credit, it may be best to delay freezing the file. The assisted living center may require a tenant screening, which could include reviewing a credit report. If so, waiting to freeze the file until after the process is approved might simplify the process.
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 or visit Gary Foreman on Google+. Gary is also available for audio, video or print interviews. For more info see his media page.
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