Important Steps to Avoid Financial Elder Abuse [Guide Included]
Estimated reading time: 3.5 minutes
Everyone is vulnerable to financial scams, but the elderly can be a particularly vulnerable population. As the baby boomer generation enters their retirement years, the senior population in America is growing. With so much of their savings invested in retirement accounts, this group is often a specific target for scammers and fraudsters.
What is Financial Elder Abuse?
Financial abuse can take many forms. Stealing financial information and identity can happen when people ask for your information over the phone or email, breaking into online accounts, or even stealing paper financial documents.
Financial neglect and exploitation, while not expressly stealing, are also financial abuse. When an elderly person’s bills and expenses are mismanaged, the elderly person is financially exposed. This situation may open them up to manipulation and being taken advantage of.
Elderly persons dealing with cognitive issues are obviously at an even greater risk of financial abuse due to the likelihood that they may sign a document or engage in a financial transaction without their full consent or under duress.
Who Commits Financial Elder Abuse?
Perpetrators of financial abuse are often people in a close relationship with an elderly person. The relational situation is part of what makes elder financial abuse particularly difficult to identify and address. While some family members may feel entitled to a senior’s resources when they are providing care, some seniors may also want to compensate their family members for the care.
Advisors are also in a unique position to exploit the elderly. As people enter retirement, they are often active investors. Because many seniors are seeking new opportunities beyond investing in securities, they risk being exposed to advisors who offer bad advice or engage in unscrupulous investment schemes. It’s also important to be aware of medical staff that might engage in medical fraud by overcharging for procedures or falsifying claims.
How Can I Protect Myself from Financial Abuse?
Knowing that financial elder abuse is real and you need to take steps to protect yourself is the first step. Staying vigilant about things like unusual changes in an account or unexplained transfers can help you find a potential issue quickly.
Do Your Due Diligence
Choose your advisors carefully. Because they are in a unique position to offer you advice and see your financial information, you want to be sure that they have your best interest in mind. You can always ask people you trust for their recommendations, but most importantly, make sure that you feel comfortable with the advisors you choose.
When investing, it’s also important to do your due diligence carefully. Watch out for unsolicited investment opportunities or things that seem too good to be true. If you ever feel pressured, feel free to take a pause and seek advice from a trusted source before you proceed with any investment you are not sure about.
Watch Out for Common Scam Tactics
Being aware of information about potential scams is an important part of keeping your retirement savings and investments safe. Many scams are created to exploit people’s vulnerability.
Sometimes a scammer impersonates a trusted family member or a person in authority in order to gain your trust. Other times a scammer may let you know you’ve won a prize and you simply need to provide personal information or a small fee to claim the prize.
Watch out for scammers that may contact you through email, phone, or mail. And make sure you verify the identity of anyone who requests money or personal information.
Keep Your Financial Information Safe
It’s also important to safeguard your physical and digital financial information. Remember to lock up your financial records and shred documents before throwing them away. Also create secure passwords and update them regularly for any online financial accounts.
How Can I Learn More?
Entrust has curated detailed information and resources on eldercare financial abuse and created the Protecting Elders from Financial Abuse Guide. The guide covers everything you need to know about the types of scams fraudsters use, potential perpetrators, tips for staying on top of financial matters, and resources to help protect you and your family.
Feel free to share this guide with others you think might benefit from learning more about financial elder abuse. Our goal at Entrust is that investors are able to make their own investment choices. To that end, we believe that knowing how to take steps to stay financially safe is a big part of being an empowered investor.