There is a growing percentage of older individuals living in the United States. More people are suffering from Alzheimer's and other forms of dementia. But even otherwise healthy seniors can experience subtle declines in judgment. They may no longer be able to tell whether someone is trustworthy or not. Others may have lost the ability to be skeptical of ʺtoo good to be trueʺ offers. That′s why warnings about scams aren′t always effective for older adults. Often, seniors who have problems making decisions don't think they need the warnings.
Age-related impairments can also lead to poor decision-making, especially in money matters. These impairments can put older adults at risk for fraud and other financial losses. Social isolation and medical illness may also contribute to their loneliness and desperation. As a result, older adults may become more susceptible to financial exploitation. Two medical researchers coined the term ʺage-associated financial vulnerabilityʺ to describe the difference. Here, older adults make more risky decisions than may have been the case when they were younger. Marketing schemes, financial products, and services aimed at older adults have grown. This explosion has caused a "public health crisis for patients and families."
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Scammers are clever. They prey on anyone who will listen regardless of income, education, social status, race, age or gender... given the right circumstances, anyone can be scammed. But, everyone can and should protect themselves and loved ones from scammers.
The U.S. Postal Inspection Service makes consumer education a main part of its work to stop fraud. Postal Inspectors raise awareness about the growing prevalence of these crimes. We especially want seniors and their families to know how to avoid becoming victims of fraud.
The most important action to take is to turn away from marketing offers. Pay particular attention to stopping telemarketers, robocalls and offers sent via the internet. Some of these could be legitimate, but many are not. People who allow themselves to listen to these pitches-even legitimate ones-are most vulnerable.
Source: Doug Shadel, Outsmarting the Scam Artists, (2013)
These simple steps, many of them free, can prevent a wide array of scams by reducing the number of solicited marketing offers directed at consumers: The most important action to take is to turn away from marketing offers. Pay particular attention to stopping telemarketers, robocalls and offers sent via the internet. Some of these could be legitimate, but many are not. People who allow themselves to listen to these pitches-even legitimate ones-are most vulnerable.
Don't enter free prize sweepstakes drawings.
Don't attend free lunch seminars.
Be cautious of any solicitation you receive over the internet.
Screen all incoming calls.
Get a non-published number.
Install an answering machine with a large caller ID display.
Answer the phone only if you know the caller. Otherwise, let the call roll to the answering machine. Teach everyone in your household to do the same.
Block unwanted telemarketing calls. Consumer Reports Magazine has listed products and free services that block telemarketers. The items on their list also block automated robocalls. Click here for a list of these reviews.
NoMoRobo is a free interception service that blocks "robocalls" or computer-generated calls. This service is available with VoIP systems. Comcast and Verizon phone subscribers can also use this service. Go to www.nomorobo.com to see whether your service provider supports it.
Opt-out of pre-approved credit offers. Enroll in the national credit bureau's OptOut program. Call 888-567-8688 or go online to www.optoutprescreen.com. Reduce other unsolicited marketing offers. The Federal Trade Commission's website has additional tips to reduce unwanted marketing offers.
Once you've stopped scammers in your household, consider helping your other loved ones. Pay particular attention to your older relatives and friends. Start a dialogue with them. They might be concerned at first by your interest in their personal affairs. Take the time to explain to them why you are concerned. Share what steps you would like to take, with their permission, to protect their finances. With your loved one's consent, you may be able to identify signs they've responded to a phony offer.
Visit older family members frequently and, if possible, unannounced. Does the phone ring off the hook? Are there lots of inexpensive "gifts" around the home? Do you observe secretive behavior or dramatic mood swings? Is there evidence of financial trouble such as no food in the house, or a sudden inability to pay bills? Is your loved one making payments to unfamiliar persons or companies? Are there pre-paid debit cards, or sweepstakes entry forms littered throughout the house? How about evidence of frequent withdrawals for cash? Are there receipts for overnight package delivery or wire transfer services? If you spot any of these signs, don't jump to conclusions—investigate further. But if you sense trouble, start by building trust. Make it clear you are offering help, not a judgment.
Next, sort the situation out. Share with your loved one a copy of the FDIC's guide on preventing financial exploitation. "Money Smart for Older Adults" can help seniors guard against fraud and identity theft. Click here for a free downloadable copy. "Money Smart" is a good tool for initiating discussions with family and friends. It is comprehensive, nonjudgmental, and branded with official logos. "Money Smart" explains the experiences others have had with scams and frauds. Hearing that message might remove defensiveness or embarrassment your loved one may feel. The guide describes scam techniques they may recognize from their own experience. Your loved one may also want to share their story after reading the guide. Professionally trained counselors with experience in helping fraud victims can provide that help.
Watch Glenn's story, as he discusses his aunt and uncle's victimization and the need for earlier intervention.
Here are some other suggestions for protecting your loved one from financial exploitation:
Be patient. Helping an older loved one, especially one that has been victimized, will take a long time, and won't be easy. The scammers won't let go of a victim without a fight. You might need to ask other loved ones to help as well.
Dementia and other age-related brain impairments play a significant role in financial exploitation. Helping a loved one recover from a scam may require the help of other professionals. These could include doctors, financial advisors, law enforcement and even the courts.
Elder advocates urge family members to enlist the help of an attorney who specializes in elder law, preferably before the onset of physical or cognitive decline. These professionals may be able to advise what options are available in your loved one's state. For example, most university law schools have an elder law unit that provides free legal advice to seniors. The American Bar Association also offers pro bono work for seniors.
Seek help from your loved one's doctors. Ask about the warning signs of dementia and age-related financial vulnerability. Doctors may also know local social services agencies that can help caregivers. Look for an attorney who specializes in elder law. Discuss the best protection for your loved one while letting them maintain control. It's best to do this before your loved one's health declines. Elder law attorneys can tell you what options are available in your loved one's state. For example, most university law schools have elder law units. These units provide free legal advice to seniors. The American Bar Association also offers pro bono work for seniors. If an older adult still has the capacity to make decisions, create a Power of Attorney for finances. This document is inexpensive and private. A Power of Attorney can be applied if your loved one needs help with decision-making. It allows your loved one to designate someone to handle their finances if they no longer can. Visit the Consumer Financial Protection Bureau's website for suggestions. The Eldercare Locator, a service of the U.S. Administration on Aging, can identify other resources throughout the United States. Visit www.eldercare.gov or call 800-677-1116. The Department of Justice's "Locator" tool on its Elder Justice website also has legal and other resources.
As we age, there might come a time when we need help managing our money. By the time we're in our 80s, one in three of us will have Alzheimer's, or other form of dementia. Dementia is a disease and not everyone will experience it. But research on the aging brain indicates most older adults will lose decision-making. This may be seen more in some people than others. This decline will affect the ability to make sound decisions about their money. It may also hamper a loved one's ability to determine if a transaction or activity is safe-or risky. Declining decision-making abilities leave older adults especially susceptible to scammers and financial exploitation. Scams we could identify in our 50s are more difficult to detect in our 70s and 80s. No one knows exactly why this decline affects some adults sooner than others. What is known, however, is that the experience is real. In the words of one medical researcher, the effects can be 'profound.' Click here to learn more about the change in decision making that occurs in older adults.
Source: Michael S. Finke, et al., Texas Tech U. Old Age and the Decline in Financial Literacy. (2011). Ifat Levy et al, Yale University, Like cognitive function, decision making across the life span shows profound age-related changes. Proceedings for the National Academies of Science (2013)I
A trusted relative or friend can be named to manage your loved one's finances at a later time. The time to act is before your loved one's physical health or decision-making declines. If a Power of Attorney is not in place, a court may appoint a guardian for the estate. That process can be lengthy, expensive and very public. Family members should have these conversations with loved ones ahead of time. Limit the discussion to only two items at a time, and sustain the conversation over time. Avoid appearing critical. Read a personal finance expert's "5 Tips for Discussing Money Matters With Family" here.
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