We have heard many sad stories of people, especially seniors, being defrauded or scammed out of large sums of money, and I bet you have too. Every one of us would like to find a way to ensure that we will never be “taken.” However, because there are so many types of scams, there are no sure-fire preventive measures that will protect you. Nonetheless, understanding why seniors are often targeted and how to best protect against such scams and other types of fraud, will go a long way toward keeping what you have safe.
Why are seniors so frequently targeted with scams?
Seniors are targeted for financial fraud because they are more likely to be vulnerable. Vulnerability often results from isolation and diminished capacity. Criminals understand this and search especially for people who(1) are lonely, (2) have memory issues, and (3) have full control over their assets.
- You can and should take action to relieve chronic loneliness by connecting with old friends and family and meeting new people in safe environments. Be extremely cautious about meeting people through the internet. Romance scammers are crafty and extremely common.
- Memory issues are more difficult to resolve because there is little you can do about it. Do what you can to enhance your short-term memory and consult with professionals involved in your mental and physical health care, but remember that, generally, memory and other cognitive abilities will decline with age.
- Control of assets or, more specifically, immediate control of assets, however, is something you can easily change to reduce your risk of losing a large sum to a scam. Below are some good steps to take which will make it more difficult for a criminal to access your assets, even if they are able to pull the wool over your eyes. The more difficult it is to access your money, the less likely it is that criminals will make off with it.
Steps you can take that decrease the accessibility of your money:
- Appoint a “trusted contact” whenever possible. Institutions under the supervision of the Financial Industry Regulatory Authority (FINRA) are to ask every customer if they want to name a trusted contact in case of possible financial exploitation. Naming a trusted contact will enable the institution to communicate with that person if the institution’s employees suspect financial abuse. Your trusted contact can also confirm specifics about anyone who attempts to directly access your accounts claiming they are your trustee, legal guardian, or agent under a power of attorney.
- Appoint a younger person whom you trust and have known for a long time as your agent in a general power of attorney for financial matters. This could be a child or, perhaps, a grandchild or niece or nephew. If you give your agent certain powers, they can help you manage your finances now and also later in the event you lose capacity.
- Put a large portion of your assets in a trust with yourself as beneficiary. Name a younger person whom you trust and have known for a long time as the trustee. That way, a criminal will need to go through them as well as you to get to the assets your trust owns.
- Create a “buffer” account. Let your younger, trusted agent or trustee manage and control your major financial accounts and assets on your behalf, but have them transfer a predetermined monthly amount to a checking account that you control. If a criminal empties your checking account, all they can get is the smaller amount on deposit, protecting the bulk of your assets contained in the other accounts.
- Get rid of your credit cards. Use either a prepaid debit card overseen by your trusted agent or a debit card associated with your “buffer” account described above.
A few final tips:
- Don’t be overly proud. Telephone credit card scammers, for example, are counting on you to be too proud to admit that you do not remember ordering the product they claim you ordered. Feeling embarrassed and uncertain in that moment, you might cooperate and provide payment information, especially if the scammer fakes being empathetic and helpful. Be humble enough to admit memory issues and trust the people you know love you to help you deal with anyone who says you owe them money.
- Be willing to give up some control in exchange for additional layers of protection. If that is difficult for you, ask yourself, “Would I rather have total control but possibly have nothing left, or would I rather share some control to preserve most or all of what I have?”
In summary, outsmart scammers by preparing to protect yourself ahead of time. Involve people who love you by giving them some role in your financial affairs as a trusted contact, agent, or trustee; decrease the accessibility of your money, and ask for help right away when something feels “off” or you are confused.
Rhodes Law Firm, PLLC, can help you take certain steps to proactively protect your property from potential scammers. If you would like to discuss that, Attorney Annette Rhodes would be glad to meet with you. Contact us through our website or at 919-435-3646 to set up an appointment today.
The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. We invite you to contact us and welcome your calls, letters and electronic mail. Contacting us does not create an attorney-client relationship. Please do not send any confidential information to us until such time as an attorney-client relationship has been established.