6 ways to prevent elder fraud
Even financially literate adults aren’t immune.
The Justice Department and law enforcement partners recently announced the largest coordinated sweep of elderf-raud cases in history. The cases involved more than 250 defendants from around the globe who victimized more than 1 million Americans, most of whom were elderly, according to a release.
According to the Justice Department, there were a variety of fraud schemes ranging from mass mailing, telemarketing and investment frauds to individual incidences of identity theft and theft by guardians. Many cases also involved transnational criminal organizations that defrauded hundreds of thousands of elderly victims, while others involved a single relative or fiduciary who took advantage of an older person, the Justice Department noted.
So how might you protect yourself and your loved ones from falling victim to elder fraud?
You too could become a victim. According to recent research, there is no single reliable predictor of fraud victimization. “More financially literate and educated adults are not necessarily immune to financial fraud,” wrote the authors of “Exploring the Risks and Consequences of Elder Fraud Victimization: Evidence from the Health and Retirement Study.”
Talk with family members
Adults should engage family members in a conversation about financial goals and retirement objectives early in the life course — while they are their late 60s and early 70s — before there are changes in processing and decisionmaking, says Marti DeLiema, a post doctoral scholar at the Stanford Center on Longevity in the Financial Security Division and co-author of the research paper.
“Adult children should be familiar and comfortable with their parents’ financial goals so that they are prepared to take over if the older people cannot make financial decisions independently,” she says.
Name joint agents
Instead of giving one person power of attorney, DeLiema says, older adults should consider naming joint agents. “Both agents must agree on financial actions which makes exploitation more difficult,” she says.
Leave your money in your 401(k)
Even after retiring, DeLiema says older adults should keep their money invested in their former employer’s 401(k) or 403(b) plan. For one, it reduces liquidity; there’s less money for scammers to get their hands on. Plus, she says, “it is a great option because large employers generally operate these funds on a cost basis rather than a for-profit basis which keeps fees low.”
Opt out of credit card solicitations
DeLiema also recommends opting out of credit card solicitation marketing lists run by the major credit reporting bureaus. You can do that by calling 1-888-567-8688 or by visiting optout prescreen.com. You can also remove names and addresses from mailing lists at dmachoice.org.
Check the security features on your financial accounts
Always activate security features on your financial accounts. That means, DeLiema says, selecting to receive fraud alerts and using two-step authentication to access the accounts online. Elder-fraud complaints may be filed with the Federal Trade Commission at ftccomplaintassistant.gov or at 1-877382-4357.
General fraud-safety tips
❚ Never send money in advance to claim a sweepstakes, prize or lottery winnings.
❚ Hang up if you don’t recognize the caller.
❚ Keep track of when you last paid to renew a membership or made a donation. Don’t be fooled into thinking it’s time to donate or renew again.
❚ Learn to spot a counterfeit check.
❚ Throw away promotional mail.
❚ Don’t “confirm” or “verify” personal information with callers.
❚ Don’t send or wire money to people you have never met in person.
Robert Powell contributes regularly to USA TODAY, TheStreet and The Wall Street Journal. Have questions about money? Email Bob at rpowell@ allthingsretirement.com.