×

How to protect your parents from financial abuse

Use Elder Abuse Awareness Day to have the 'money talk'

Today, you may want to think a bit more about how you can help take care of your aging parents, especially when it comes to managing and protecting their finances.

June 15 is World Elder Abuse Awareness Day, started by the International Network for the Prevention of Elder Abuse and the World Health Organization at the United Nations.

Cases of elder abuse, particularly financial exploitation, are far too common, although they are vastly under reported.

Over five million older Americans are financially exploited each year by sophisticated scammers, caregivers or even members of their own family, at a cost of more than $36 billion annually.

Many victims suffer in silence. Experts say they are often too ashamed or may be unaware of the abuse due to cognitive impairment. Only one in 44 cases of elder financial abuse is ever reported.

But it could happen to you or your loved ones if you don't safeguard their finances. Here are five steps to take to protect yourself as well as your aging parents:

1. Have the money talk.

It's often not an easy conversation to have, but it needs to happen as soon as possible.

Ask your parents where they keep their money. Discuss when they would want you to step in and manage their day-to-day finances. To prepare, find out where they keep important paperwork, including wills and deeds, and who their financial, legal and tax professionals are. If they do not have a financial advisor, lawyer or accountant, talk to them about finding professionals who can work with all of you.

2. Watch for signs of trouble.

There may be signs that they are losing track of their finances. Keep an eye out for piled-up bills and notices from creditors. Check their bank account for suspicious activity, including significant withdrawals or unusual purchases. Also look for suspicious changes in their wills or powers of attorney.

3. Be on the lookout for scams.

Predators love to target the elderly, and they do it mostly over the phone. Educate your parents about potential scam tactics. Tell them to never give out money or information over the telephone.

Many scams begin with someone calling to inform you that you won something, like a lottery or sweepstakes. Another popular scam is someone posing from the IRS threatening to initiate legal proceedings for past-due balances. To avoid unsolicited calls, encourage your parents to sign up for the Do Not Call Registry and the Direct Marketing Association's service to reduce junk mail. Remind them to never share their Social Security or Medicare numbers, and explain that the IRS only contacts individuals via regular mail for tax matters.

4. Make sure they know what they're signing.

Tell them never to sign a document that they don't understand. Have a trusted and unbiased professional assist your parents when they are entering contracts, signing legal papers, as well as making investment decisions.

5. Stay informed about potential frauds.

The National Center on Elder Abuse suggests signing up for AARP's Fraud Watch, checking out AARP's interactive national fraud map and looking into resources offered by the Financial Fraud Enforcement Task Force.

Updated: ThIs story, originally published April 19, has been updated with new data on elder abuse cases.