How to protect the finances of your elderly loved ones
Physical health is a major focus for seniors as they get older. What about their financial health?
The National Council on Aging said while likely under-reported, the cost estimates of elder financial abuse and fraud range from $2.9 billion to $36.5 billion annually. Some reports indicate as many as 5 million elders are abused each year.
From medical expenses to home repairs, Nancy Bistritz, vice president of communications and consumer education at Equifax, said elderly people are vulnerable because they are likely trying to manage a wide variety of expenses.
“You are talking about the demographic that has to budget and live on a fixed income,” she said. “They may not be out there working. The other thing you are looking at is a demographic that is dealing with more student loan debt than ever before.”
The FBI indicates older Americans are less likely to report a fraud because they do not know who to report it to, are too ashamed they fell for a scam or do not know they have been scammed.
Bistritz shared four tips for family and friends who are assisting elderly loved ones with their finances.
Add someone to accounts
Bistritz said listing someone else on an elderly person’s accounts is essential. That individual can ensure that all financial obligations are being met.
“If the elderly person is in a position where they are dealing with memory loss or they have a medical issue, you definitely want to make sure that even as they are getting up in years that they are still maintaining the right type of payment behaviors,” she said. “If they have credit cards, make sure they are paying the bills on time. If they have mortgages, make sure they are paying those bills as well.”
Power of attorney
Bistritz said a power of attorney might also be necessary.
“If there is a situation where a parent or loved one is in a position where they are unable to do things on their own, then definitely we recommend that people look at a power of attorney or appointing someone to act on the consumer’s behalf,” she said.
Keep track of credit
If your parent or loved one is not considering opening any new lines of credit, Bistritz recommends a security freeze.
“A security freeze is going to restrict certain access to a person’s credit report and it may prevent identity theft from taking place,” she said.
Bistritz also recommends regularly checking their credit report.
“You’re looking at the credit report to make sure no identity theft has taken place,” she said. “You are looking to make sure that no new accounts are being opened.”
Beware of scams
Bistritz suggests speaking to your elderly parent or loved one about the dangers of scams. It is also important to educate them about the types of scams.
“Email, phishing, investment schemes – these are some of the classic scams that are taking place and preying on the elderly population,” she said.
Bistritz said telephone scams are also extremely popular. Some fraudsters call and claim to speak on behalf of a relative or loved one who is in trouble.
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“Sometimes these calls can sound really legitimate and very, very scary,” she said. “Tell your elderly parents or loved ones that if a call comes up on their phone and if it’s a phone number they don’t recognize, let it go to voicemail. Tell them to ask you questions first before giving out personal information.”
If you need help, Bistritz recommended reaching out to the Consumer Financial Protection Bureau and the National Council on Aging.
Linda Bell joined FOX Business Network (FBN) in 2014 as an assignment editor. She is an award-winning writer of business and financial content. You can follow her on Twitter @lindanbell