Defending Elders Against Financial Crimes

May 30, 2013

Financial crimes against older Americans are on the rise.

According to the 2010 Investor Protection Trust (IPT) Elder Fraud Survey, more than seven million older Americans one out of every five citizens over the age of 65 have already been victimized by a financial swindle.

What can you do to protect yourself or help someone in your life who may be vulnerable just because of age?

Proactive Protection

Taking a few precautions now can help defend against fraud in later life:

1. Organize your estate. No matter how old you are, its a good idea to update and organize all your financial documentation, including your will, financial powers of attorney, real estate deeds, insurance policies, pension and trust documents, birth and marriage certificates, and Social Security paper-work.

Maintaining an organized file, and helping others (such as a parent, uncle or close friend) do the same, can make it easier to spot the inconsistencies and red flags that could signal financial abuse.

2. Make a list of financial contacts. Bankers, insurance agents, attorneys, accountants, stockbrokers and other professionals should be on it. Share your list with your Financial Advisor and with family members you trust.

3. Keep a watchful eye. An older person could be at risk for fraud if he or she feels socially isolated, has suffered a recent loss, or has physical or mental disabilities.

Be especially vigilant if the individual is unfamiliar with his or her finances or has family members who are struggling financially or have substance abuse problems. Look out for financial mishandling, which can include anything from the use of property or belongings without permission to persuading someone to sign a deed, will, or power of attorney through deception or coercion.

If you notice any sudden changes in your family members health, social life or spending habits, ask about the reasons for the shift.

Sidestepping Fraud with Savvy

Perhaps the most important defense is simply making yourself and those around you aware of the possibility of fraud. It can be subtle and may rely on your urge to help or provide a quick answer; for example, someone who claims to be calling from your attorneys address to request your Social Security number may not be legitimate.

Fraud snags its victims by several means through the mail, through telemarketing, and even through social media. In particular, beware of:

Free gifts. Steer away from vacations or prizes that require payment, postage-and-handling fees, or personal information in order to be claimed.

Claims of health cures and diets. If it sounds too good to be true, it probably is. If you have any questions, ask your doctor.

Fake contests, prizes, lotteries, chain letters, insurance deals, and franchise and work-at-home schemes. These can be sent from email addresses that look familiar to you. If a message looks like a form letter, delete it.

Social networking friend requests from unfamiliar parties. Limit your online circle to close friends and family. When in doubt, steer clear.

For more information about types of fraud, or to report a suspicious offer, contact the National Fraud Information Center at 800-876-7060.

And, of course, talking to your Financial Advisor can help raise your awareness of how the elderly might be targeted by others. Get the information you need to help protect the assets you and your family members have worked a lifetime to earn.

This article was written by Wells Fargo Advisors and provided courtesy of Terry R. Campbell and Susan Paolo, Financial Advisors in Chardon at 440-286-2553.

Investments in securities and insurance products are: NOT FDIC-INSURED / NOT BANK-GUARANTEED / MAY LOSE VALUE

Wells Fargo Advisors, LLC, Member SIPC, is a registered broker-dealer and a separate non-bank affiliate of Wells Fargo & Company.