Your older friends and family members could be the targets of swindlers. Elder financial abuse and fraud affects about one in 10 Americans aged 60 and older, and costs them as much as $36.5 billion every year, according to the National Council on Aging.
In some cases, an outsider secures the victim's trust and steals their money. In others, an older adult asks someone they trust for help managing their finances, only to have that person use the situation for personal gain. "Most of the time, the abuse comes from a loved one — a neighbor, or a family member," says Amin Dabit, vice president of advisor service with financial management company Personal Capital.
A relationship becomes abusive when someone starts using funds for their own benefit rather than the account holder's. "The lines become blurred," says Dabit. "That's where people can become more susceptible."
Here are some other actions to take to help keep your loved ones safe:
Some frauds, like the infamous "Nigerian prince" email scam, generally start when someone on the internet reaches out to a potential target to try and strike up a conversation, or to ask for help. In romance or sweetheart scams, the scammer will often do research on a target before reaching out and use what they've learned to build trust, begin what appears to be an intimate relationship, and eventually start asking for money.
In 2018, victims lost $143 million to sweetheart scams, which can often target senior citizens who appear vulnerable and in need of companionship.
If you notice that a family member has been behaving differently — spending significantly more time on the internet, for example — it may be worth it to check in with them. If necessary, help educate them about some of the more popular online scams so that they can be on guard.
To help keep a loved one safe, you may want to encourage them to freeze their credit or have someone do it for them.
Lay out some financial protocols for and with a loved one so that everyone knows what to do long before they need help. If a family member or a financial professional is helping with your parents' finances, for example, make sure there's regular communication between your parents and the person managing the money.
"If the person that's supposed to be taking care of the finances isn't sharing what bills they're paying," says Dabit, "or leaving you blind to it...that's a red flag." Transparency is key, so the withholding of information could be a sign of mismanagement or an indication that the person handling finances may not be entirely trustworthy. In that event, you'll want to have a plan in place so you know what to do and know who can take over.
You can get some legal backing to help manage your loved one's money if they're no longer able to look out for their own interests.
In that case, it's wise to consult a lawyer about drafting a document that, once signed, grants you, or another trusted person, power of attorney. That allows someone to act on your loved one's behalf and handle important financial and medical decisions. Once it's approved and ready, you can share it with financial institutions who need to recognize it, such as your loved one's bank.
It's easy for family members to miss financial abuse, especially if it involves a victim who can't, or doesn't know that they should, raise the alarm when something strange happens. But with billions of dollars lost every year, it helps to be aware of the dangers, and how to help stay safe.
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