- August 29, 2022
- Posted by General Electric Credit Union
- 4 read
Elder Financial Abuse Red Flags and How to Protect Loved Ones
It’s estimated that over 3.5 million seniors fall victim to financial scams every year, and bad actors are making off with more than $3 billion as a result.1 These criminals may go after the funds, real estate, investments, or personal property of seniors for their own financial gain. If you have an older loved one, you likely do everything you can to keep them happy, comfortable, and protected. Learning the red flags of elder financial abuse and familiarizing yourself with security measures are just another way to work toward this goal.
Detecting red flags
If your loved one has historically been open about their finances but is suddenly taking a closed-door approach to money management, this is something you should keep an eye on. While seniors deserve the ability to set boundaries and maintain independence like everyone else, this sudden change may be influenced by someone else behind the scenes. Criminals may illegally solicit money from your loved one and request for them not to tell you – likely because you’d quickly see through their sham.
Or, loved ones may shy away from talking to you because they’ve already fallen victim to a scam and feel embarrassed. It’s important to report fraud as soon as possible to minimize the fallout. Remind your loved one of this if you suspect it, as doing so may urge them to come clean.
Sketchy gift card purchases
Everyone has unique shopping habits. That’s why you should be immediately suspicious of new gift card purchases for a brand, service, or store that’s outside of the norm for your loved one. If they haven’t stepped foot in a Walmart for the better part of a decade and suddenly bought a $100 gift card to the retailer, sit down and have a conversation with them to get the bottom of why they made the purchase and for who. While the justification may be perfectly benign (e.g. a birthday present for a grandchild), it may also help you uncover a scam.
Out-of-character credit card transactions
If your loved one is typically very frugal but has recently racked up a lot of credit card debt, a bad actor may be pulling their strings behind the scenes. Review your loved one’s transaction history with them to pinpoint any that need to be reported to their financial institution.
Unusual withdrawals or transfers
Knowing how your loved one banks can help you notice an issue. For example, if they never adopted digital banking and still enjoy visiting their local branch for their banking needs, you shouldn’t be seeing transactions completed electronically. If you do, sound the alarm! A team member at their financial institution can direct you and your loved one on next steps.
Withdrawals from long-term investments, such as certificates of deposit, despite penalties are also a red flag and a good reason to make a phone call.
After all these years, you’re probably familiar with the circle of friends and romantic partners in your loved one’s life. While a new relationship isn’t always a sign of danger, it can be. Relationships that move too fast, are inconsistent, or based on money exchanges all point to the latter. Remind your loved one that relationships should be about mutual trust and benefit. If $5 is turning into $50 or $100, it’s a sign they should move on.
Sometimes, a fraudster may use an existing relationship to their advantage by posing as another person.
“Older people can get bored or lonely and a new relationship or a new project gives them new purpose in life,” says Bill Lantry, General Electric Credit Union’s (GECU) Vice President of Fraud Investigations. “Often, they get scammed because they are trying to do the right thing or help someone in need. That’s why care package scams and grandchild scams are so effective”
Stopping elder fraud in its tracks
To spot potential scams early and protect your older family members, Lantry recommends these steps:
- Discuss financial decisions openly with your older parent or loved one and make it clear that they can do the same with you.
- Have joint accounts so you can reconcile statements and verify unexpected transactions quickly.
- Keep separate accounts for everyday expenses and longer-term savings.
- Ask questions, specifically about your senior loved one’s daily activities and with whom they are in contact.
- Add their mobile and landline numbers to the national do-not-call list at: www.donotcall.gov.
Our goal is the improve the financial lives of you and your loved ones – and we accomplish this by educating our members about fraud and acting quickly when it’s reported. Together, we can minimize the impact of elder financial abuse and get your loved one back on track to a brighter financial future!