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Brains and Losses

Concerned about financial scams? Here’s your guide

Sasa Woodruff May 16, 2019
Rose Conlon/Marketplace

Billions of dollars are lost to financial scams every year, and seniors are particularly at risk. One widely cited study found that older Americans lose $36 billion a year to elder financial abuse  — this includes exploitation, fraud and trust abuse.

As part of “Brains and Losses”, Marketplace’s investigative series on age-associated financial vulnerability, we’ve created a tip sheet on how best to protect yourself and your loved ones from scammers.

The basics

  • Keep in close communication with older family members and loved ones, especially if they have recently lost a partner to death or divorce. Isolation and loneliness make seniors more vulnerable to scammers.
  • Scam victims often feel embarrassed about their actions. If someone admits they’ve been scammed, try to be nonjudgmental and empathetic.
  • If someone calls or emails with an urgent request — a grandchild is in trouble or a prize needs to be claimed immediately — pause and tell them you need time to consider it.
  • Don’t send or wire money to anyone you don’t know personally. Google Play, iTunes or Amazon gift cards are often used by scammers for fraudulent transactions.
  • Once one scammer has contact details for a potential victim, the information is shared and more fraudsters will try to make contact. If your loved one is constantly getting phone calls at all hours of the day, it may be a sign they are being targeted. If scammers have a phone number or email address, consider changing both. You can also sign up for the National Do Not Call Registry and block any unfamiliar numbers

Preventative measures

  • Start talking to people you trust about your financial goals and needs. Pick people you trust who could potentially take over your finances in the event you’re no longer able to do so. This is a good idea at any age.
  • Advance medical directives and medical power of attorney are often sketched out in advance. You can set up a similar system for finances. A power of attorney for your finances lets someone you trust make financial decisions — like paying bills, filing taxes or managing property — on your behalf.
  1. General: This type lets a designated person control certain parts of your finances. If you become incapacitated in any way, the power of attorney ends.
  2. Durable: This power of attorney remains in effect if you become incapacitated.
  3. Springing: This power of attorney is triggered when a life event, like the onset of dementia, an accident or disease, leaves you mentally diminished or incapacitated. Some states do not allow springing power of attorney.
  • Sometimes power of attorney agents abuse their powers, so experts recommend adding a monitoring system and a trusted third party to approve large transactions.
  • If a person doesn’t have a financial advance directive, you may need to ask a court for a conservatorship, sometimes called a guardianship, to manage the finances of a person who is incapacitated. This is done after a person is incapacitated and is only in serious cases.

Responding to a scam

  • Report the issue to the Federal Trade Commission, FBI or your state attorney general. Try to gather as much information as possible, including the victim’s contact information, dates, emails and details about the crime and the recipient of the money in the fraud.
  • If a victim is an older adult, you can also report the suspected crimes to Adult Protective Services. You can look up local contact information at the National Adult Protective Services Association website.
  • Victims of scams often don’t realize they’re being scammed. This is often true of “twisted heart” cases, where the scammer pretends to be a lover, companion or caretaker to bilk the victim out of money. If you’re trying to convince someone they are being scammed, consider creating a spreadsheet accounting all the money paid to the scammer. This takes the emotion out of the conversation and focuses on the facts of the situation.
  • Further information and context is available at ElderAbuse.org, an umbrella group dedicated to related education and advocacy.

For resources to help you deal with financial scams and to read more about the “Brains and Losses” series, continue here.

“Brains and Losses” was made possible by Marketplace’s generous supporters, including the Park Foundation.

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