For seniors living on a fixed income, stretching their money is critical. This makes seniors particularly vulnerable to people who are intent on separating them from their hard-earned dollars. In fact, one in five Americans who are 65 or older has been the victim of financial fraud, for a total loss of $2.9 billion every year, according to the Securities Industry and Financial Markets Association. What can you do to protect yourself or your older loved ones from this kind of crime? The Pennsylvania Institute of Certified Public Accountants provides insights on how fraud can happen and steps you can take to avoid it.
A Tempting Target
The list of scams aimed at older people includes Medicare and health insurance fraud, funeral and cemetery scams, telemarketing and Internet scams, investment fraud, home improvement and reverse mortgage fraud, and even counterfeit prescriptions or anti-aging products. Seniors are tempting fraud targets for a variety of reasons. First, they’ve spent their lives setting aside retirement savings that is now available. They often own their own homes; the value of which can be tapped. Finally, the risk of engaging in these crimes may seem low since they often go unreported because the victims are ashamed or don’t immediately realize they’ve been conned, according to the National Council on Aging
Amazingly, the majority of those who exploit the elderly aren’t strangers, but rather family members, friends, or other associates. With that in mind, the Financial Industry Regulatory Authority has called for a 15-day safe-harbor period during which a financial adviser can put a hold on disbursements from a senior client’s account if the adviser believes the client is being financially exploited. The holding period provides time to alert a trusted contact (provided by the senior) who can step in and help prevent any fraud that might be taking place. You can always turn to your trusted CPA for help if you or a loved one are facing a suspicious financial offer or appeal, or if you believe you’ve been the target of fraud.
How Families Can Help
In addition to their CPA, seniors and their families can turn to online resources from the Federal Bureau of Investigation
and other government agencies for tips
on preventing fraud. Being informed goes a long way toward protecting against scams. With that in mind, take the time to educate yourself or to talk to senior loved ones about ways to identify fraud. Enlist neighbors and friends to speak up if they believe a senior is, or could be, the victim of financial fraud. And be sure to talk to your family’s CPA about ways to spot financial fraud in advance. Warning signs include a change in the senior’s spending habits and unpaid bills if he or she has lost a significant sum to a scammer, unexplained bank account withdrawals or transfers, and finding forged checks or financial documents.
Your CPA Can Help
No matter what kind of financial question or concern you or your loved ones are facing, your local CPA can provide valuable advice that can help you make the right decisions. Contact him or her for the insights you need to navigate financial challenges and to make the most of your financial opportunities. Don’t have a CPA? Visit www.picpa.org/moneyandlife
for valuable resources including the CPA Locator tool
Originally published Jan. 11, 2016