How to Protect Aging Parents from Investment Fraud
If your aging parents haven’t been victims of investment fraud or financial elder abuse, the odds are good that it may just be a matter of time.
According to a 2010 Elder Investor Fraud Survey conducted by The Investor Protection Trust, one out of every five adults over the age of 65 have been victimized by financial scams. And one out of every three older adults are getting calls from telemarketers asking them to send money or hawking lotteries and similar scams.
The elderly are favorite targets for financial fraudsters for a few key reasons:
• First and foremost, “that’s where the money is.” Older Americans who have spent a lifetime working, saving, and investing tend to have more financial assets compared to the general population.
• Stealing from the elderly is relatively easy compared to other types of fraud — especially for predatory caregivers or family members. Many times all it takes is an account number, a password, or a legal document that can be used to commit financial elder abuse. The fact that so many cases of financial elder abuse go undetected and unreported for years has prompted some experts to dub financial elder abuse the “Crime of the 21st Century.”
• Many victims of financial elder abuse are isolated, trusting, and vulnerable — traits that are all too easy to exploit for fraudsters looking for easy marks. Older adults who suffer from dementia or even mild cognitive impairments that affect their memory or judgement are at even greater risk for financial exploitation.
Another reason your aging parents may be at financial risk…
A recent survey of 600 Baby Boomers conducted by a national in-home care company, shows that many are alarmingly unprepared to help their aging parents with their finances — even at the most basis level: 34 percent had no idea if their parents have a safe deposit box or where the key is; and 36 percent have no idea where to find their aging parents’ financial information to begin with.
Important: The number of elderly victims of investment fraud is rising and is expected to keep rising as the Baby Boomers themselves get older. And we’re not just talking about falling for emails pitching winning Nigerian lottery tickets and free cruise vacations.
Even sophisticated investors can get taken. Just ask Bernie Madoff’s victims how safe they felt with their “no brainer” investment right up until their security blanket was pulled out from under them.
Protect your aging parents from becoming a victims of investment fraud. Check out these free online resources to help you get started…
• Consumer Guide to Financial Self-Defense from the Certified Financial Planner Board of Standards. Red flags that your financial advisor may be committing fraud and what to do to protect yourself.
• Fighting Fraud 101: Smart Tips for Older Investors from the Financial Industry Regulatory Authority. Worth the quick read just for the “Psychology of a Scam” section, which identified common tactics used by fraudsters.
• North American Securities Administrators Association Senior Investor Resource Center. A superb resource. Topics include: A checklist of key questions to ask before investing; Ten tips to protect your nestegg; and Top Investor Traps.