Why This Financial Expert’s Tip Can Help Protect Your Parents Against Financial Scams
Cameron Huddleston knew that she was going to have a lot to worry about when her mother was diagnosed with Alzheimer’s, though monitoring the phone wasn’t one of them. But it was a phone call that led Huddleston to head over to her mother’s home to deal with a crisis. Her mom had received a call telling her she had won a large cash prize. In order to claim it, she needed to wire a significant sum of cash and needed help in sending the funds.
It took Huddleston hours to convince her mother it wasn’t a real call but really a scam.
“But she didn’t believe me because her ability to reason was compromised,” Huddleston, a financial journalist, says. “Instead, she continued to believe that the person who was calling her had a prize waiting for her. So, I had to stay with her the rest of the day to intercept the calls.”
While Huddleston’s story is disturbing, it is actually quite common. In fact, the FBI has found that when it comes to scams, the largest susceptible group are women over age 60. Further, in its 2019 report, the Consumer Finance and Protection Bureau reported that in 2017, when a fraud occurred, older Americans lost on average $34,200.
Older Americans Are Easy Targets
It’s no surprise that older individuals are targeted. First, from a wealth standpoint, members of the Silent (1928-1945) and Boomer (1946-1964) Generations tend to hold more wealth than younger Americans. Approximately 22% of the US population are over age 60, thus leading to a select group of people with more access to funds.
Second, older Americans are often isolated. Pew Research studied data from The Department of Labor and determined that one in four adults over age 60 live alone and on average spend 7 hours of the functioning day alone. Older women spend even more time alone. Not surprisingly, as individuals age, their alone time increases.
Finally, with age, cognitive ability declines. With issues ranging from just memory decline to dementia to Alzheimer’s, older adults are easy targets.
Huddleston explains. “Scammers also know that older adults are less likely to report that they are victims because they don’t realize they’ve been scammed, are too embarrassed, or don’t know how to report the crime.”
Framing the Conversation
In Huddleston’s case, despite her knowledge as a financial journalist, the experience she had with her mother really shook her.
“It scared me how vulnerable she was,” she says.
That’s why in her recent book, “Mom and Dad, We Need to Talk: How to Have Essential Conversations with Your Parents About Their Finances”, Huddleston addresses the challenge many Gen Xers have in determining how best to bring up this discussion with their parent. It’s not an easy discussion to tell your 60, 70 or 80 something parent that they are a target for scam artists. Thus, the conversation needs to be handled delicately.
Huddleston advises being careful in framing the conversation. “You need to approach the conversation carefully so you can help your parents avoid becoming victims of scammers rather than make them feel like they’ve done something wrong.”
Proactive Approach
One way to have your parents be prepared for scammers is to work with them to be proactive. There are certain telltale signs of a scam. Typical ones include being informed you owe money to the IRS, that you’ve won a sweepstakes or are eligible for a once in a lifetime investment opportunity.
Huddleston advises that in broaching the conversation, make it inclusive. “There are plenty of reports in the news about the latest scams. And you might even have been a target of scammers. Share what you heard about a scam – or what you experienced – then ask your parents if anything like that happened to them,” she says.
But beyond talking about scams, Huddleston points out that you need to give them the tools to get away from scammers. Her advice: give them a script to use with scammers.
“Your parents likely think it’s rude to hang up on callers. You need to give them a line they can use to hang up without feeling bad,” she advises. “You could suggest that if they get a questionable call with any of the scam red flags, they could say that they’re busy and will call back.”
Helping your parents prevent scams also means working with them to take regular steps to prevent it.
“Encourage your parents to set up online access for all of their financial accounts, including Social Security, so they can monitor them regularly rather than wait to get paper statements once a month,” says Huddleston. “By creating online accounts, they also can set up alerts to be notified by text or email when transactions occur on those accounts. That will help them spot any fraudulent charges or transactions.”
Proactivity Is Key
The conversation with your parents isn’t an easy one. It’s a sign that the relationship is shifting to where the middle-age child needs to care for their parents. But in failing to have the conversation, the Gen X child is allowing their parent to be vulnerable to potential scammers. Unfortunately, scammers continue to be incredibly successful in taking advantage of older Americans.
In Huddleston’s case, she feels lucky to have been able to step in to protect her mother from scammers.
“I had to take steps to protect my mom from scammers after she was diagnosed with Alzheimer’s disease. It wasn’t easy, but it was absolutely necessary to prevent her from losing large amounts of money to people who were trying to take advantage of her,” she says.
And for those who feel their parents may have been exposed to scammers, there are a number of resources to help including the AARP Fraud Watch Network and the National Adult Protective Services Association. But the best advice is to be proactive and have the conversation with your parents before it’s too late.
