Picture this scenario at the bank: A woman walks into her branch with her 25-year-old grandson and they’re ready to transfer $4,000 or so out of Grandma’s account into his.
Is the grandson running a scam? And, if so, can the bank do anything to stop it?
Maybe, yes, on both counts.
“People are literally being robbed every day through scams or financial exploitation from members of their own family,” said Debra Whitman, executive vice president and chief public policy officer at AARP.
The average victim can lose $120,000 to financial exploitation, according to AARP research. Repeated, out-of-the-ordinary cash withdrawals are a big clue to exploitation and scams. (source: Detroit Free Press)
In fact, every year it is estimated that 2.6 billion dollars are lost by elder financial abuse and the problem only seems to be getting worse and worse.
The initial threat for most of our elderly parents were the dreaded robocallers. The imposters that would pose as the Social Security department or the Internal Revenue Service and put our parents into a nightmarish situation where they though they either owed money or there was going to be a change to their Social Security check. We need to remind our parents that neither of these organizations will ever call our parents.
Of course, there is the ongoing saga of phishing scams and hackers who get into our parents e-mails and pose as if they were our parents or pose as their bank, credit card, or vendor asking for a change of user name or password with the only thought of trying to steal our parents credit card information. It’s important we remind our parents to NOT only read the body of the e-mail, but MORE IMPORTANTLY check the senders address origin which almost always gives away the scammer.
What’s a more frightening situation is the fact that our own family members are starting to scam our own parents. There is, however, a fine line between an elderly parent trying to help a child or relative and when they are coerced or blindfully led into a fraudulent situation where a child or relative is ripping them off. How many situations have you heard of or seen where one child gets money from a parent for a house, their kids’ education, or a trip where other family members are left out? Does this happen because those other children are the black sheep of the family or because the elderly parents are led to believe the money, they are doling out is going equally across the board?
Power of attorney or authorized signer relationships are the ones that are most dangerous. Typically, authorized signers can sign checks and withdraw or deposit funds without having to ask the owner for permission. However, any transactions made by the signer must be for you as the owner of the account. So, if your parents name one sibling or trusted contact as that authorized signer or power of attorney, money can leave those accounts quickly for purposes not intended by the elderly parents.
There have been many instances where this isn’t even family. It could be a general contractor working on doing renovations to your parents’ house or trusted person going into the bank with your parent(s) because they think they are withdrawing money for a good cause. It is super important to keep an eye on full time caregivers or when your parents are having diminished health, new best friends, or there is a rift amongst the family.
The number of cases in the United States has quadrupled from 2013 to 2017 for elderly exploitation up to 63,500 cases and the average victim is a female aged 70 to 79 with less than $20,000 in the bank.
There is no easy solution to answer this troubling and growing problem. You can contact the AARP Watchdog or NAPSA: National Adult Protective Services Agency as two organizations who are watching over this constantly. If you have financial or brokerage accounts, make sure you have a trusted contact form on file so your financial advisors can keep an eye out for you as well. Most importantly, as much as you love your siblings and relatives, if you have significant distance between you and your parents ensure you’ve kind some kind of check and balance system or you might find out your parents’ life savings exit through a black hole.