Elder fraud: How to protect yourself and loved ones
One was a retired hedge fund manager; another had had a long career in sales; a third was formerly a successful lawyer—all were in their late 70s/early 80s, still on the ball and very much in control of their finances. Yet criminals defrauded all three.
Embarrassed about having been duped by email and phone scams that in retrospect seemed so obvious, each avoided admitting the incident and loss to their family, friends and financial advisors. That meant they never took important steps to protect themselves from being victimized again.
Elder financial exploitation—sometimes called “the Crime of the 21st Century,”1 is on the rise around the globe. In 2019 and in the United States alone, the Federal Trade Commission reported almost 150,000 complaints2 (+18% year-over-year) of reported fraud within the 70+ age group. And despite that double-digit growth, it is believed that the number of cases should actually be higher, as elder financial abuse often goes unreported.
On the rise: Reported financial exploitation of seniors 70+ years old
Source: Consumer Sentinel Network Data Book, 2010–2019, Federal Trade Commission.
The nature of fraud against seniors is evolving. Criminals continually invent new ways to steal via phone, email and computer. What can you do to help the older and vulnerable people in your life from becoming victims of fraud? Are you unsure about what next steps and support to put in place for yourself as an older person?
Here is a quick guide that shares what can be done before—and after—you or an older person you love is targeted.
Before fraud happens
To help prevent strangers from defrauding you or your loved ones:
1. Always verify callers
Do not assume a phone call is genuine just because a caller has your information.
- Call the individual or organization back on a known phone number, or one found on the organization’s website, before engaging in a discussion of any length.
- Share information only when necessary and only with verified individuals, even during the normal course of business.
- Consider screening your calls. Don’t answer a ring automatically. If you don’t recognize a caller’s telephone number, let the call go to voicemail. You will be able to hear the reason for the call and determine if a response is necessary.
2. Keep your computer safe
- Never grant anyone outside of your company or firm the ability to remotely access your computer or mobile device, even if they are calling from a recognizable technology or service provider. Fraudsters open pose as agents from a legitimate firm in an attempt to gain trust, or to create a sense of panic by fabricating an urgent situation.
3. Take steps to protect your identity
- To ensure that no one can apply for a new credit line in your name, consider freezing your credit with the major agencies. Such a freeze would not affect your credit card purchases. And you can always temporarily unfreeze when you want to apply for loans or a new credit card.
- For a full list of identity protection steps, click here.
4. Monitor your accounts—or have a helper do so
- Regularly review transactions in all your accounts.
- Ask your J.P. Morgan team to help you set up online alerts that will help notify you (and/or your trusted individual) of potential fraudulent transactions or account changes, such as changes to your contact information.
5. Secure your financial documents and records
- Sign up for paperless billing and statements—it’s a good way to help prevent the theft of your information through the mail.
- Keep important printed documents in a safe place.
- Shred any document you no longer need.
6. Stay aware of the latest social engineering scams
- For our guide on how to protect yourself from email fraud, click here.
People you know
Often, the elderly and vulnerable actually know the people who exploit them financially. This kind of theft is typically committed incrementally, over an extended period, by a family member, caregiver or familiar professional.
7. Empower helpers—but create a system of checks and balances to help them stay honest:
- Decide how much authority you want to give to each helper. There is a range. The least amount of authority you might give is when you simply make the person a “trusted contact” at your financial institution so they have the ability see but not act on your accounts. That is helpful because your trusted contact can watch for fraudulent activity on your accounts. Much more significant is when you grant someone “power of attorney,” giving that person the legal authority to act on your behalf. Still more control is delegated when you appoint someone as a trustee of a trust in which your assets are held.
- Create oversight. If you grant a power of attorney, consider granting it two individuals who do not share the same interests so they might oversee each other. Be sure to require that neither can act without the other.
- Consider professionals. If you create a trust, consider choosing a professional trustee so you can be sure the trustee is acting in your best interests.
Coping with threats as they happen
One of the greatest challenges is to deal with criminals in real time. Here’s what you can do if you have even the slightest suspicion that:
8. An unknown caller or emailer may be trying to take advantage of you—simply hang up the phone or delete the message. If you have deleted the message, be sure to empty the “trash” on your computer, phone and tablet.
9. Your computer may have been accessed—shut it down immediately and contact your financial institutions. After you have spoken with all of them, you’ll want to bring your computer to a reputable dealer to have it cleaned.
10. Your financial accounts or credit cards might have been compromised either by strangers or people you know—contact the relevant financial institution immediately.
Even if you are certain the elder financial exploitation has taken place and you believe the money is truly lost, it is imperative that you inform your trusted individuals and financial institutions that a crime has occurred. The sooner you act, the greater the likelihood that funds might be recovered.
Perhaps more importantly: If fraudsters have been successful with you once, they (or other criminals to whom they have sold your name) may try again.
So make sure your family has open, non-judgmental conversations to soften any potential embarrassment and shame your loved ones may feel about having been targeted.
Fraud can happen to anyone—even, and sometimes especially—to smart people.
We can help
Here we’ve provided some general guidelines to protecting the elderly from financial abuse. More are available on our fraud prevention website.
However, everyone’s situation is unique. So please feel free to ask your J.P. Morgan team to help you create a customized senior fraud prevention plan for you and the people you love. And be sure to ask about our “trusted contact” program.
This article is provided for educational and informational purposes only and is not intended, nor should it be relied upon, to address every aspect of the subject discussed herein. The information provided in this article is intended to help clients protect themselves from cyber fraud. It does not provide a comprehensive listing of all types of cyber fraud activities and it does not identify all types of cybersecurity best practices. You, your company or organization is responsible for determining how to best protect itself against cyber fraud activities and for selecting the cybersecurity best practices that are most appropriate to your needs. Any reproduction, retransmission, dissemination or other unauthorized use of this article or the information contained herein by any person or entity is strictly prohibited.