Protecting Against Elder Financial Abuse by Robert Mark Weiss, CFA

According to AARP’s latest report on elder financial exploitation, financial abuse of Americans aged 60 and older increased during the pandemic with an estimated $28.3 billion in losses. More startling is that in 72 percent of these crimes, the victim knew the perpetrator, who was either a caregiver, a fiduciary or a family member. Recognizing the risks and signs of financial abuse is the first step individuals must take to protect themselves and their elderly loved ones from these frauds.

Types of Financial Abuse

According to the Consumer Financial Protection Bureau (CFPB), the 10 most common financial crimes committed against older adults include the following schemes:

• Financial exploitation by a fiduciary or other individual who uses a power of attorney for illegal and unauthorized personal profit or gain or for depriving older persons of the benefits, resources and assets to which they are entitled
• Theft of money or property, often by a family member, caregiver or in-home helper
• Investment fraud and scams, including deceptive “free lunch seminars” selling unnecessary or fraudulent financial services or products
• Lottery and sweepstakes scams
• Imposter scams in which someone pretends to be a family member or a representative of a government agency or a company with which the victim does business, such as a bank or retailer
• Romance scams in which someone uses social media or dating websites to gain the victim’s trust
• Tax and debt collection scams
• Charity scams
• Scams by telemarketers, mail offers or door-to-door salespersons
• Computer and Internet scams, including identity theft
• Contractor fraud and home improvement scams

Understand the Definition and Role of a Fiduciary

The persons you name to manage your money or property are considered fiduciaries you entrust to act and make decisions in your best interest. They should be loyal, trustworthy and capable of carefully managing your affairs and maintaining meticulous records. To ensure fiduciaries carry out their obligations to you, it is a good idea to share their names and contact information with your trusted advisors, including lawyers, accountants, financial advisors and family members.

Be Cautious when Assigning Power of Attorney

When selecting a person to have legal authority over your financial and health decisions, it is important to name someone you trust who knows and respects your specific wishes and needs. Naming a hired or paid caregiver as your agent under a power of attorney should be avoided at all costs. Regardless of whom you select, be sure to share their name and contact information with your trusted circle of friends, family members and advisors. When you draw up a power of attorney in advance of a specific need, you can implement specific controls to protect your interests further, such as requiring a lawyer or financial advisor to authorize checks or withdrawals over a certain amount.

Minimize Risk through Education

Anyone can fall prey to financial crime, but seniors are often more at risk, especially when they are unfamiliar with managing finances, not technologically proficient, or they are physically or cognitively impaired and dependent on others. The best form of protection against these crimes is education.

• Do not respond to unsolicited phone calls, emails or texts asking for your private information.
• Shred documents containing your personal information, including your Social Security number, and consider locking up your checkbook and financial statements when someone you do not know is in your home for an extended period.
• Learn how to safely use the internet and email, including using virus protection software and recognizing the telltale signs of a scam.
• Never click on links or attachments contained in emails unless you are sure of the message sender.
• Check references when hiring advisors and caregivers.
• Never rush to make financial decisions.
• Don’t fall for high-pressure sales tactics.
• Always request a written explanation of any investment opportunities.
• Document conversations and communications.
• Never give personal information, including your Social Security number, account number or other financial information, to anyone over the phone unless you initiated the call and the other party is trusted.
• Make payments with checks or credit cards, rather than cash, to create a money trail.
• Make checks payable to financial institutions or companies and never to individuals.
• Annually review your credit report to check for accuracy.
• Act quickly if you sense an issue or if a problem occurs. The sooner you get help, the more likely you will resolve the issue with minimal impact.

About the Author: Robert Mark Weiss, CFA, is a regional director and financial planner with Provenance Wealth Advisors (PWA), an Independent Registered Investment Advisor affiliated with Berkowitz Pollack Brant Advisors + CPAs, and a registered representative with PWA Securities, LLC (PWAS).  For more information, call (941) 308-1126 or email info@provweath.com.

Provenance Wealth Advisors (PWA), 200 E. Las Olas Blvd., Nineteenth Floor, Ft. Lauderdale, FL 33301 (954) 712-8888.

Robert Mark Weiss is a registered representative of and offers securities through PWA Securities, LLC, Member FINRA/SIPC.

This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct.

Any opinions are those of the advisors of PWA and not necessarily those of PWA Securities, LLC. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of PWAS, we are not qualified to render advice on tax or legal matters. You should discuss any tax or legal matters with the appropriate professional. Prior to making any investment decision, please consult with your financial advisor about your individual situation

You should discuss any tax or legal matters with the appropriate professional. Prior to making an investment decision, please consult with your financial advisor about your individual situation.

To learn more about Provenance Wealth Advisors financial planning services click here or contact us at info@provwealth.com

Posted on September 21, 2023