Every year seniors lose up to $36.5 billion from various types of financial abuse and exploitation. This is a serious matter and one that deserves attention, particularly for those diagnosed with Alzheimer’s and/or Dementia. These cognitive conditions make older adults even more susceptible to scammers and criminals. In a recent post, we described how to identify and prevent elderly abuse by acknowledging that anyone can perpetrate this type of abuse (including strangers, telemarketers, and even family and friends). There is no fail-proof way to stop elder financial abuse, but there are a few things you can do right now to protect your aging parent with dementia or Alzheimer’s. We’ve outlined seven of these steps below.
7 Steps to Prevent Financial Abuse
- Put in place a financial power of attorney immediately. By making yourself your aging parent’s power of attorney you ensure that a legal document is in place based on state law that empowers a succession of individuals (you) to make financial decisions and handle administrative affairs on behalf of your parent. Find out more information about this topic in our blog post What is a Financial Power of Attorney and Who Needs One?.
- Create a profile of all names, contact information, and other important data points of the banking, financial, and other legal institutions/professionals your parent is engaged with.
- Add your name to all of your parents’ bank and financial accounts. Request that a duplicate copy of each monthly statement also be delivered to you. This will enable a second pair of eyes to review each statement and monitor for any irregular activity.
- Hire a licensed professional fiduciary agent who can take over the responsibility of paying bills and managing assets. Make a provision in the Power of Attorney to have a third party review the appointed person’s actions.
- Set up automatic bill pay and direct deposits. This doesn’t just save time it keeps your loved one away from bill paying, which can prevent mistakes and won’t create easy opportunities for scammers.
- Do your research on those providing care for your aging parent. Conduct background checks on caregivers or require a background investigation report of any hired from in-home care providers.
- Keep a watchful eye out for any warning signs such as payments to individuals you are unfamiliar with; unpaid bills, irregular spending activity, transfer of funds, purchases of gift cards or other behavior you feel stands out. Immediately report anything that seems strange.
These are just a few ways to prevent abuse. If abuse does occur you should report it to the bank and the authorities immediately. According to the American Bankers Association (ABA), “Financial institutions can play a key role in addressing elder financial exploitation due to the nature of the client relationship. Often, financial institutions are quick to suspect elder financial exploitation based on bank personnel's familiarity with their elderly customers. The valuable role financial institutions can play in alerting appropriate authorities to suspected elder financial exploitation has received increased attention at the state level; this focus is consistent with an upward trend at the federal level in Suspicious Activity Reports (SARs) describing instances of suspected elder financial exploitation.”
Although the banks may be able to identify irregular activity – financial exploitation may occur in other ways as well. Having your name on your parents’ bank accounts, ensuring you have installed the power of attorney, and being included on financial statements will get you ahead of what many unfortunately experience.
