Is your elderly parent giving money away? Whether Facebook fraud, a scam, identity theft, gaslighting, or hacking into accounts, 9 out of 10 Americans have been victims in one way or another according to a survey conducted in 2019 by OnePoll.
Your elderly parents and grandparents may not be able to recognize a scam. “Someone called my grandmother pretending to be me.” It happens, and it happens often. According to investigators at the National Institutes of Health, 1 in 18 senior citizens fall prey to fraudulent scams and gaslighting even when they are considered to be cognitively intact.
There are steps you can take to prevent these fraudulent criminal activities from affecting your elderly parents. We will discuss what gaslighting is, popular scams to look out for, what you can do to prevent them, and what to do when a scam has already victimized your family member.
What is Gaslighting?
Gaslighting is the manipulation of another person to make them doubt their own sanity, perceptions, and things they know to be true.
An example would be if someone were to come in contact with you and insist they are a long-lost relative of yours. While you have no memory or recollection of them, they continue to share their artificial memories and eventually manipulate you to doubt your own perception. You start to believe they indeed were a family member. Often, they use this to their benefit in some way, usually financially.
Most often observed as a form of abuse in romantic relationships, you can also be a victim of gaslighting in the workplace or within your family.
Senior citizens are especially vulnerable to gaslighting because they have often begun to suffer memory loss and reduced cognitive function. Seniors reportedly lose an estimated $3 billion annually from financial scams. Being aware of the popular scams can help reduce the probability of falling for one.
Popular Scams and Gaslighting Schemes to Look Out For
- Romance: This is popular among the elderly because, in addition to the possibility of mental impairment, they are often lonely. Scammers pose as interested romantic partners on social media or by phone. They frequently use gaslighting techniques to isolate the victim from their family and trusted advisors in order to capitalize on their vulnerability.
- Tech Support: Con-artists call and insist there is an issue with the victim’s computer. They encourage access to login and repair the non-existent problem. From there, they gain access to passwords and other sensitive information.
- Advertising scams: Criminals use popular advertisements to pretend they’re offering the existing product or service. The service or product, of course, is one they don’t sell. They then collect money for something they’ll never provide.
- Home repairs: Through visiting the home or requesting a few answers to questions, scammers falsely determine that your elderly family member needs immediate home repairs. They ask for the money in advance for services they do not provide.
- Religion scams: Seniors with deep religious beliefs can be exploited. This scam is usually executed in person with two people. Also known as the blessing scam, the first person meets them and asks personal questions. The second criminal will listen in, then later claim to have psychic abilities.
The scammers use the victim’s religious beliefs to manipulate them into believing a special ceremony needs to be performed in order to prevent misfortunes. Part of the ceremony is often putting their valuables into a bag.
- Sweepstakes: A popular scam, a caller claims to be a legitimate agency and tells the victim they have won a prize of sorts. A fee is requested beforehand as a prerequisite to collecting their false winnings.
- Grandma scam: Names of a victim’s family are easily accessible in a quick online search. A criminal uses this information to call the elderly victim, claiming they are a specific child or grandchild in dire financial need.
- Government agencies: These vary from being the IRS seemingly needing your information, impersonation of reputable natural disaster agencies needing donations, and even senior benefits calls.
Understanding the current scams that exist is only the first step to being mindful of fraud potential. Criminals are crafting new scams every day, so it’s vital to take preventative measures to help your loved ones stay protected in the future.
How To Protect Your Elderly Parents from Falling For Scams
While you may look at some scams and attempted deception and know right away what they are (or aren’t), it’s not as evident to older adults who have lost some cognitive strengths. Here are a few things you can do to help:
- Talk to your parents. This communication may seem like a given, but many advise not to do something without explaining why. Rather than just telling them, “Don’t give the IRS your information by phone,” explain that the IRS will always send you written notice and that its legitimate private collection agencies will never ask for payment on a prepaid debit card, iTunes card, or gift card. If they understand this, they’ll recognize they weren’t an exception.
- Don’t make them feel ashamed, or anything less than sensible. Explaining not to trust strangers seeking personal information or money should be taught, but in a way that strengthens their trust in you. If they feel embarrassed, they’re unlikely to tell you if they did fall victim to a scam.
- Unlist your parent’s phone number, and if they’re still using a landline, encourage a cell phone.
- Put their physical addresses on lists that opt them out of junk mail. Once they are on this list, it forbids legitimate companies from sending junk mail. Therefore, anything they receive is likely a scam.
- Help them keep tabs on their credit report. Your loved one can request an annual free credit report to catch any new accounts opened in their name that they didn’t obtain.
- Look for warning signs. If they seem to have many more scam calls than the average person, it may mean they have fallen for one of the previous scams. Lists of previous victims are sold amongst con-artists to increase their odds of achieving a successful scam. If you have access to their financial accounts, check for unusual monthly charges.
- Have your parent add a Trusted Contact to their brokerage account. Have them provide a contact name and phone number to the brokerage firm, and give the firm permission to call that person if they believe your parent may have been exploited financially. Charles Schwab & Co., for example, encourages clients to provide this person’s name. The Trusted Contact will not have access to any information about the account but is simply a person that the brokerage can call if they suspect a problem.
- Consider wealth management. Companies that manage finances are often the first to notice when something looks awry. Getting in touch with a reputable company to help handle your parents’ finances will give you peace of mind. Below you will find a real-life example in which a wealth manager prevented a large financial loss to a scammer’s tricks.
Financial Planning for Senior Citizens Can Help Reduce Scam Risk
As discussed, romantic relationships are often the avenue for gaslighting scams and elder financial abuse. Scammers can more easily coerce older adults into providing money to a supposed romantic partner for a deemed emergency, housing, medical, or family member in trouble.
Recently, a real-life gaslighting incident affected an older gentleman client, resulting in financial loss. But without our wealth management services, it would have been much more significant.
An 85-year old lonely widower lost a large amount of money from his checking account to a gaslighting scam. The man sent the money overseas to a woman who had him believing she was his fiancee. She gained his trust through gaslighting tactics, had him agree to marry her over the phone, and then claimed she needed money for a medical procedure before their wedding.
Our client had another $55,000 within a trust we managed. The request for this disbursement raised a red flag. In a conversation we had with him, he let us know about his upcoming wedding and the money needs. We knew right away the man was being scammed and encouraged him to reconsider.
Due to the Gramm-Leach-Bliley Act, we were not able to alert his children or family members. Our firm opened a private investigation into the woman to help our client keep his assets safe. With our research and findings, we were able to convince our client not to send the woman his money, and afterward, he also discussed the matters with his son and daughter. We were also able to pass on the woman’s information to authorities hoping to prevent her from gaslighting more victims.
Because we get to know our wealth management clients very well and truly care about their wellbeing, we are more likely to know when something out of the ordinary is going on. We are especially helpful when the parent doesn’t want to share financial information with his or her children due to a desire to remain independent. He will often share it with us before telling a child. Without our team constantly looking out for him, the situation could have been detrimental to his life savings.
If you have an elderly parent or relative that you feel can benefit from our wealth management services, contact us today for more information.