Kip Tips
Protect Your Parents From Scams
Follow these steps to lower the chances that your mom or dad will become victims.
By Cameron Huddleston, Contributing Editor, Kiplinger.com
June 17, 2010
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Kim Lankford in her Ask Kim column today writes about how to protect parents from elder investment fraud. Unfortunately, getting pressured into inappropriate investments isn’t the only way seniors are taken advantage of financially.
For example, my mom -- who has Alzheimer’s disease -- almost became the victim of a con artist who wanted her to wire him money to claim a “prize” she allegedly won (see Scams, Scams Everywhere). After my mom almost was scammed, I got her a phone with caller ID and told her to let calls from numbers she didn’t recognize go to voicemail. So far, this has helped my mom avoid telephone pitches from scammers.
Clearly, relying on caller ID alone won’t protect my mom. There are several other steps that I have taken and that financial planners and eldercare specialists recommend to protect older adults, especially those with dementia, from being taken advantage of by con artists, high-pressure sales people and even legitimate groups.
Put your parents on do-not-call lists. Most telemarketers will stop calling once a number has been on the National Do Not Call Registry for 31 days. You can register home and cell phone numbers for free at donotcall.gov or by calling 888-382-1222.
Monitor their mail. Tell your parents that you’ve heard about scams targeting seniors and that you want to help protect them, says Linda Fodrini-Johnson, president of the National Association of Professional Geriatric Care Managers. If you live in the same town, ask them to collect their mail during the week so that you can go through it and write checks together. Otherwise, ask a trusted friend or your parents’ eldercare provider (see The Long-Distance Caregiver) to help weed out questionable mail and requests for money.
Limit charitable giving. “A mailbox stuffed with charitable donation requests is a red flag” that your parents are susceptible to pleas for money and likely have given a lot already, says Greg Merlino, a certified financial planner and president of Ameriway Financial Services in Voorhees, N.J. However, you don’t want to stop your parents’ charitable donations entirely if that is something that has been important to them throughout their lives. Fodrini-Johnson suggests that you help your parents develop a giving plan that allows them to make donations but only to one or two organizations that matter most to them.
Monitor their accounts. Look at bank and credit-card statements with your parents and ask about questionable payments. If you already have key information about their accounts and have power of attorney, become a joint account holder so you can receive bank statements or set up online banking (if your parents haven’t already) to monitor activity. Get copies of their credit reports at www.annualcreditreport.com to make sure they aren’t victims of identity theft.
Limit access to cash and credit. This is the toughest step to take and is geared more to people whose parents have dementia and need a lot of help managing their finances. You can start by setting up automatic payments for regular bills to reduce the number of checks that need to be written. If you have access to your parent’s checking account, limit the amount of money in it by regularly transferring funds to a savings or money-market account. Give your parents a secured credit card, which allows them to make a deposit that becomes their credit limit, and take away the other cards.
In cases where your parents really are being taken advantage of, consider giving them a cash allowance, says Carlo Panaccione, a certified financial planner and president of Navigation Group in Redwood Shores, Calif. “A lot of people will avoid it because they are afraid of conflict with their parents,” Panccione says. “What’s the alternative? Let them go until they have nothing left?” To make it easier, don’t call it an allowance -- call it a spending plan. Tell your parents you’re giving them a certain amount each week or month to spend as they please and that you’ll take care of the rest (through automatic bill pay, etc.), Panaccione says. And be sure to let them know that you’re doing this because you love them, not because you’re trying to control them.
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Reader Comments (5)
Posted by: Nomen at 06/20/2010 08:48:54 AM
This is a very good article. It is also very difficult. No matter how hard you try and how well you do, parents, especially with dementia, will not always understand nor always appreciate your effort. I always explained to my parents everything that I did ahead of time and even gave them a spreadsheet of their assets every few months so that they knew where their money was and if they had enough. It is also a good idea to share this information with other family members so that trust is maintained. It is also extremely important to monitor their mail. Charities, insurance, and investment people are like vultures. Give money to one and twenty more show up and keep showing up. I finally convinced my Mother to only give to local charities and only after we checked them out. The only part of this article that I would disagree with is automatic bill paying. It is much better to look at each bill and write a check. Sadly, you can't trust anyone. Even things like the phone bill will have often have services added on that weren't asked for. Always ask for cramming or billing protection if possible. Once you pay a bill, it is very difficult if not impossible to get your money back.
Posted by: Cameron Huddleston at 06/21/2010 11:06:58 AM
Hi, Nomen, I'm the author of this column. Thanks for your comment. I agree that it is difficult for the same reasons you detailed. Dealing with my mom's dementia (and all the responsibilities I have had to assume for her) has been one of the hardest things I've ever done.
Posted by: Nomen at 06/22/2010 07:44:32 PM
Hi Cameron, thanks for the thanks. After seven years of helping my ailing parents they have both now passed. Losing the first parent is hard. Taking care of them is also hard but losing the second parent is by far the hardest. After they are both gone clearing up the estate is a huge and painful job. This is when planning ahead, the wills, and instructions written by your parents really help at a difficult time. Selling off your parents assets which they took a lifetime to accumulate is like erasing their accomplishments from the face of the earth. Even after keeping personal items, family photos, and other keepsakes, nothing will ever be the same. No more family dinners or calling to ask for advice. But fortunately, my parents planned ahead, left instructions, and even made their own final arrangements well ahead of time. Mom even wrote her own obituary. That was their gift to me.
Posted by: SSarkis at 06/28/2010 09:53:55 AM
The website to the National Do Not Call Registry is: donotcall.gov
Posted by: EdB at 08/24/2010 05:07:37 PM
Believe that achieving security for a loved one is not a one step or method process. When you create security measures, you will need to create multiple layers of protection and monitoring(castles had multiple walls, so should you) - the scammers are persistent and you need to be equally vigilant. DoNotCall works to some extent for legitimate callers: use it but remember - scammers don't care! Once they have your number, they will call. Think UNLISTED! Block your outgoing CallerID! My parents became the target of telephone scammers and I adopted the following strategy. In addition to the good steps outlined here for caller ID, put on the block from the telephone company that a caller MUST show their CallerID. WHY?? I purchased a new telephone having an internal phonebook and put in family, friends, doctors, etc. with names and numbers that works with CallerID. IF the caller is NOT in the phonebook, let them go to the answering machine or be screened by someone in the house (relative, caregiver, etc.) to avoid the scammers using CallerID spoofing. Frequently review the call log on the new phone and identify those numbers you do not know. Call numbers you do not recognize-Let them know you are watching! Discuss the results with elders and add numbers to the phonebook as appropriate. Over time, the scammers will stop because there are richer fields to harvest. Talk to your loved ones about scams and what can happen. If my experience is any precursor to yours, you will have to do this repeatedly to overcome resistance to their perceived loss of control, problems with remembering what to do, or just plain impulsiveness. If necessary, close accounts that have been attacked (and it probably will be necesssary). When new accounts are opened, do NOT give the account numbers to the parent. Remember, you are protecting them like you would protect your children - by setting boundaries.