5 Ways To Protect Older Adults From Financial Abuse and Exploitation

According to a report from the Federal Trade Commission (FTC), U.S. adults over the age of 60 lost $1.6 billion to fraud in 2022. That figure is especially worrying because so many older adults face financial struggles. An analysis of U.S. Census data by the National Council on Aging (NCOA) found that more than 17 million people over 65 were financially insecure, living close to the edge of poverty or below. 

The financial exploitation of vulnerable adults is all too common and can happen through many different methods.

What Is Financial Exploitation? 

Federal law defines financial exploitation as a type of abuse that involves the “illegal or improper use of an elderly or adult with a disability’s money, property, or other resources for monetary or personal benefit, profit or gain.”   

The financial exploitation of the elderly may be committed by close family members or distant strangers in another country. Because this type of crime takes so many forms, it’s especially important to watch out for indications that you or someone you know could be a victim. Criminals constantly try new tactics and take advantage of the latest technology.  

Signs of Financial Abuse 

Financial exploitation can be much harder to recognize than the more obvious injuries from physical abuse or neglect. However, there are certain signs that frequently occur. For example, an older adult might: 

• Start making unusual withdrawals or transfers from their bank accounts. 
• Invest in an unknown company. 
• Share their credit card number or personal information. 
• Unexpectedly change their will. 
• Give away valuables. 

Protect yourself and others by learning about some of the ways that older adults are financially abused. Take these proactive steps to keep your money and belongings safe. 

1. Learn About Common Scams 

The details may change, but criminals have run certain types of scams for many years. By getting to know how these tricks work, you’ll be better prepared to identify dangers before it’s too late. 

•  Older adults are frequently targets of healthcare fraud. You may be contacted by individuals who ask you to pay to renew your Medicare card or for help finding a Medicare plan. Some companies even sell fraudulent insurance plans that charge high fees while providing little or no coverage. 
• Identity theft occurs when someone else uses your personal information for purposes like making purchases and opening accounts. 
• In imposter scams, also called “grandparent scams,” a criminal pretends to be a relative or friend and tries to convince you to send money. These fraudsters often ask to receive the funds through a wire transfer or gift cards and insist they need them right away. 
• Charity fraud occurs when someone asks you to donate to an organization that does little or no actual work. 
• In a “you’ve won” scam, you receive a notification that you were selected to receive cash or another prize and that you need to send money to cover taxes or fees. No prize ever comes.

2. Understand Your Healthcare Coverage and Costs

To prevent healthcare fraud, you should always be careful about sharing either your own personal information or the private details of any loved ones you care for. Learn what costs you can expect to pay for medical services under your insurance, so you aren’t caught off-guard. 

Carefully examine any bills or statements you receive. Check that you haven’t been charged for care you never received, that the same charge isn’t listed multiple times, and that the balance due makes sense based on how much of the cost your insurance covers. Problems in billing are often a misunderstanding or mistake that you can clear up by contacting your healthcare provider’s office, but they can also be an attempt at fraud.  

If you’re considering a change to your healthcare coverage, such as enrolling in a Medicare Advantage plan from a private insurance carrier to substitute for Original Medicare, make your choice carefully. Work with a licensed insurance agent to find the option that best fits your needs. Be cautious when you’re contacted unexpectedly about any healthcare plan or service, especially if you’re asked for private information or a payment. 

3. Secure Your Financial Accounts 

Scammers are always looking for ways into other people’s bank accounts, credit cards, or brokerage accounts. They may try to gain access online by tricking you into sharing your login details or by using a hacking program to force their way in. You can protect your finances by never sharing your passwords with anyone (even if they claim to be an employee at your bank) and setting up layers of security. 

That begins with picking a strong password that’s hard to guess. The FTC recommends using at least 12 characters, preferably made up of randomly chosen — but memorable — words. Enabling two-factor or multifactor authentication helps by requiring the user to enter a code sent by text or email. For even more protection, look into an authenticator app (which you use to sign into all your accounts securely) or a security key (a physical piece of hardware that confirms your identity). 

4. Prepare for Potential Illness 

Getting older comes with a growing risk of developing severe or chronic health problems that make it difficult to handle your own finances. However, you can ensure that you and your loved ones are well prepared.  

The federal Consumer Financial Protection Bureau and Securities and Exchange Commission recommended several measures to reduce the risk that anyone will take advantage of you or someone you care for during a time of diminished financial capacity: 

• Organize and safely store documents like bank statements, credit information, insurance policies, retirement benefit summaries, and social security payment details.  
• Keep a list of your passwords in a separate location. 
• Maintain an up-to-date record of contact information for your healthcare providers and other professionals like accountants and lawyers. 
• Consider appointing a trusted individual to manage financial decisions in a situation where you can’t by setting up a durable financial power of attorney. You can also use Social Security Advance Designation to select up to three people to manage your benefits.
• If you have investments, provide your brokerage with a trusted contact person. This contact is someone the firm can reach out to if they’re having a hard time getting a hold of you or think you are being financially exploited. They can confirm your current contact information and communicate about any health issues you might be experiencing.
  

5. Learn About the Dangers of New Technology

Technology has made it very convenient to pay your bills, manage your finances, and find information, but there are also serious risks. As artificial intelligence revolutionizes areas like business, education, and entertainment, it creates even more vulnerabilities to financial abuse. 

For example, the imposter scam might be much more effective at convincing you to send money or information when the criminal uses technology to impersonate a loved one’s voice. It’s becoming more common for scammers to trick people by using AI to create fake voice recordings, videos, and photos. 

The AARP suggested taking these steps to avoid being fooled online or over the phone: 

• Be very careful about clicking on any links you receive in your email or text messages or see in an ad. If a link isn’t from a trustworthy source, it may lead to downloading software that steals your personal information or money. 
• Criminals can trick your caller ID. If you get an unexpected call from a business or relative, especially one asking for money or private information, hang up and call them back.  
• Set up a codeword to use with family members or close friends so you can easily confirm that it’s actually them on the other end of a call. 
• Scams often try to create a sense of urgency; some faked voices even claim to be kidnapped grandchildren. Always take a moment to think before you act. 

If you’re worried that you or someone you know is being scammed or financially abused, there are a variety of resources to assist you. You can report suspected fraud to the FTC. If you think an older adult is being financially abused, get in touch with the local Adult Protective Services program. In an urgent situation, contact the police. 

About GoHealth 

GoHealth is a leading health insurance marketplace and Medicare-focused digital health company. Enrolling in a health insurance plan can be confusing for customers, and the seemingly small differences between plans can lead to significant out-of-pocket costs or lack of access to critical medicines and even providers. GoHealth combines cutting-edge technology, data science, and deep industry expertise to build trusted relationships with consumers and match them with the healthcare policy and carrier that is right for them. Since its inception, GoHealth has enrolled millions of people in Medicare plans and individual and family plans. For more information, visit GoHealth.com.