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How to Protect Your Parents from Financial Fraud


Spotting scams and keeping your loved ones safe


Alexandra Allred knew her parents were in trouble when she flew from Dallas to Washington, D.C., to visit them a few years ago. Not only did she witness symptoms of her mother's Alzheimer's disease and her father's dementia, she saw unusual packages arriving by mail: anti-aging cream, a hip-hop basketball magazine and — worst of all — $720 of frozen meat. "My father was retired, lonely … he was the perfect victim."


Older adults tend to have retirement savings, a paid-off mortgage and excellent credit. As the over-65 population swells — the U.S. Census Bureau predicts this segment to grow from 43.1 million in 2012 to 83.7 million by 2050 — its buying power will skyrocket. Read more about helping your parents manage their money.


According to an AARP report, over the next 20 years, spending by people over age 50 is expected to grow 58 percent to $4.74 trillion. Seniors' substantial buying power makes them a prime target for both savvy retailers and manipulative scammers.


Although cognitive decline makes some older adults especially vulnerable, even mentally sharp seniors can fall victim to scams. University of Iowa researchers found that the brain's ventromedial prefrontal cortex (vmPFC), the region that controls belief and doubt, deteriorates as we age. When this happens, we become more vulnerable to misleading and fraudulent information.


Here are a few common scam scenarios and advice on how to stop them in their tracks.


Overpromise, Underdeliver.

Seniors are especially susceptible to products that overstate a result, especially when it relates to improved cognitive function, physical health, virility and anti-aging, according to the FBI. With so many new, legitimate prescription drugs and treatments on the market, it's not a stretch for seniors to believe fantastical claims.



Encourage your parent to enroll in a computer safety course that covers Internet scams. Check their local library or senior center for classes or consider an online course, such as the one offered by the Center for Cyber Safety and Education.


We need your help!

Many of us receive personally addressed sales letters that claim, "We need your help now!" Some older adults see their name and feel pressured to respond. "My father, a retired military officer, showed me a letter that said, 'our country needs you,'” says Allred. "He thought it was written directly to him and wasn't sure he should throw it away."



Put your parent on the opt-out list with the Direct Marketing Association to weed out junk mail. Report mail fraud to the U.S. Postal Inspection Service.


Grandma, I'm in trouble.

In one year alone, more than 25,000 older adults sent money — some draining their nest eggs — to people posing as family members in trouble. Usually fraudsters ask for wire transfers, which is the equivalent of cash.


Other common scams include government imposters posing as Social Security and Medicare reps, pyramid and Ponzi schemes and real estate scams. Older adults that take people at their word can easily fall for these schemes.



Unlist your parent's telephone number and put it on the "do not call" list. Check each parent’s credit report for fraudulent accounts opened under their names. Monitor all bank and credit card accounts for unusual activity.


To ensure transparency, Allred, who now manages her parents' finances, developed a close relationship with her parents' bank and gave her aunt and uncle permission to view the account. "Full disclosure better protects my parents," she says. "And if the bank manager sees something funny on the account, she'll call me."


You can be the first line of defense. Make sure your parents know to ask you if they have any suspicions at all. But also remember that many times, it won’t occur to them that’s it fraud, so follow the safety measures above, too. If you suspect your parent is a scam victim, call the AARP Fraud Fighter Call Center at 800-646-2283.