How to prevent senior financial fraud from happening to you

Senior fraud financial is on the rise. While seniors can take steps to be safe and secure, education to understand the nature of senior financial fraud itself is critical. Merrill Edge Vice President, Whitney Trimble, answers some of the most asked questions about senior financial fraud.

Is senior fraud something to be concerned about?

A recent Wall Street Journal article reported that 43 percent of older Americans exhibit one or more signs of financial victimization. The incidence of senior fraud is increasing due to the sheer scale of people past, at, or near retirement (as many as 10,000 baby boomers retire every day), combined with the fact that senior citizens are attractive targets for perpetrators.

Why are seniors targeted more than others?

According to the FBI, fraud occurs more often with senior citizens because they are more likely to have accumulated wealth and have excellent credit, they are less likely to report fraud, and they are more likely to be experiencing cognitive decline. The growing incidence of senior financial exploitation led to the Centers for Disease Control and Prevention to define it as a public health concern in September.

Should I be concerned about senior fraud happening to me?

Given the growing incidence of senior fraud, precautions should be taken. While fraud can and does happen anonymously, fraudsters can also be people who you know, including family members. This makes the issue a delicate topic to address.

A study of 201 financial advisors at Merrill Lynch in 2015 found that when elder fraud was suspected, the most common potential perpetrator was a family member. This is not to say family members should be suspected as fraudsters, but it serves as a reminder that a perpetrator of fraud can be almost anyone, even someone who you know and trust.

What can I do to prevent senior fraud from happening to me?

One under-appreciated way to reduce the chances of being victimized is, very simply, to interact with your social network more. Research conducted by Merrill Lynch suggests that isolation can actually cause victimization rather than prevent it. This indicates the importance of maintaining a social network. Should elderly people become victimized by fraud, they may deepen their isolation out of shame, embarrassment, or not wanting to burden others with their problems.

However, by engaging with family members, friends, neighbors, colleagues, and acquaintances and by broadening one’s social network, a senior can benefit from better information flow and collaborative decision-making. This intentional openness can be used by seniors and their family members to prevent, detect, and recover from senior fraud.

What can family members do to help protect their loved ones from fraud?

One of the more effective ways is to hold quarterly or annual family meetings focused on open and honest dialogue about overall financial concerns, including fraud. Some may find this difficult because senior members of a family tend not to want to open up about their worries or fears, but family members should know these conversations may be able to help prevent feelings of isolation and detect irregularities like the onset of cognitive decline. Above all, a family meeting sends positive signals of love and concern for senior family members, which may be worth it alone.