Don’t let diminishing mental capacity leave you at risk
Whether sparked by an unfortunate event such as fall, a condition such as Dementia or Alzheimer’s disease or simply nature running its course, one of the unfortunate consequences of getting older is diminished mental capacity. Seniors are put at a much greater risk of being taken advantage of once diminishing mental capacity begins. Scammers, knowing this all too well, have devised a myriad of schemes to prey on seniors when their minds are not at their sharpest.
While one may picture a scammer as a stranger sitting behind a phone or computer monitor plotting to steal your money, it unfortunately is the case that many times financial exploitation is carried out by someone that plays an active role in your life and whom you would least expect such as a caregiver or a relative. Planning ahead and taking preventative measures is imperative to protect oneself or one’s loved one from the pitfalls that may arise from diminished mental capacity.
One of the most important things you can do to protect yourself is to cultivate a trusting relationship with your financial advisor. Because they know your behaviors and attitudes when it comes to your finances and are privy to such items as your spending habits and risk tolerance, they have the ability to sense when something is not quite right and act as an advocate on your behalf.
Providing your financial advisor with a list of trusted emergency contacts and outlining what information you feel comfortable sharing allows your financial advisor to reach out when they sense that you may be losing capacity or being taken advantage of. Although this will not give them the ability to make any important decisions on your behalf it can help to inform someone you trust of any possible red flags.
Designating a trusted relative or colleague and informing them of your financial situation can be another great defense in your playbook. One simple way is to create a list of assets and debts including account numbers and passwords providing a seamless method to continue to manage your affairs. Signing up for duplicate statements is another way to keep your trusted relative or colleague up to date on your accounts.
Having an attorney draft a financial power of attorney will allow you to grant someone you trust the latitude to make financial decisions on your behalf. This will give them the ability to pay bills, manage investment decisions and make the same financial decisions that you could yourself. Due to the robust nature of the capabilities accorded under a power of attorney it is crucial to choose someone whom you know and trust.
There are other simple ways to protect yourself from scammers such as adding your phone number to the do not call registry at donotcall.gov or adding an email filter to prevent unwanted spam from appearing in your inbox. An excellent resource titled “Money Smart for Older Adults” has been produced by the Consumer Financial Protection Bureau (CFPB)that does an excellent job of identifying various types of scams and provides detailed (guides) to protecting yourself from the dangers posed by those that seek to take advantage of seniors.
While preparing for the future is always the best option, hindsight can be 20/20 and sometimes scammers are able to take advantage of one’s financial situation. As embarrassing as it may be, it is always best to not let pride get the best of you and seek help before it is too late.
If you believe yourself or one of your loved ones is the victim of elder financial abuse there are a multitude of helpful resources available including:
- Department of Justice’s Elder Justice Initiative website: justice.gov/elderjustice/
- The SEC’s web page for Seniors: investor.gov/seniors
- Financial Protection for Older Americans webpage of the Consumer Financial Protection Bureau (CFPB): consumerfinance.gov/older-americans
If you are the victim of elder financial abuse or believe that a loved one is the victim of elder financial abuse you can find the right protective services by calling (800) 677-1116 or by visiting eldercare.gov.
If the abuse is financial in nature, contact the following:
- The SEC at (800) 732-0330 or sec.gov/page/investor-section-landing
- FINRA at (844) 574-3577 or finra.org/investors/have-problem/file-complaint/complaint-center
- Your state securities regulator which can be found at www.nasaa.org/contact-your-regulator/
If you have become the victim of identity theft it is import to reach out to your local police department and the FTC at (877) 438-4338 or by visiting identitytheft.gov.