How to Safeguard a Senior’s Finances

By Guest Contributor Andrew Rombach of LendEDU

Many senior citizens have been successfully managing their own finances for their entire adult lives, but medical issues and other factors can eventually combine to make that financial management too much for them to handle.

In addition, many older adults are often the targets of phishing scams and other types of fraud. Since some seniors aren’t tech-savvy, they can often be easily targeted by criminals looking to steal from them.

The good news is that there are steps that seniors can take to not only help keep those good financial habits intact but can also protect them from these dangers.

Habitually Check Bank Account Statements

In this age of instant notifications and real-time account monitoring, it can seem like bank account statements are obsolete.

Often seniors are used to living on a fixed income, which means that they might not check their statements very often or even feel the need to since they know how much they’re getting each month and where it’ll be spent. Not looking at account statements, however, can mean missed transactions—or even undetected fraud.

It’s important to look over your loved ones’ bank statements for them if they don’t, to make sure there isn’t anything out of the ordinary. That will not only help keep your senior safe but offer both of you some peace of mind as well.

If you do see something wrong, such as purchases the senior doesn’t remember making or obvious fraudulent charges, you can contact authorities, merchants, and other parties immediately to get the problem handled.

Request a Free Annual Credit Report Each Year

You can request a credit report for free from the three major credit bureaus each year, and doing so can alert you about any new accounts opened in the account holders name, or any other issues that may be going on with their credit such as other financial frauds.

When you receive the credit report, look it over carefully—and not just for new accounts. Check the addresses and recent inquiries as well. Sometimes scammers will use new addresses while making credit inquiries or applying for credit.

Even if they are unable to open the new account, that attempt will leave a data trail in your loved one’s credit report that can alert you to a problem.

If necessary, you can also put a freeze on a senior’s credit report to ensure that no one can apply for credit in their name. Keep in mind that if you do this, they will also not be able to apply for credit while the freeze is active, so if they’ll need more credit later the freeze will need to be taken off.

Try to Stick to Plastic

Many seniors are used to dealing with cash since they grew up in a cash economy. It might seem more comfortable for them to keep cash in the house, but this can make them vulnerable to door-to-door scams and other crimes.

Instead of keeping large amounts of cash in the home, encourage them to use debit or credit cards instead. They’re easy to use and offer a layer of protection from direct theft and fraudulent purchases.  You may also specifically consider getting them a credit card with an authorized user so it’s easier to monitor their account to make sure nothing suspicious is going on.

Make sure they know the dangers of shopping online and give them pointers of common scams if they don’t already know. Additionally, seniors should avoid running into credit card debt; average credit card debt is roughly $5,638 for people aged 75 or older. Being mindful of this and tracking expenses can help avoid carrying a balance on a credit card. High-interest rates can lead to problems if the debt is left unpaid. Aside from the cost, a senior’s credit could be damaged if they miss payments.

If a senior is already dealing with credit card debt, they could consider consolidating it with a personal loan. The best personal loans have rates as low as 4.99% for creditworthy applicants, which may help save money on repayment.

Set Up Automatic Updates for Suspicious Activity

Another benefit to using bank accounts and plastic is that you can set automatic notifications for any activity that looks suspicious, alerting you to potential problems immediately.

Credit cards, for instance, monitor for spending patterns that seem out of the ordinary, such as charges originating in foreign countries if your senior doesn’t travel.

By setting up automatic updates, you’ll be able to catch any fraud or crime immediately, which can mean the difference between your senior being a long-term victim and stopping any fraud in its tracks.

Consider Implementing an Authorized Signer Safeguard

It can be uncomfortable for an older adult to get an authorized signer on a bank account if they’ve spent their entire lives being independent, but an authorized signer can be a great tool in safeguarding against rash decisions for people of all ages.

With an authorized signer, no large purchases can be made without a second signature—and that can help protect against fraud calls that demand large sums of money immediately, as well as other types of fraud that target seniors.

Some scams against seniors try to convince them that someone they know and love, such as a family member, is in trouble somehow. Seniors often wire thousands of dollars to these scammers, genuinely convinced they’re helping a loved one in an emergency. With an authorized signer, a second pair of eyes can see these scams for what they are before the senior gets victimized.

When choosing a party for the authorized signer, make sure it’s someone that you trust, and set it up so that they cannot make purchases or access any of the assets on their own. This way they can’t also steal any of the senior’s assets; they’re merely there to offer a verification in case a senior wants to make a large purchase.

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Andrew Rombach is a Content Associate for LendEDU – a website that helps consumers and small business owners with their finances. When he’s not working, you can find Andrew hiking, hanging with his cat Colby, or edge guarding in Super Smash Bros.