NEW YORK (MainStreet) — As your parents get older, it's just a fact of life that you need to start taking more and more care of them. Oftentimes that means managing their finances. And that means protecting them against identity theft. To boot, more often than not, it's a family member who is committing fraud or identity theft in the name of the older relative. In such a hostile climate for seniors, how can you protect your family members against financial abuse, identity theft and other forms of fraud?
Don't Let One Person Act Alone
Since a major source of identity theft is within the family, Steven J. Weisman, a professor at Bentley University and the proprietor of Scamicide.com, notes that making it harder for one person to steal identity theft is a prudent step. "If you have one or two people assisting grandma, they can assist her, but they can also keep an eye on each other." Weisman says.
It's also important to have a joint power of attorney, says Ingrid Evans of Evans Law Firm, a San Francisco firm specializing in elder abuse and financial fraud. "Put together a trust and have a power of attorney for finances and healt," she says. Appoint two people. They have to bounce their decisions off one another." Evans says that it's important to appoint two different siblings, or a friend and a sibling or a spouse. But don't appoint two spouses. It's a lot easier for a man and wife to collude than two brothers.
Another way to prevent one person from having total control over a senior's finances is through what is sometimes called a "control account." "A lot of times, seniors want to have a joint bank account," says Evans. "But you're basically saying that someone else can access as much of the money as they want." By contrast, a control account means that a person is appointed to manage the account, but that person is not an owner.
Strongly Vet Any In-Home Caregivers
Other than relatives, the most common source of identity theft for seniors is caregivers, especially those who live in the home. Evans says that in-home caregivers are the ones she sees abusing the system the most. However, most caregivers are great at their job and love what they do. You just have to vet out the bad ones. "People let someone in because they haven't done a good background check," she says. "The position of authority and trust creates an environment for abuse." Oftentimes the abuse starts with health care, then moves on to finances. Evans advises people to keep powers of attorney for health and finances separates to minimize the damage a caregiver can do.
Secure or Eliminate Paper Statements
A lot of times, seniors are reluctant to do their banking online. But even if they're doing their banking the old-fashioned way, there's no reason to keep their banking statements around. "If you're reviewing bank statements, don't keep them," Evans says. "Review them once a month, then shred them. If you keep them around, it leaves your account information lying around for people who are trying to steal from you."
Weisman agrees. "You want to have all your documents very secure in a lockbox or a saf," he says. "Even a housekeeper can steal statements that are lying around. You don't want to make it as easy as opening up a drawer." Curiously, this is a way that college students as well as seniors are victimized. The difference is that younger people tend to be more apt to be doing their banking online, so they're able to avoid many of the pitfalls associated with public mailboxes. Not so with seniors.
So Weisman says it's important to put all financial records, bank statements, income tax documents and medical records into a safe or lockbox if you're going to hold onto them. On the other hand, Evans isn't a big fan of safety deposit boxes, which she says are often not much more secure than the drawer at home. If you are going to use one, she says to keep an inventory of what's inside with pictures so you know immediately if there's any funny business going on.
Talk to Your Parents About Whom to Talk To
One of the easiest ways for people to get at your parents' information is to just call them and ask for it. Weisman notes that it's common for people to call up seniors, claiming to be with Medicare, saying that they need a Social Security number for some kind of benefit. And, because seniors are aware that they're eligible for such benefits, but not aware that government agencies won't call for their information, it makes them particularly easy targets for scammers of all stripes.
"Even if your parents have caller ID, the caller ID can be spoofed and look like it's coming from anywhere," Weisman says. So the rule of thumb is to never give out personal information to anyone who has called you. If it appears legitimate, call back on a line that you know is legit, not the number you've been given. Listen if you must, but never give that information out over the phone.
Protecting your parents doesn't have to be hard. With a little bit of due diligence and prudence, you can keep them from getting fleeced and allow them to enjoy their golden years comfortably.