AARP recently offered a webinar on “The Costs of Financial Exploitation & Tips to Prevent It”. It was a very interesting and eye-opening listen. One in five individuals fall victim to some form of financial exploitation. The average loss is $120,000, which for many can be their entire savings. And while you might say to yourself, “I’m smart and alert. I’m not going to let some stranger scam me out of my money.”, the research shows that it’s often not the strangers we have to worry about. It’s family and friends.
I’m not bringing this up to scare you or to make you suspect of anyone. But AARP’s philosophy of “If you can spot a scam, you can stop a scam.” Is a good one. AARP mentioned during the webinar that being aware of scams makes a person 80% less likely to engage in one and if a person does start to engage, it makes them 40% less likely to be a victim. So, talking about scams, fraud, and financial exploitation is an important topic.
Many of us are well aware of the Social Security Administration scams going on. But we’re already hearing about scams associated with the stimulus checks that we’re scheduled to receive. That’s right, we don’t even know when we’re going to get these checks and there are already scams in place to get them from us.
The webinar pointed out five actions to look out for when it comes to financial exploitation. These might be actions that you want to discuss with family members or ask someone to review with you (so you stay alert as well).
- Pay attention to withdrawals, loans, and overall transactions. It simply makes good financial sense to have regular reviews of your expenditures. This can also be a time to take note of anything unusual in your spending and address it. This isn’t about a lack of trust. It’s about making sure that our financial affairs are in order.
- Have two power of attorneys for checks and balances. It’s always recommended to have a power of attorney in estate planning. But I can see where it might make sense to have two. This can create checks and balances on financial decisions. It will take some conversations to figure out who those two people are – the last thing anyone wants to do is create friction. But it’s worth consideration.
- Ask your financial institution if they participate in the BankSafe program. The AARP BankSafe Initiative provides training to employees at financial institutions to help them spot potential signs of financial exploitation. Researchers have found this type of training gives employees greater confidence in recognizing and reporting cases resulting in 12 times more money being protected per employee.
- Learn about third party requests for money. During these difficult times, it can be wonderful to give to organizations and individuals who need assistance. I’m not saying to stop. But it’s important to take a moment and do our homework about where we’re sending our money.
- Screen your phone calls. AARP continues to bring up this point. Phone calls are an easy way to scam people. The best way to avoid a scam phone call is to let it go to voicemail. If it’s a legit call, they will leave a message. Let your family and friends know that you won’t answer spontaneous phone messages. Recommend they send a text or some other type of message, so you don’t have to deal with scam calls.
PLUS! in addition to scams about stimulus checks, another popular scam right now involves the U.S. Census. Individuals posing as census workers collect information that can be used in identity theft. If you’re concerned about this, check out the video “5 Ways to Avoid a Census Scam” and share it with others.
Talking about money is always a sensitive topic and no one wants to admit that they might have fallen victim to a scam. That’s why taking a preventative approach to financial exploitation is so important. Start the conversations early and get used to having open and honest conversations with people you trust.