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Protect elderly parents' credit cards from illegal use

Adult children may feel entitled to use parents' cards without their knowledge

By

To Her Credit
To Her Credit, Sally Herigstad
Sally Herigstad is a certified public accountant and the author of "Help! I Can't Pay My Bills: Surviving a Financial Crisis" (St. Martin's Press, 2006). She writes "To Her Credit," a weekly reader Q&A column about issues involving women, credit and debt, for CreditCards.com, and also wrote for MSN Money, Interest.com and Bankrate.com, and has guested on Martha Stewart Radio and other programs. See her website SallyHerigstad.com for more personal finance tips and free budgeting worksheets.
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Question for the CreditCards.com expert

Dear To Her Credit,
A few days before my mother passed away on June 25, 2011, my sister was in my parents' lawyer's office trying to get the power of attorney switched to her. Since then, I've discovered that she has been draining my parents' finances over the past year. This has included running up my mother's credit cards just before she died.

I contacted Discover about my mother's card in July, but they were only interested in the payoff. I have contacted Adult Protection Services, but they have this as a low priority since there is no physical abuse. My sister continues to get away with this behavior, while my father needs this money for his care.

What can I do? I am very frustrated.  -- Bonnie

Answer for the CreditCards.com expert

Dear Bonnie,
I've been getting a spate of letters about financial elder abuse lately. It's alarming to realize how often this type of behavior must be happening all over the country!

Before credit cards were widely used, adult children were limited to taking cash or belongings from their aging parents, or with a bit more effort, getting into their bank accounts. Now, stealing from mom or dad is as easy as borrowing a credit card. They can take money parents don't even have and steal their parents' good credit history while they're at it.

Sometimes, siblings who help themselves to their parents' money can rationalize what they are doing as OK. Maybe they've always been subsidized by mom and expect to continue to do so well into middle age. Or if they help parents run errands and do other chores, they may not think anything of throwing a few things in the cart for themselves.

Or they may just not be thinking. One woman noticed that her brother was continually asking for -- and receiving -- financial help from their mom. The woman knew her brother made several times as much money as mom did, which she pointed out to her brother. He truly had no idea, and once he did, the requests for money stopped.

You didn't say if your sister was successful in getting the power of attorney for your parents. If she got a power of attorney for your mother shortly before she died, it wouldn't have been in effect very long. Powers of attorney are only in force while a person is alive.

If she got a power of attorney for your father, and he is competent and is willing to give the power of attorney to you, you should have that done as soon as possible.

If your father is no longer competent, you should hire an elder care attorney to help you take control of your father's finances -- the sooner, the better. In the meantime, you can make it harder for your sister to drain accounts by hiding checkbooks, changing account passwords and alerting banks and creditors that there is a problem.

Now, as to the credit cards. If your sister used your mother's credit cards before she died, and she was not an authorized user on the cards, she committed fraud. If you are willing to have her prosecuted, contact the credit card company and tell them the card was used without authorization. I know you called Discover, but it's going to take more than a phone call.

Send a letter of dispute to Discover and any other credit card company she used, using the address designated for billing disputes. If possible, send the letter within 60 days of the bill with the fraudulent charges. Send the letter by certified mail, and be sure to keep a copy.

Don't be surprised if your sister fights back. She'll probably fire accusations right back at you, and it could get ugly. The whole thing can be very distressing to your father, who is already suffering from the recent loss of his wife.

One way to remove doubt about who is working in your father's best interest is to get a third party involved. If you're not able to take control of your father's finances, or if you're afraid your own motives are being falsely questioned, you can let another family member, friend or trusted professional oversee your father's financial accounts. Another option is to contact a member of the American Association of Daily Money Managers. Paying someone to secure your dad's accounts and handle his day-to-day finances is a small price to pay compared to standing by while your dad loses the financial security that he and your mother worked all their lives to provide.

See related: How to detect and prevent elderly financial abuse, Avoid sharing credit with elderly parents, How to stop an adult daughter abusing elderly mom's credit

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Published: September 30, 2011


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