Seniors are more vulnerable to card fraud, but there are some protections you can put in place
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You may be savvy to the wicked ways of phishers, fraudsters, scammers and fake foreign princes – but are your parents?
If you are worried about your parents’ ability to deal with financial fraud, the first step is to determine if your loved ones need financial oversight, and how much. Here are clues to look for:
- Do they seem to let the mail pile up, including bills? Check for past-due notices or utility shut-offs, which indicate they’re not handling finances well, said Catherine Seal, a certified elder law attorney with the Colorado firm Kirkland & Seal.
- Are there a few extra items around the house every month that look brand new? Why are there Victoria’s Secret charges on an 85-year-old woman’s card statement (possible, but not probable)? Are clothes that are bought the size of a caregiver, not the senior?
- “Be very careful who is coming into the house,” said Phyllis Brostoff, past president of the Aging Life Care Association, an organization of professional care managers. It’s not unusual, says Brostoff, for an elderly person to hand over a credit card to a caregiver or neighbor to get groceries or prescriptions picked up. Unfortunately, that card can then be used for items other than what it was intended for.
- And your ears should prick up if a parent is suddenly talking about a new “best friend,” Seal said. Especially if “it’s someone who is \u2018just like a daughter’ to them. Someone who drives them or takes them to lunch – anyone who appears to have too much information and access to financial information or a credit card.”
- A change in banking habits or a new bank account can also indicate your parent might be giving money to someone who shouldn’t be getting it. “I knew of an elderly woman who had never used ATMs who suddenly started to,” Seal said.
Starting the conversation
If these or other warning signs pop up, see if you can broach the subject when there’s an opening – maybe a parent mentions how many credit card offers she’s receiving or that she seems to be forgetting to pay her bill on time.
You have to find out who the person trusts with information about their finances. Sometimes this is a paid professional like an accountant or financial planner.
|\u2014 Liz Loewy|
The way to get a parent on board is to talk about your own concerns with scams and fraud. “Enter the conversation saying, \u2018This is something we’re doing, and why don’t you do this. Let’s keep an eye on each other,’” said Liz Loewy, a former Manhattan prosecutor who is general counsel for the financial monitoring company EverSafe.
Brostoff said a straightforward conversation is best. “This depends on the relationship and the individual. You have to find out who the person trusts with information about their finances. Sometimes this is a paid professional like an accountant or financial planner.
“If we say, ‘Let’s have a conversation together,’ people are usually receptive.”
If it’s clear the time has come to take over the finances, you can ask for power of attorney, but that is something the parent has to grant. The forms for power of attorney should be all in place before actually needed, said Seal, so arrange it all early on. Present it as a matter of getting finances in order rather than solving a problem, she added.
While online forms granting power of attorney are available, Seal said it’s best to check with a lawyer, as standardized forms will not cover everything. Laws vary by state, so it’s crucial to make sure you know what you need for your situation.
Powers of attorney specify what is covered – usually the power to access and control all finances, including credit cards. But a power of attorney is not responsible for existing debts.
Without power of attorney, there is no legal right to oversee a parent’s finances. But there are still a number of steps that can be taken to safeguard their financial well-being.
Steps to stem card fraud, missed payments
Sometimes seniors are open to having some of the financial burden lifted, Brostoff said, such as allowing a second pair of eyes to review credit card statements just to make sure there is no fraud – which also allows the adult child to see if there is overspending or forgotten payments.
It’s also possible to suggest adding email alerts to a parent’s bank account, so a close relative or friend is notified about unusual charges, for example. This can be particularly helpful if parents say they don’t want their children to see the credit card statement, but it’s OK for them to receive alerts regarding transactions, said Loewy.
Setting up recurring bill payments and automatic direct deposits can also be helpful.
“What we often recommend to families is that we want to narrow down the methods available to spend money,” Brostoff said.
Products, services designed to help
Some new options are designed to help. For example, True Link, a debit card aimed at seniors or other vulnerable populations, such as a mentally disabled adult child, became available four years ago and costs $10 a month.
The idea is to provide “a tool to preserve their independence,” said Kai Stinchcombe, True Link’s chief executive officer. “The focus is on shared decision-making.”
True Link can block areas in which the card is being potentially misused or creating problems. For example, if a senior is having difficulty keeping track of cash withdrawals, the True Link card might be invalid at ATMs and limited to $20 cash back at a grocery stores.
It can also block casinos, liquor stores, home shopping channels or sweepstakes companies that promise big winnings if the recipient sends in some money. It can also block wire transfers, which fraudulent companies often request when asking for money. The cardholder and a family member or friend can get alerts for various transactions.
Another option, if your parent is willing, is to turn to a financial monitoring system. EverSafe, for example, looks at all financial transactions and records including credit cards. It checks to see if the cardholder is paying bills twice, skipping regular payments or applying for too many credit cards. The service’s monthly price ranges from $7.49 to $22.99.
Another option is to bring in a private bookkeeper or bill-paying company on a regular basis. Make sure it’s a reputable firm, and ideally, one that works with older people, Brostoff said.
There are some easy ways to limit potential credit card cons by addressing the source of the problem. Register them on the national Do Not Call registry of phone numbers where marketers are not welcome. If legitimate sales calls cannot come in, those that do make the phone ring are likely scammers.
And sign them up for a robocall blocking service, such as Nomorobo or Hiya. Robocalls are often fraudsters promoting anything from debt consolidation to lower interest rates for credit cards or mortgages, trying to get people’s money or credit card information.
Taking away a credit card is “demoralizing and emotionally hurtful,” Loewy said, so it’s important to research all the choices available before making that ultimate decision.