While identity theft and financial fraud know no specific age or demographic, it is no secret that the elderly are generally more susceptible. Financial management becomes increasingly challenging with age. Whether it’s fleeting memory or constantly evolving technology, keeping up with all things financial can be difficult.
For those of us with aging parents, taking a proactive approach is important to help ensure mom and dad stay insulated from different forms of financial fraud. Here are a few ways you can contribute.
1. Keep a watchful eye
As you assume a more active role in assisting a parent with their finances, keep an eye out for anything peculiar or out of the ordinary. Remember, identity theft manifests in many different ways. Oddities such as a change in spending habits, unusually large purchases, bounced checks, or wire transfers to suspicious third-parties may be a sign that something is not right.
The elderly may have difficulty noticing these irregularities, however, because judgement, as well as the ability to distinguish between real and fake, can worsen with age. It often takes a child or someone on the outside to identify discrepancies and other signs of financial fraud.
By playing an active role and keeping the best interests of mom and dad front and center, you can help to catch and put an end to financial fraud before it becomes a larger problem.
2. Implement best practices
There are many mechanisms and tools available to help combat identity theft and financial fraud, but those tools are not always utilized. According to a recent Morgan Stanley poll, 74 percent of the older investors surveyed indicated that they were taking the necessary steps to protect themselves, but only 24 percent subscribed to credit monitoring services.
Work with your parents to implement a few fraud prevention tactics. Start by ordering their free credit report a few times every year. This is a great way to scan for discrepancies and hopefully put an end to any fraud before it truly harms their credit score. Additionally, consider enrolling them in some form of credit monitoring, which can send notifications or place a freeze on credit if fraud is suspected.
You may also consider setting up automatic payments on their regular bills and statements. This way, they don’t have to worry about physically making a payment each month or being duped by scammers seeking payment for a fabricated service.
3. Realize the difficulty of modern technology
While technological advancements have certainly revolutionized our society, they also pose many challenges, especially for those who are not as comfortable with computers and their role in our daily lives. According to the same Morgan Stanley survey, 81 percent of those polled said that modern technology makes it difficult to know how best to protect oneself from identity theft.
Make sure your elderly parents understand how to navigate and surf the web in a safe manner. Discuss the warning signs of different scams, the best way to shop online through legitimate sites, and how to fully logout after a session. The internet can quickly become overwhelming and hackers are always devising new ways to access secure information. Taking some time to walk through the basics can help to decrease overall susceptibility to fraud.
Identity theft and financial fraud can lead to a serious and stressful situation. By taking proactive steps to help protect your parents, you can truly make a difference in the ease of their daily lives and security of their information.
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Barbara Finder is a Senior Vice President and Financial Advisor with the Wealth Management Division of Morgan Stanley in Chicago. The information contained in this column is not a solicitation to purchase or sell investments. Any information presented is general in nature and not intended to provide individually tailored investment advice. The strategies and/or investments referenced may not be suitable for all investors as the appropriateness of a particular investment or strategy will depend on an investor’s individual circumstances and objectives. Investing involves risks and there is always the potential of losing money when you invest. The views expressed herein are those of the author and may not necessarily reflect the views of Morgan Stanley Wealth Management, or its affiliates. Morgan Stanley Smith Barney, LLC, member SIPC.