As people get on in years and perhaps experience cognitive decline, they may become vulnerable to elder financial exploitation: theft or fraud perpetrated by someone they know, even someone close to them. It may be a shady lawyer, accountant, caregiver or family member who drains their bank accounts, keeps their benefits checks or buys extra groceries or merchandise for themselves while running errands on the person’s behalf.
Construct financial guardrails
“So much of elder financial exploitation might be prevented if individuals as they age took matters into their own hands and set up guardrails of protection around their money,” says Marti DeLiema, research assistant professor at the University of Minnesota School of Social Work, and part of the team that created the free Thinking Ahead Roadmap website.
Technology can help construct such guardrails.
Thinking Ahead, cosponsored by the University of Minnesota and AARP, is based in part on in-depth interviews with 27 elder law attorneys, financial advisers, geriatric health professionals, caregivers and older adults themselves. It walks people through the steps of choosing a trusted financial advocate or financial power of attorney who can help organize finances and determine when the time is right to eventually shift money management to that fiduciary.
Prepaid Visa debit card
True Link Financial also tries to nip the problem in the bud, ahead of any potential fraud. For $10 a month, the San Francisco fintech firm supplies a prepaid Visa debit card that enables the cardholder or a family administrator to set limits on where it can be used and curbs how much the user can spend. You can also set limits on ATM withdrawals made with the card. Administrators can receive real-time alerts to track purchases and withdrawal attempts. True Link proactively blocks liquor stores, casinos and predatory merchants.
Of coures, fraud isn’t necessarily restricted to a single financial account. Tech companies such as Carefull and EverSafe offer services that can flag suspicious behavior across multiple accounts, including incidents they say banks often miss.
Carefull, a New York startup, monitors banking and credit card accounts for more than 20 financial “mistakes,” including duplicate transactions, suspect transfers, unusual merchants, late or missed payments, income not received, especially large transactions, changes in credit reports, new or recurring charitable donations, changes in spending, and identity theft.
Caregivers alerted by text or email
The service is aimed at caregivers, who are alerted by email or text if these or other issues are spotted, though an older parent or grandparent may also choose to download the company’s app. The app carries slightly different names depending on your device: Carefull: Guard Seniors’ Money on iOS devices, and Carefull: Protect Older Adults’ Money & Credit on Android.
You can invite other loved ones and finance professionals into a “circle” of people who will also receive alerts. The idea is that everyone will be able to talk through any issues that seem odd — and there might be a perfectly benign explanation for a large transaction, maybe a legitimate one-time purchase of a big-ticket item. A son or daughter may say, “I’m going to call Mom about this purchase.”
As an added protection, members of the inner circle can view financial accounts in Carefull, but not make transactions. The company promises to provide guidance and advice to resolve issues that come up.
“This takes the detective work out of financial caregiving,” says Cameron Huddleston, director of education at Carefull and author of Mom and Dad, We Need to Talk: How to Have Essential Conversations with Your Parents About Their Finances.
That's especially true if users “plan and set things up in advance while you are still mentally competent,” Huddleston says. “If your adult child is seeing what’s going on with your finances while you’re doing fine, it’s going to be so much easier to spot things when you’re not doing well.”
Carefull charges $12.99 a month or $119.99 for an annual subscription. The fee includes credit and identity theft monitoring and identity theft insurance coverage.
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Scammers typically start small
EverSafe, based in Bethesda, Maryland, also looks for signs of erratic financial transactions, from unusual withdrawals to changes in spending patterns. While your bank may flag suspect transactions with their own accounts, “they cannot protect money in a holistic way,” says Liz Loewy, EverSafe’s cofounder and chief operating officer. “My big bank cannot call over to my investment firm even if they see irregular activity to say, 'What investment accounts does she have with you? What’s going there, is there anything irregular happening?’ Bank privacy rules will not allow them to talk to one another.”
Scammers rarely steal huge amounts from a single account, Loewy adds. Instead, they’ll typically start small and if successful will, over time, pilfer larger amounts across accounts and institutions.
EverSafe offers three subscription plans: The $7.49 per month “Essentials” package monitors savings and credit cards and includes a scan of the dark web for suspicious activities. Stepping up to the $14.99 “Plus” plan adds identity theft monitoring, fraud remediation support and credit monitoring. And the $24.99 “Gold” package lets subscribers monitor investment accounts, and detect elder fraud and any asset allocation changes.
You can pay an extra $4.99 a month under any of the plans to monitor real estate holdings for such things as title changes and lien filings. EverSafe also plans to add an optional bill pay service.
Watch historical transactions
As with Carefull, EverSafe can send alerts to both the older adult and a team of folks chosen to keep watch on the person’s finances.
“We will look at historical transactions — what’s regular for [you] and what’s regular across accounts,” Loewy says. For example, you’ll get alerts if the amount on food changes or if a dormant credit card is suddenly used. Age is considered for alerts, too. At 35, people may still be partying and going to the ATM during the wee hours, she says. “Ten years later, 20 years later, that may not be normal for them anymore.”
EverSafe promises to assist customers when issues surface, whether it is a dark web alert or some other kind of scam. “We have lists, we have technology. We have folks who have cybersecurity backgrounds who can help and not just say 'go to the bank, close the account, go get a lawyer,’ ” Loewy says. “I make it all about tech now because the truth is technology can see what the human eye misses.”
Edward C. Baig is a contributing writer who covers technology and other consumer topics. He previously worked for USA Today, BusinessWeek, U.S. News & World Report and Fortune and is the author of Macs for Dummies and the coauthor of iPhone for Dummies and iPad for Dummies.