6 Tips that Can Help Prevent Elder Fraud

You can put these into action immediately

Nobody thinks they will be the victim of fraud, but it happens every day – even to the smartest people. This is why it is always important to be vigilant when it comes to anything involving money. Scammers will never stop scamming, but we don’t have to play into their hands.

Seniors, in particular, have to be aware of the many ways criminals will try to get their money. For people in this age group or those who want to protect parents or grandparents, these tips can help:

Have a discussion

For a lot of folks, money is still kind of a taboo topic, which makes talking about it uncomfortable. But this can be a big mistake. For example, if for some reason you were unable to make decisions regarding your finances, what would happen? Does somebody know about your accounts and investments and how to access this information? Having a conversation about finances can also inform family members about the advisors or money managers you may be working with – and need to keep an eye on.

Think about streamlining things

It’s possible that over the years, numerous accounts have been opened or different firms or brokers have been hired to handle investments. If staying on top of finances is difficult, it may be hard to detect any sort of fraud. This is why it’s a good idea to consolidate accounts as much as possible to help better manage them.

Pay attention to account security

Whatever accounts you or a family member have, make sure that all security features are activated. This should include requiring two-step authentication in order to access an account and receiving electronic notifications about possible fraud. Another good tactic is to stop receiving any paper statements by mail, as these could be stolen.

Stay informed

Crooks are always devising new ways to get their hands on people’s money, so it’s a good idea to learn about common schemes and any new ones that pop up. For instance, telemarketing scams have been around for decades, but thanks to the Internet, scammers are just as likely now to target people through websites or email phishing.

Know how money is being used

When it comes to their money, many people take a passive approach. They hire some sort of fiduciary and count on him or her to make the best decisions. Unfortunately, however, broker fraud is a possibility. In some cases, brokers or other financial advisors rely on the trust they have built up with their clients to take advantage of them.

Making trades just to earn extra commissions (churning) is one potential violation of financial industry regulations. This is why it is important to always look carefully at monthly statements and what a financial professional is doing.

Knowing exactly who’s managing the money is also essential, which is why the Financial Industry Regulatory Authority (FINRA) created BrokerCheck, which chronicles the history of all registered brokers. A search at this resource can let you know if any broker you are working with has violated FINRA rules or been the subject of customer disputes.

Add an additional layer of protection with a trusted contact

Another way FINRA is looking out for elderly investors is with a recent update to one of their rules. Rule 4512 now mandates that brokers have to make an effort to get information from their clients about trusted contacts. These are people who brokers can contact in the event that fraud or exploitation is suspected.

Take action

The majority of elder fraud isn’t reported, which is why if you suspect foul play, you need to do something about it. Talking to an experienced elder financial fraud law firm is a good first step. At the Silver Law Group, we have a team of forensic accountants that can analyze your portfolio to uncover evidence of fraud. And you may be able to recover losses through securities arbitration or other legal means.

Call us toll-free at 1-800-975-4345 or contact us through our online form to get started.