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Protect Elderly Parents’ Finances from Scams and Exploitation

Cameron Huddleston talks about how to protect elderly parents' finances.

As you watch your parents get older, it’s easy to begin to worry about them falling for scams or being taken advantage of financially. After all, older adults are common targets for scams and financial exploitation. If they are showing signs of memory loss or have been diagnosed with dementia or Alzheimer’s disease, it’s even more essential to protect elderly parents’ finances. But there are some things you can do to help.


See 15 Ways to Prevent Financial Exploitation with Cameron Huddleston for a complete transcript of the Easy Prey podcast episode.

Cameron Huddleston has been a personal finance journalist for twenty years, and her work has appeared in publications that include Forbes, Kiplinger’s, and the Chicago Tribune. She is also the Director of Education and Content at Carefull, the first service built to protect and monitor aging adults’ daily finances.

Cameron’s Story

In 2008, Cameron’s mother was diagnosed with Alzheimer’s. She was 65 years old. Cameron was 35 and had young children at home, but she became her mother’s primary caretaker. Her mother lived with her family for nearly thirteen years. The experience prompted Cameron to write a book: Mom and Dad, We Need to Talk: How to Have Essential Conversations With Your Parents About Their Finances.

Cameron hadn’t had any conversations with her mother about her finances. When her mother could no longer remember, Cameron was stuck playing detective. She had to scramble to find all the information and make sure everything was managed. If she had talked to her mother before her memory loss started, everything would have been much easier. She wants people to realize that we need to have those conversations, sooner rather than later. And most of the time, they’re not nearly as scary as you might think.

Protect Elderly Parents’ Finances from Scams

They are targeting older adults because they see them as easy prey.

Cameron Huddleston

Talking to your parents about scams is a great way to open the door to other financial conversations. Older adults are common targets for scams, but scammers really go after everyone. Open the conversation with an example you’ve experienced. Maybe you received a scam phone call, or received a phishing email or text.

Start the conversation by saying something like, “I got a call the other day from someone claiming to be the IRS. They said I owe back taxes and I have to pay them in gift cards or they’re sending the police to arrest me.” Whatever your example is, tell your parents about it and ask if they’ve received anything similar. Tell them you want them to know it’s a scam.

Warn your parents about these red flags because there’s no way you can keep them up-to-date with every new scam that’s out there.

Cameron Huddleston

You can help protect elderly parents’ finances from scams by letting them know what to watch out for. Especially if your parents aren’t very tech-savvy, they may not know the warning signs. Warn them that someone asking them to pay with a wire transfer or gift cards is a scammer. Let them know that government agencies like the IRS communicate by mail – they never call. Tell them that if they get an email that says to click a link, even if it looks real, don’t click it and instead call the organization the email is from.

Help Them Avoid Scams Altogether

One way to protect elderly parents’ finances is to warn them about signs of scams. But Cameron thinks a better approach is to tell them not to answer the phone at all. Let it go to voicemail, and then they can listen to the voicemail and decide if they should call back. Most of the time, scammers don’t bother to leave a voicemail.

A better approach is to tell your parents, don’t answer the phone. Let all calls go to voicemail. Then they can listen to the voicemail and decide if they should return this call.

Cameron Huddleston

If the voicemail is from their bank or something else important, advise them to call directly. They shouldn’t ever call the number left on the voicemail. Sometimes your parents may think that it’s safe to pick up the phone because it’s a number from a local area code. Explain to them that scammers can spoof numbers, so they should let it go to voicemail anyway.

If they are starting to experience memory loss, you can put notes on the kitchen cabinet, on the refrigerator, or by the phone so they don’t remember. It’s not a perfect solution in every circumstance, but you could even set it up so that every call from a number not in their contacts goes straight to voicemail.

Keep Communication Open About Scams

An important step to protect elderly parents’ finances is to keep the communication open between them and you. Have open conversations about it. You need your parents to be comfortable coming to you if they get a strange email or phone call. If they don’t feel comfortable talking to you about it, they might give scammers money. Then they feel embarrassed for falling for a scam, and the problem just gets worse.

Talk To Your Parents About Their Finances

It’s important for you to have a general understanding of your parents’ finances if you want to be able to protect them. Having conversations is a great way to protect elderly parents’ finances from financial exploitation.

As we age, we all experience some cognitive decline. Not all of us will end up with Alzheimer’s or dementia, but there will be some decline nonetheless. That includes a decline in our ability to manage our finances and make informed decisions about our money.

If your parents are still relatively young and able to make decisions, talk to them. Don’t wait for memory loss to set in before you have the conversations. Try to get a general idea of where they are financially. What do they have for assets? Do they have any debts? What are their sources of income? You don’t need exact amounts owed or precise bank balances. You just need an idea of where they are and how they’re doing.

Talking to them before they experience memory loss can help you protect elderly parents' finances.

Notice Changes for Early Intervention

If you recognize changes in financial habits, you can protect elderly parents’ finances by stepping in before things go to far. When you know that your mom always pays the bills on time, you can realize the pile of past due notices on the kitchen table is a warning sign. If your father is usually scrupulous about sticking to the budget but is suddenly writing checks to anyone asking for money, you can identify that behavior as a red flag.

Getting a good idea of where [your parents] are now financially is going to help you be aware of changes in their financial behavior as they age.

Cameron Huddleston

Tips for Having Conversations

You may worry that your parents will think you’re trying to take over their money while they are still of perfectly sound mind. Let them know that you’re looking out for their best interest. It’s hard to protect elderly parents’ finances if you don’t know the situation. You just want to be informed so you can help if they need it. If something happens, knowing what they want will help you follow through and make financial decisions they would approve of.

This conversation doesn’t have to happen all at once. It can be a series of conversations. Don’t grill your parents, and remember that you don’t need details or exact numbers right now. You’re just trying to get a general understanding. It won’t be fun for any of you, but it is necessary.

Protect Elderly Parents’ Finances from Caretakers

Older adults are more likely to be exploited by someone they know – a family member, a friend, or a paid caregiver. If your parent is alone at home with a caregiver, take all important documents out of the house. Social Security cards, credit cards, anything that could be used to spend your parent’s money or steal their identity should go to a safe place somewhere else. If the caregiver needs to run errands for your parent, give them cash or a prepaid credit card.

Check in on your parent as much as you can. If you think it’s necessary, you could put a camera in the house. Call them regularly. If you live nearby, stop in for regular visits. If you live far away and can’t visit, have a family friend or neighbor check in. You don’t want your parents to be isolated. If the only person they talk to is the caregiver and the caregiver is manipulating them, soon you’ll start calling and the caregiver will tell you “Your mom can’t come to the phone right now.” You’ll get the update from them and never know what’s really going on.

You’ve got to stay in communication with your parents, check on them regularly, or have someone else who’s checking in on them.

Cameron Huddleston

If the caregiver isn’t letting you talk to your parent, that’s a huge red flag. If you do talk to your parent and they say things like, “I don’t think you love me anymore, my caregiver is the only one who cares for me,” that’s also a warning sign. The caregiver may be manipulating your parent. However, dementia can also come with paranoia. Even if the caregiver isn’t manipulating them, your parent might feel like you abandoned them since you’re not their primary caregiver.

Protect Elderly Parents’ Finances from People Soliciting Donations

This was a big issue with Cameron’s mother. After being diagnosed with Alzheimer’s, she still lived on her own for a while. She wrote checks to every organization that asked for money. All they had to do was call or write a letter, and she would send them money.

Cameron visited frequently, and they would go through her mother’s mail together. That’s how she found out her mother was giving so much money away. She saw lots of requests from various organizations in the mail. If they’re receiving requests for money, that likely means your parent already gave some money. They got put on a list of people who give, so they get even more requests. The little gifts charities often send – like calendars, pens, and stationary – are more red flags.

Talk About Giving Priorities

You can help protect elderly parents’ finances from this pitfall by talking to them. Ask about their giving priorities and what organizations they care about. Make a list and draw up a budget. Say they want to give money to the Humane Society. You look at their income together and determine they will give $100 per year to the Humane Society. Put it on the list: Humane Society, $100/year. Then post the list by the phone or computer or on the fridge. When they make the donation, have them mark the date on the list to keep track of it.

Then give them a script to say no to anyone else asking for donations. Older adults often don’t want to hang up on people. If you give them a polite way to say no, they can hang up without feeling bad. Cameron recommends something like, “I’m sorry, I’ve already given to the organizations that are most important to me. I don’t have it in my budget to give to you this year.”

If it’s getting out of hand, you may need to take their checkbook and credit card. Don’t just say that they’re giving too much so you’re taking their checkbook and cards away. Give them a prepaid card to limit the potential damage and tell them it’s a better or safer option.

Essential Documents to Protect Elderly Parents’ Finances

When having conversations with your parents about their finances, bring up these documents. These legal documents help protect them and make sure things can be managed if anything happens. They are essential for everyone, but especially aging people. Making sure your parents have these documents is the first step to protect them from financial exploitation.

Making sure they have important documents in place can help you protect elderly parents' finances.

Will or Trust

This is the most well-known of these essential documents. A will or trust designates what will happen to their assets when they pass away.

Durable Power of Attorney

This is the most important document to protect elderly parents’ finances. A general durable power of attorney lets your parents designate someone to make financial decisions for them if they can’t. Making it a durable power of attorney instead of a regular power of attorney means it stays in effect if they become mentally incapacitated.

Your parents may not want to give someone that much power right away. That’s fine. The designated person can’t call up the bank and say, “I have power of attorney, let me do this.” They need the actual document to do anything. Your parents can get the document, tell the designated person they are designated, and then put the document away in a safe place. But they should let the designated person know where the document is and in what circumstances they can access it.

Medical Power of Attorney

This is similar to a durable power of attorney, except instead of designating someone to make financial decisions, it designates someone to make medical decisions if they can’t.

Living Will

Also known as an advance directive, this document spells out end-of-life medical care. It lets your parents choose in advance which life-extending procedures they do or don’t want. You don’t want to have to decide whether to keep them on life support or not – with a living will, it can be their decision. The person designated as medical power of attorney should know these wishes, but it’s important to have them in writing, too. It helps the doctors know what your parents want, and avoids family members fighting in court about whether to keep a parent on life support.

Using Power of Attorney to Protect Elderly Parents’ Finances

If your aging parent’s mental state is starting to decline, you can use durable power of attorney to monitor their finances. It gives you access to their bank accounts, credit card accounts, and retirement accounts. Watch for unusual transactions. If you can, set up alerts so you’re notified.

Freeze your parent’s credit so they can’t open new accounts (and nobody can open accounts in their name). Sign them up for credit monitoring and identity monitoring so you are alerted if their credit report changes.

Carefull is an account monitoring service that also includes credit and identity monitoring. You can sign your parents up for the service and link their financial accounts. It monitors things that banks do, like low account balance. It also watches for duplicate payments, late or missed bill payments, unusually large transactions, and expected income not deposited. When it detects unusual transactions or money mistakes, it sends you an alert.

If your parents are still independent, they can sign up for Carefull themselves. That also gives them the ability to add you as a trusted contact and decide how much access you can have.

When Decision-Making Is Impacted

For a while, Cameron thought her mother was still fine on her own. Cameron had taken the car keys, but people came by to take her on errands and keep her company. One day, her mother got a call that she had won a sweepstakes and needed to wire some money to claim the prize. She called Cameron’s uncle to ask how to wire money. The uncle called Cameron.

Cameron went over to her mother’s house, and had to stay there all day to keep her from calling the scammer back and wiring money. There was no reasoning with her. She was convinced she’d won a prize and had to wire the money. Her financial decision-making was impacted by Alzheimer’s. At that point, Cameron realized her mother couldn’t live alone anymore.

Making Difficult Decisions

Being able to protect elderly parents’ finances is important as they age. You want to keep them as independent as possible, but you also want to keep them safe from scams and exploitation. Reminding them of what to watch out for and putting up notes to help them remember can work to a point. But especially if they have dementia or Alzheimer’s, it will get to a point where notes don’t help.

There does come a point where your loved one with dementia can no longer be trusted to be alone for their own physical and financial safety.

Cameron Huddleston

It’s a difficult decision to make. But if you love your parents, you have to protect them. You don’t just have to protect elderly parents’ finances, but also their physical safety. If you can, have those conversations with your parents so you can make decisions in line with what they want. If they don’t want to give you the details, ask them to put it in writing and tell you where to find it when you need to. Then when the worst happens, you can access the information and protect their finances and safety.

For resources to help with these situations, visit cameronhuddleston.com. There, you can download and print an In Case of Emergency Organizer and a Scam Red Flag sheet, as well as read helpful articles. There are also resources available at getcarefull.com on protecting yourself and your finances as an older adult and how to protect parents’ finances as a caregiver. You can find Cameron on Instagram @cameronkhuddleston and Carefull on Twitter @getcarefull, on Instagram @getcarefull, and on Facebook.

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