How Can You Help Prevent Your Elderly Parent From Falling Victim To Wire Fraud?

Although charlatans have been a part of society since the beginning of recorded history, only recently have there been ways for these scam artists to access money or identifying information with the touch of a key -- or for an unwitting victim to be able to wire money or make an online transfer without even leaving their home. If you have an elderly parent who lives on his or her own, you may be concerned about the risk that your parent will fall victim to one of these scams. What should you tell your parent to be particularly wary of, and what can you do to protect him or her from becoming a scam victim while still allowing financial independence? Read on about some of the more recent scam tactics, as well as how you can arm your parent with the tools to combat fraud.

What types of wire fraud are most common among seniors?

Unfortunately, due to the slight but natural decline in cognitive abilities in certain parts of the brain that come with age, seniors are especially vulnerable to certain types of scams. One common scam used to target seniors requires the fraudster to do some online research into your family tree or even look at an obituary that lists surviving family members. This person will then take on the name and persona of one of your parent's children or grandchildren, then set up a dummy email account or call your parent (using a muffled voice) and pretend to be stranded in a far-away city or country and in need of immediate cash to get home. Although some seniors will see right through this scam, those who have grandchildren in college several states away may allow their panic or desire to help override any red flags that may come up.

Another scam your parent may stumble across is the "tax on prize winnings" scam. These are commonly targeted toward all age groups, but involve telling the potential victim that he or she has won a prize but will be required to pay taxes (or sometimes shipping) before it can be mailed out. Of course, once the scam artist receives your parent's "tax" or "shipping" money, he or she is long gone. 

What can you do to ensure your parent is protected against wire fraud?

It can be worthwhile to review some of the more common types of wire fraud with your parent. Simply knowing that these tactics are out there can encourage your parent to more closely evaluate any requests for money (or at least double check with you or the grandchild's other parent before sending cash).

You may also want to talk your parent into granting you a durable power of attorney (POA). This legal document can grant you the right to make medical or financial decisions on your parent's behalf if he or she becomes incapacitated and is unable to make these decisions alone. Although you won't be able to make decisions for your parent until he or she is incapacitated or agrees to cede control, having this document in place can help you legally step in if you fear for your parent's financial security.