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Are money scams hurting your aging relative's bank account?

Financial exploitation costs older Americans $2.9 billion annually, according to the federal government. More than one in 20 older adults report that they have been victims recently; but only one in 44 cases of financial abuse is ever reported, according to the National Adult Protective Services Association.

Of course, most senior adults are fully capable of managing financial affairs on their own. But they can be more vulnerable to financial fraud if they experience even mild cognitive impairment, which affects good judgment and becomes fairly common by the time people reach their 70s, according to the Center for Retirement Research at Boston College.

How can you help protect your aging relatives and their finances? Start by simply increasing your awareness.

Here are four warning signs:

1. Trusting everyoneImagine that your parent received a phone call or a letter explaining that they had won a large sum of money and they must send a wire transfer to cover costs before receiving their prize.

Would he or she fall for it? Possibly.

Sometimes, a fraudster may call claiming that a grandchild or nephew is in jail and needs a credit card number to post bail. Scammers also send encrypted links via email or compromised social media accounts. When the unsuspecting victim clicks on the link, “the bad guys" have access to a variety of personal and financial information, said Jason Glassberg, cyber security expert and co-founder of Seattle-based Casaba Security.

If your parent tends to be too trusting, or if he or she is relatively new to using the Internet, consider having a conversation about potential dangers. Be sure to offer suggestions for how to politely refuse a phone call or avoid clicking on a questionable link.

For instance, if the link appears to be from a Facebook friend, you can simply call or email the friend and ask, “Did you send me this? If not, your account may have been hacked."

2. Changes in appearance, surroundings or attitude.

If your relative suddenly appears unkempt or seems anxious or depressed, there may be a problem. A high percentage of reported financial abuse of seniors takes place at the hands of a trusted caregiver. And if your relative's caregiver is taking advantage of her financially, the caregiver is unlikely to be providing efficient care in other ways.

"If your parent is in a care facility, visit at different times of day and make sure you can always get in touch with them," said Martha Bedoy, investigation loss prevention manager at City National Bank.

“If they're living at home, check out any service providers that help them, such as cleaning services. Stop by the house and make sure nothing's missing and that the groceries being purchased make sense for the household; sometimes caregivers will purchase groceries for themselves as well. Also, just ask your parent how they are feeling and if there's anything worrying them," she said.

3. Use of outdated software. Savvy Internet users know to delete questionable emails or install virus protection programs to keep out harmful malware.

But many older adults using the Internet may be less experienced and more susceptible to fraud, said Glassberg, whose own 77-year-old mother “is just Internet-savvy enough to get into trouble all the time."

If your older parents use the Internet, talk to them about phishing emails, such as those that appear to come from a bank or the IRS and ask for users to click on a link, which is usually encrypted, or to send their financial information.

“I tell my mother that there is no legitimate financial institution that would randomly send you an email and ask for your information," Glassberg said. “If you're not sure, call the bank or the credit card company. Never send information in response to an email."

In addition to email awareness, using updated software—especially the latest versions of browser and operating system—is the most important way to protect against online financial fraud, Glassberg added.

“My mom resists updating her machine; she thinks, 'It's working, so why update?'" he said. “So when she comes to visit, I take time to update all her software and make sure she's running the latest versions of everything."

4. Spending or banking habits change drastically. Sometimes changes in banking patterns can alert bankers and family members to the possibility of financial fraud against an older person.

“Family members should be alert for warning signs, such as older adults who have uncharacteristic activity on their accounts, such as overdrafts, many ATM withdrawals, wiring money or closing accounts," said Holly Fujimoto, who manages risk for City National Bank's branch network. “All of these can point to potential financial abuse by a caregiver, family member or even a stranger."

It's a good idea for an adult child or relative to look over the senior's bank statement each month to make sure it looks right, Bedoy said. If bank statements, checkbooks or mail seems to be missing, that could be another warning sign.

Financial fraud is rampant, so it's not far-fetched to be concerned that your aging relative could become a victim. Tap into community resources that draw on financial institutions, adult protective services and law enforcement to help protect seniors from financial exploitation.

While he may still be able to manage his finances, respectfully keeping an eye out for red flags can be an important way to help care for him.

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