Here’s what seniors should do to protect their finances

Fraud or theft of money, property, or valuable personal information affects millions of senior citizens every year. On average, senior citizens get fleeced to the tune of $120,000 each time that happens, too.

And the pickpocket who’s taking that $120k could be anyone – a rogue “financial advisor,” a caregiver, even a grandchild who thinks that they can quietly help themselves to grandma’s bank account without Granny ever knowing it.

With the age of the average American growing older by the year, and scammers going after seniors harder than ever, the Federal Deposit Insurance Corporation (FDIC) thinks it’s time to warn anyone who’s thinking about how to navigate the world of financial planning and how they can safely hold on to their money without regretting that bad “sure thing” mistake.

The warning signs flashing the brightest

The biggest concern the agency has is with all the pseudo “advisors” it’s hearing about. If you’re thinking about doing anything “financial” – hiring an attorney to create a trust, a broker who can set up a consistent drip off of your 401(k), or anything else that deals with money – you should independently look into that person’s background and reputation before investing money or paying for services. 

You can confirm, for example, that the individual has a good reputation with regulators and other consumers. If you are unsure how to research this information, contact your state Attorney General’s Office or local consumer protection agency. Here’s a list of those State Attorney Generals so you can find the Attorney General of your state.

You’re likely to have questions, so don’t be afraid to ask ’em.  If someone starts throwing around terms you don’t understand – like a “swap” and a “derivative contract” – then by all means, raise your hand. Not asking questions at the risk of looking dumb is dumb. After all, it is your money!

Another “be careful who you trust” moment is when you grant a power of attorney. At some stage of everyone’s life, they’ll have to deal with a power of attorney – someone they’ll give their authorization to to do business on their behalf. One wrong choice and your accounts could be picked apart or drained completely. Even worse, they could borrow money in your name and you (or your estate) would be on the hook to pay it back.

Hold on to your personal financial information with your life. “Never give out your bank account numbers, Social Security numbers, personal identification numbers (PINs), passwords, or other sensitive information unless you initiate the contact,” the FDIC said. “These requests may come from an unsolicited phone call, text letter, email, or a person who shows up at your door.” 

Unfortunately, there’s a host of these scams out there. It could be someone who congratulates you about winning a prize or lottery but first demands payment for taxes or fees.

It could be a home warranty scam. It could be a fake check. It could be anything, so keep your financial information to yourself, your checkbook, account statements, and other sensitive information in a safe place, and shred paper documents containing sensitive information that is not needed long term. 

Be aware of scams involving reverse mortgages. The FDIC says these types of scams are hot right now. These so-called “loans” look pretty good on paper or TV, but they are extremely complex and loaded with gotchas.

For guidance on the responsible use of a reverse mortgage, including how to locate a lender or an approved housing counselor, you should coonsider the U.S. Department of Housing and Urban Development Home Equity Conversion Mortgages for Seniors before you sign on the dotted line. Another place where you could bone up on reverse mortgages is this ConsumerAffairs guide.

Stay on top of your credit card and bank account activity. When you get your credit card statement, look at every little detail. Go to your bank and have it help you set up the app that monitors what’s going on there, too.

It’s especially important these days to set up alerts with low dollar thresholds because many times a fraudster will ding an account with a low amount – say $5 – to see if they’ve got some wiggle room to try and steal more. If you set the threshold at $100 or so, you’re allowing them too much freedom.

A credit freeze is free and a good idea

Review your credit report, then freeze it if it’s good. Another option to stay on top of your finances is getting your free annual credit report. The FDIC advises that you check a different one every four months to spread it throughout the year, like January, May and September.

Once you get yours, make sure it’s got everything accurate and, if it’s not, ask that the issues be fixed, the addresses or people connected be corrected, anything that looks suspicious, etc. Then, consider freezing your credit report at each of the three agencies. That way, no one can set up a financial, bank or credit card account in your name.

Don’t take every call, don’t answer every email. Get yourself some sort of “call screener” (like this one from Google) or “robocall” app and don’t answer anyone from any number you or your phone doesn’t recognize. Same with emails. If “Microsoft” or “UPS” or whoever emails you, contact the official company email, found on its website, instead of responding via email. And sure as heck, don’t respond if someone says it’s an “urgent” or “emergency” matter.