It's no great secret that I'm a big fan of the Consumer Financial Protection Bureau and its crucial work to help improve our financial literacy and protect us from financial predators. Since I have dedicated much of my career to helping consumers better understand their own finances and credit, and how to protect and restore their identities after personal compromises or data breaches, I'm thrilled to see more Americans getting the help they need from this proactive agency dedicated to many of the same goals.
Recently, the CFPB issued a series of guidelines for people who, like many of my fellow baby boomers, find themselves managing the finances of elderly friends or relatives. When such management involves handling the financial affairs of a parent, a layer of emotional complexity is added to an already-difficult task.
The agency's guidelines are clear and straightforward, reminding financial guardians that their participation, while not easy, is necessary when their loved ones can no longer pay their own bills. But, in particular, they help remind financial guardians of the ways in which scam artists target elderly people by appealing to their trust in authority and playing on their fears that they might be doing something wrong.
Common Red Flags
The CFPB warns guardians that a person who is being scammed might withdraw or try to wire large amounts of money, use an ATM more frequently than usual, be unable to pay common expenses or make large "gifts" to a new friend - all signs that a con artist has convinced a loved one to aid and abet in their own swindling. In other cases, financial statements might stop coming to their house (or to yours), money might go walkabout or a new name might appear on a bank account, all of which could be signs of identity theft.
In some situations, the person for whom you are acting as a financial agent might be able to understand that they are being scammed. But, in others, they might be utterly convinced that they doing the right thing, and will refuse to stop. In a recent case highlighted by WBAY reporter Tammy Elliot, Postal Inspector Steve Bolz said that an alert postal clerk tipped him off to the case of a man who was attempting to send $13,000 in cash to a group of lottery scam artists abroad. He was so convinced sending off the money would guarantee his receipt of millions that, even when his package was stopped and returned by the post office, he tried to send it again. His wife was forced to confiscate the cellphone the scam artists had used to con him and closely monitor their accounts - which couldn't have been easy for her.
Being a Good Guardian
It's not just your elderly charge who could be targeted. Scam artists know that for many financial guardians their duties are a second shift and they might be otherwise distracted by their day jobs, not to mention other things in their lives. The CFPB recommends that you keep thorough records, research all financial decisions you make for your loved one as though you were making them for yourself, and never accept a deal that is "today only" or which requires you to pay up front for a promised prize or award.
Many people step up to act as their parents' (or other loved ones') financial guardians without thinking through the ramifications -- in particular, the serious commitment of time and effort required to manage the finances of a second household. As with anything else in life, if you aren't sure that you're up to the challenge, the best advice is that which the CFPB doesn't offer: don't accept the responsibilities if you can't live up to them. Better you should help your friend or loved one find someone else who can.