Home » News & Events » Prevent Aging Parents From Making Financial Mistakes
by Paulette Perhach for the New York Times
Americans over 70 control $53 trillion in wealth, and they are the prime targets for scams. Their adult children are often the first people to notice when something seems amiss, but when elders are the victims of misdeeds, family dynamics can make it difficult to change their behavior. Experts say it takes empathy, due diligence and sometimes outside help.
It’s not just money that’s at stake, Ms. Gunther, director of the BankSafe Initiative at AARP added: Financial exploitation can cause anxiety, depression, a higher risk of heart attacks and even suicide.
Ms. Gunther said older adults might require the help of grown children and trusted friends to see their financial lives more clearly.
“There’s a relationship between age and financially unsound decision-making,” Ms. Gunther said. “It follows this U-curve. Younger people and older people are more prone to making mistakes.”
Cybercrime against elders is skyrocketing. In 2024, the Federal Bureau of Investigation’s Internet Crime Complaint Center received nearly 150,000 complaints of cyber-enabled fraud against people 60 or older, with almost $5 billion in losses, according to the agency’s annual report. The victims lost an average of $83,000.
Scams can come from investment opportunities, impostors pretending to be the Internal Revenue Service or an online romance.
When you hear something that sounds off, you might react in the moment without thinking, but that would be a mistake, Ms. Gunther said. You want to lead with empathy.
“Coming right out and saying something like, ‘You’ve been scammed’ or ‘This is a horrible decision’ — those are things that are not going to open up the conversation,” she said. “So before writing off their decision as risky or bad, it’s important to do your own research and also to ask questions like, ‘What interests you about this investment? What are you hoping to achieve?’”
Free tools can help with your research. Any company that claims to be publicly traded in the United States should show up on the Securities and Exchange Commission’s Electronic Data Gathering, Analysis and Retrieval System. A financial adviser’s employment history, registrations and regulatory actions are available at the Financial Industry Regulatory Authority’s free BrokerCheck tool. The Consumer Financial Protection Bureau provides a searchable database of complaints about financial products and services. For companies, the Better Business Bureau lists complaints and ratings.
For anyone claiming to have a professional designation, check with the entity that provides that license to confirm that the person has it.
When asking who should be involved in a conversation about fraud, consider which family members talk regularly with the person in question.
“People can also leverage family trust in these types of situations,” Ms. Gunther said, adding that adult children who have maintained open dialogues with their parents are better positioned to influence financial decisions.
In 2024, Rianka Dorsainvil’s mother came to her with a check that looked legitimate. All she had to do was deposit it and then send a money order for a lower amount to a third party, and then she’d be able to keep the difference. It’s a common check fraud scam.
“I was like: ‘Mom, this is not true. This isn’t real,’” said Ms. Dorsainvil, the founder and senior wealth adviser at YGC Wealth. “These scammers are becoming so sophisticated in their tactics.”
People can now be scammed by clicking on a quiz on social media, signing up for a game or responding to a Facebook message that appears to be from a relative, she said.
Ms. Dorsainvil recommends checking if a loved one mentions anything that seems too good to be true. Other red flags include pressure to act fast or guarantees of making money.
If you see something suspicious and want to talk to an elder in your life, Ms. Dorsainvil recommended bringing in a neutral third party so that it doesn’t seem like just your own judgment.
“What I share with my clients, especially when it comes to their parents, is: Blame it on me,” she said.
Ms. Dorsainvil recommended that you acknowledge what they’ve taught you about finances, and then add to that what you’ve learned from financial experts and, if possible, pass them along to someone who can advise them.
“Approach it in an educational manner versus ‘I know more than you now,’” she said, “and I think they will appreciate that.”
Peter Lichtenberg, a former director of the Institute of Gerontology at Wayne State University in Detroit, said financial missteps could be a sign of a deeper issue.
“What we’ve found from some of our focus groups over the years is maybe about one out of every five people discover dementia in their parents because their parents are losing money,” he said. Usually, it takes the form of not remembering that they gave to a cause and sending money again, or falling prey to phone scams.
Signs that dementia may be involved include recent health problems that required hospitalization, increased falls, missed appointments or the repeating of things, like telling the same joke twice in an hour.
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