Preventing Financial Fraud and Scams on Our Elders
If you live near or far away from your parents don’t you wish for a way to protect them from scams???
Help should be a phone call away. Have the code to transfer money sent to you first, then if there is a question about it, you can talk to your parents and verify its legitimacy.
Oh wait. Try that and no institution will do it unless you have complete power of attorney so your parents lose control of their money.
Stopping scams needs the breaking of the money chain between account holder and fraudster. Telling people about scams either before or after the scam has occurred does no good. This especially applies to the elderly suffering from mental decline who will have forgotten the warnings almost at once. Yet, these solutions can work even if you are a young adult facing someone hacking your account by preventing money from going to a hacker.
What Hasn’t Worked
Legislation
There exist many organizations, committees, and agencies dedicated to stopping fraud/scams. The House of Representatives currently passed the 117th Congress (2021-2022): Fraud and scam Reduction Act
https://www.congress.gov/bill/117th-congress/house-bill/1215
This is a classic example of an expansion of what has not worked so far.
Anti-Fraud Warnings
There are also businesses making lots of money telling you not to get scammed or to try to help you recover your losses. However, they do not deal with the reality that we do not make logical choices as we age and need a little help BEFORE we follow through on a scam.
No Stopgaps to Prevent Fraud
There is currently nothing in place to PREVENT scams from happening and no aid for those in declining capacity or their caregivers. We all have parents we will have to care for, but they do not want to lose control of their finances. Yet they write a check to a scammer and there is no system for us to help with irrational decisions.
Proposed Solution
All financial institutions would have to supply a method to lock down an account if a requested transfer is over an amount set by the account holder.
The lock down would be removed by entering a code sent by the financial institution to a designated trusted advisor who then contacts the account holder and verifies the legitimacy of the request. Once the legitimacy of the transaction is verified, the trusted advisor gives the code to the account holder allowing the transfer.
When that code is received and entered by the account holder the funds would be released.
A trusted advisor can never access the account and can do nothing within the account.
If an account were somehow hacked, say by a family caretaker, any changes of contacts or phone numbers or attaching new accounts would trigger notification to the account holder, the designated trusted advisor and an optional third party.
Currently, if you request notification be sent to a trusted advisor financial institutions will not do it.
They will say no one has ever asked for this before. Existing law supplies no practical interventions other than granting complete Power of Attorney. This would result in an account owner’s loss of control of their account.
Financial institutions already have computerized systems that can do things like institute credit freezes, systems that search for fraud, and notify account holders of suspected fraud. It thus requires little additional technology or effort, yet would save the financial institutions money in time and effort. More importantly, it would provide additional security for all people, but most especially our elders, in preventing fraud/scams.
Changing the existing laws and institutional resistance will only occur if it is demanded by all of us.
How To Advocate for Change
People, including Politicians, follow the basic rule that says it is easier to do nothing. They will do nothing unless there is something in it for them. If they receive enough requests, they will perceive the benefit for action being taken.
This requires you to contact and demand that your senator, representative and any government organization controlling financial institutions to implement this system.
Preventing Financial Fraud 