Dec 11, 2024
Fraudsters are preying on America’s seniors at staggering rates, with older Americans losing a whopping $1.9 billion to fraud in 2023, according to the Federal Trade Commission. Among the victims is Iowa resident Kelly’s 73-year-old mother-in-law, whose losses led to dramatic changes for the entire family.
On a recent episode of The Ramsey Show, Kelly explained how her mother-in-law lost $150,000 to credit card fraud over a span of nine months. Shocked by the magnitude of the losses, she and her husband decided to intervene by freezing her credit and purchasing a larger home so they could all live together to help.
Advertisement
However, this move has received backlash.
“She has become very angry, very demanding and, I hate to say, even almost entitled about the new home and it has just been giving me all sorts of red flags,” Kelly said, during a phone interview. “She admitted that part of why she is recently very angry with us is because we have had to take over her finances because she continually was making poor choices.”
Co-hosts Rachel Cruze and Jon Delony suggested Kelly may have overstepped a boundary in her well-intentioned effort to help. Here’s why.
Financially reckless, but not mentally unstable
Kelly’s mother-in-law has displayed a level of financial recklessness that the family can no longer ignore. Unbeknownst to them, she managed to apply for eight credit cards, all of which now carry fraudulent charges.
“The home that we downsized her to is in our name, and thank goodness because we are pretty confident that the person scamming her would have convinced her to get a second mortgage on the property,” Kelly said.
Seniors are frequent targets of scams because fraudsters believe they are more trusting and tend to have larger retirement accounts that can be easily accessed, according to the National Council on Aging. However, many are also targeted because of their cognitive decline.
Research from Columbia University shows that at least 10% of U.S. adults over 65 have dementia, while another 22% have mild cognitive impairment. Under these circumstances, families often establish a legal power of attorney (LPA) to manage finances when a senior’s cognitive abilities decline, according to the Alzheimer's Association.
Advertisement
Despite her financial missteps, Kelly’s mother-in-law has shown no signs of mental incapacity.
Must Read
- Dave Ramsey warns nearly 50% of Americans are making 1 big Social Security mistake — here’s what it is and the simple steps to fix it ASAP
- Robert Kiyosaki begs investors not to miss this ‘explosion’ — says this 1 asset will surge 400% in a year
- Vanguard reveals what could be coming for U.S. stocks, and it’s raising alarm bells for retirees. Here’s why and how to protect yourself
Join 250,000+ readers and get Moneywise’s best stories and exclusive interviews first — clear insights curated and delivered weekly. Subscribe now.
Gently parenting your parents
Bad decisions aside, Cruze and Delony said Kelly’s mother-in-law is entitled to maintain control over her own finances.
“I don’t want you guys to have this level of parenting over a 73-year-old who mentally is stable,” Cruze said. “She's fallen for scams but it's not because … she has some mental decline. She's a 73-year-old who doesn't make wise decisions and there's only to a point that you guys can control that.”
Delony agreed, adding, “She’s an adult” and that “no adult likes that kind of help.”
Rather than seizing control over her finances, Cruze and Delony suggested that Kelly and her husband could take time to communicate openly with her about their concerns; educate her on common scams and tactics fraudsters use; set up spending guidelines and limits and enable digital safeguards, such as two-factor authentication.
Additionally, they recommended frequent reviews of her financial statements and contacting her bank or the FTC promptly if fraud occurs again. These steps could limit future losses while allowing Kelly’s mother-in-law to enjoy her autonomy.
You May Also Like
- Turning 50 with $0 saved for retirement? Most people don’t realize they’re actually just entering their prime earning decade. Here are 6 ways to catch up fast
- This 20-year-old lotto winner refused $1M in cash and chose $1,000/week for life. Now she’s getting slammed for it. Which option would you pick?
- Warren Buffett used these 8 repeatable money rules to turn $9,800 into a $150B fortune. Start using them today to get rich (and stay rich)
- Here are 5 easy ways to own multiple properties like Bezos and Beyoncé. You can start with $10 (and no, you don’t have to manage a single thing)
Vishesh Raisinghani is a financial journalist covering personal finance, investing and the global economy. He's also the founder of Sharpe Ascension Inc., a content marketing agency focused on investment firms. His work has appeared in Moneywise, Yahoo Finance!, Motley Fool, Seeking Alpha, Mergers & Acquisitions Magazine and Piggybank.
