How to protect parents from elder fraud

Older Americans face an increasing risk of losing their resources to fraudsters. After a lifetime of receiving support and assistance from your parents, it may be time to start thinking of how you can help protect them—and their assets—from elder fraud as they age.

Protecting your parents from fraud can potentially save your family from financial hardship. As an example, let's say Susan received a panicked call from her elderly mother about a utility account that was behind on payments by $1,500. Susan's mother asked her for a ride to the convenience store so she could buy gift cards to settle the debt immediately. After quickly contacting her mother's utility company directly, Susan discovered that the so-called debt was fake and part of a larger scam targeting older adults. Without help, her mother could have lost significant funds to the fraudsters posing as her utility company.

Why elder fraud is on the rise

Unfortunately, stories like Susan's are becoming more common. According to a 2024 Federal Trade Commission report, older adults reported losing more than $2.3 billion to fraud—up from $1.9 billion in 2023. Several factors are driving this increase in elder fraud—including a rise in the number of older Americans, a higher reliance on technology for essential financial services and more innovative criminal tactics. Plus, with large retirement accounts and accumulated savings, seniors often have the most to lose—making them an enticing target.

"Older people are particularly impacted by fraud because they don't have the time to make up for losses that younger generations do," says Nerre Shuriah, Senior Director of Wealth Planning and Knowledge at First Citizens. "They also may not be able to fend off scams as easily if they're using dated methods of payment and communication that are more susceptible to impersonation—like writing checks or taking calls on a landline without caller ID."

As fraudsters' methods continue to evolve, however, there are practical actions you can take to enhance your parents' financial security.

What are early warning signs for elder scams?

Mild cognitive impairment may affect older adults long before a dementia or Alzheimer's diagnosis. It can include increased forgetfulness, trouble recalling words or misplacing things. While these symptoms may not require constant supervision, they signal the need for added financial safeguards from family members.

Shuriah experienced this firsthand when she was on a cruise with her family. Her mother forgot where she'd hidden her purse in her cabin, thought it was stolen and became afraid to leave the room and find her family.

"That really hit home for me," she says. "I called my sister and said we needed to get on top of things."

The risk of dementia increases sharply with age. A recent National Health Statistics Report (PDF) indicates that about 1 in 25 adults 65 or older has a diagnosed form of dementia, rising to roughly 1 in 8 among those 85 and older.

When should I start talking about protecting my parents' assets?

Effective elder fraud prevention starts with early action. The sooner you talk to aging parents about protecting their assets—ideally well before they start to experience cognitive decline—the better prepared they'll be.

Early conversations give them time to adjust to the idea of accepting help from you or others and allow you to start slowly with limited oversight. Ultimately, you'll want to ensure they understand how and why you may need to step in and discuss ways to work together to protect their assets.

These discussions may feel awkward at first. It can be helpful to start by sharing recent examples of scams targeting seniors or by explaining steps you're taking to protect your own financial accounts.

What legal documents protect seniors from financial fraud?

Many estate planning best practices can also help protect your parents' assets from scammers. Having a durable power of attorney, for example, allows you to jump in and make or approve financial decisions for your parents if they can't do so themselves. It's also important to know your parents' account names and passwords, as well as how you can access them in an emergency.

You may also consider retitling your parents' assets to provide better protection. When property or accounts have unclear or outdated titles, thieves may have a better opportunity to create a fraudulent contract or sell or use property without authority. However, proceed with caution because adding your name to a title could result in unintended tax and other consequences.

What are the most common scams targeting seniors?

Criminals continue to find new ways to separate older Americans from their money. Here are some tactics frequently used by scammers that you should put on your parents' radar.

• Romance fraud: Fraudsters pretend to be a love interest to build trust before asking for financial help.
• Government impersonations: Criminals claim to be a representative of a government agency like the IRS and demand payment. Note that government agencies will never call, text, email or message on social media to ask for money or personal information.
• Loved-one impersonations: Scammers pretend to be a grandchild or other family member facing financial trouble who needs immediate help.
• Bank imposters: Fraudsters pose as representatives of financial institutions to solicit sensitive information.
• Phishing emails: Scammers design emails to look like they're from a familiar institution but include unsafe links or harmful file attachments.
• Fake inheritance, lottery or prizes: Fraudsters reach out via phone or email with the promise of a big prize but request payment before distributing the award.
• Phony technical support: Cybercriminals pose as technical support workers and instruct the senior to install software that grants them remote access to files and accounts.
• Bogus classified ads: Scammers lurk on legitimate marketplace websites to list phony items and services for sale. They may also feign interest in something a senior is trying to sell on these platforms.
• Charity fraud: Fraudsters pretend to be representatives of well-known charitable organizations to exploit donations from their victims.
• Cryptocurrency scams: Scammers entice victims into investing in cryptocurrency with the promise of high returns or make payment demands for fictitious bills.

Red flags that a request might be suspicious include a demand for immediate action or an appeal for payment via nontraditional methods like gift cards or cryptocurrency. Also watch out for an offer that's too good to be true, like a prize for a contest your parent doesn't remember entering or unprecedented savings off of a utility bill.

If you believe your parents have been victims of scams targeting seniors, report it as soon as possible to the National Elder Fraud Hotline.

How do scammers use AI to target seniors?

Beyond the financial vulnerability that comes with aging and cognitive decline, scams are getting harder to spot—especially for seniors—because AI is making fraud easier to accomplish.

AI exacerbates elder fraud because phishing and scam attempts that once required significant technical skill and investment of time and resources are now widely available, thanks to various AI products and tools. Bad actors can use these tools to impersonate loved ones, mimic financial institutions and craft more believable scams. These tools are so powerful that they can replicate someone's voice, facial expressions or writing style with just a few samples pulled from public social media posts.

Share these simple guardrails with all family members to help reduce the risk around AI and deepfake fraud attempts.

• Choose a safe word for emergency calls.
• Encourage your parents to verify requests through a known number rather than the number that contacted them.
• Add yourself as a trusted contact to your parents' accounts so banks can alert you to unusual activity.
• Use a call-blocker tool for landlines that lets you block unknown calls or only accept calls from a predetermined list.
• Store important financial documents and information in a safe or other inaccessible place so they're not easily accessed by your parents' visitors.
• Have more than one family member review your parents' account activity because fraud sometimes originates within the family.

Education and early planning go a long way in staying ahead of these evolving scams, so it's critical to have ongoing conversations around scams targeting seniors.

Can a financial advisor help prevent elder scams?

If you're having trouble broaching this subject with your parents, a financial advisor may be able to help. An advisor can serve as a neutral third party for difficult conversations. They also may be able to set you up as a trusted contact on accounts so they can alert you to unusual activity or signs of cognitive decline.

"It's important to balance overprotecting your parents with trying to monitor what they're doing or getting involved in their finances," Shuriah says. "We don't want to overly control our parents' lives and make them feel powerless. It's an ongoing process."

The bottom line

Although financial fraud targeting seniors is on the rise, there are several steps you and your family can take to help protect your parents from becoming victims. In addition, your banker can help you safeguard assets by consolidating accounts, adding security features like monitoring tools and account alerts and including trusted account contacts. To learn more about protecting parents from elder fraud, reach out to a First Citizens banker.