Protect your elderly family members from financial scams

Forty billion dollars. That's how much crooked telemarketers steal from Americans each year, according to the National Consumers League; and 56 percent of those victims are over age 50, says the American Association of Retired Persons (AARP).

What can you do to help protect your parents or other older friends and relatives who may be vulnerable to such predators?

Common scams older people sometimes fall for include:

Trusting the wrong people. Many seniors are home all day with time on their hands. Unscrupulous telemarketers exploit their loneliness by lending a sympathetic ear to earn their trust. Tell your folks it's not rude to hang up if they're feeling overly pressured. Seniors also sometimes wind up on junk mailing lists and are bombarded with tantalizing offers that seem too good to be true. (They are.) The Federal Trade Commission's Web site, www.ftc.gov/bcp/conline/pubs/alerts/optoutalrt.htm, contains instructions for reducing unsolicited mail, getting off telemarketer's call lists and cutting email spam.

"Free" prizes. If someone says you've won a free prize and asks for money to pay for handling, postage or taxes, hang up. By law, you should never have to pay for any legitimate prize. If you suspect fraud, contact the state's attorney general office or file a complaint with the Federal Trade Commission (www.ftc.gov, click "File a complaint"). The National Fraud Information Center, www.fraud.org, is another good resource.

Get rich quick schemes. Many seniors on a fixed income worry about keeping up with inflation and can be susceptible to promises of easy money. Not only are these schemes far-fetched, they're often illegal. The U.S. Secret Service says Americans lose about $1 million a day to phone- or email-based wealth schemes, such as the infamous "Nigerian banking scam," where a supposed foreign officials offer millions for helping transfer money out of their country. AARP's Web site, www.aarp.org/money/wise_consumer/scams/, explains how these frauds are perpetrated and how to avoid them.

Unsolicited advice. Phony door-to-door "home inspectors" sometimes pressure unsuspecting homeowners into accepting unneeded repairs or "case the joint" for valuables while supposedly inspecting for damage. Show them the door. Another scam involves offering to repair a bad credit rating – for an up-front fee. Remember: No one can remove accurate, unfavorable information from your credit file, so work with your creditors directly if there's a problem.

Guard personal information. Identity theft is increasingly common. Be very careful with whom you share your Social Security number, credit card and bank account numbers, address and phone number. Whenever you fill out a contest entry or warranty registration card, or shop by catalog, you are providing the information direct marketers – legitimate and non-legitimate – need to generate more mailings. Practical Money Skills for Life (www.practicalmoneyskills.com/security), a free personal financial management site sponsored by Visa Inc., contains detailed information on identity theft and security precautions you should take as well as helpful information about direct marketing privacy issues.

If you suspect an older relative or friend may be a fraud victim, initiate a frank discussion and offer to help assemble evidence for the proper authorities. Unscrupulous people won't hesitate to take unfair advantage of your loved ones, so help level the playing field. As my flinty father-in-law says, better to be safe than sorry.

We've all been haunted by images of people who lost everything to a hurricane, flood or other natural disaster. All too often, though, people's lives are overturned by more commonplace events – either because they're uninsured, or they find out too late that their coverage was insufficient.