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Protecting Your Loved One from Financial Scams: A Caregiver’s Guide to Recognition and Reporting

Financial scams targeting older adults are heartbreakingly common, especially for those with dementia or cognitive changes. Scammers prey on trust, isolation, and slower processing speeds. This article gives you concrete steps to help your loved one recognize red flags, protect their assets, and report scams without shame. You are not alone, and there are practical tools that work.

Key points

  • Scammers target older adults because they are home more, answer the phone, and may have cognitive decline. Dementia dramatically increases risk.
  • Never shame a loved one who falls for a scam. Say, 'You did nothing wrong. We caught it, and we’ll fix it together.'
  • Set up practical barriers: call-blocking devices, limited cash/cards, bank alerts, and a safe word system.
  • Establish a financial power of attorney and consider a trust to protect assets. Consult an elder law attorney.
  • Monitor accounts regularly for unusual activity. Report scams to the FTC and local police immediately.
  • For in-home caregivers, ensure the agency is bonded and insured. Keep valuables locked away.

Why Older Adults Are Targeted

Scammers deliberately target older adults because they are often home during the day, more likely to answer the phone, and may have more leisure time to engage with unsolicited calls or messages. As we age, our vision and hearing decline, making it harder to spot fake documents or hear subtle cues in a caller’s voice. Additionally, cognitive changes—whether from normal aging or dementia—can reduce a person’s ability to recognize a scam or remember that they already gave money to a similar caller. The result is that roughly one in three older adults faces financial exploitation, and many never report it because they feel embarrassed or ashamed.

The Unique Risk for People with Dementia

When dementia is present, the risk skyrockets. Scammers are clever: they pretend to be bank representatives, charities, or even long-lost relatives. They may even impersonate you, the caregiver, to gain trust. A person with dementia may not remember a previous scam attempt, may have trouble understanding that a caller is lying, or may feel pressured to be polite and helpful. This is not a character flaw—it is the disease. Your loved one is not at fault, and the shame belongs entirely to the scammer.

How Scammers Operate

Scammers use phone calls, emails, social media messages, and even official-looking junk mail. Common tactics include claiming a grandchild is in jail and needs bail money, pretending to be from the IRS or Social Security, offering fake prizes or sweepstakes, or posing as a tech support agent who needs remote access to the computer. They often create urgency—'Act now or you’ll lose everything'—to bypass rational thinking. For a person with dementia, this pressure can be overwhelming and lead to quick compliance.

General caregiving information, not medical advice. Check medications and major care changes with your clinician.

Step-by-step

  1. Start a calm, non-judgmental conversation about scams. Say, 'I’ve been reading about how common these calls are, and I want us to be a team. If anyone ever asks for money or personal info, let’s check with each other first.' Use a neutral tone to avoid making them feel defensive.

  2. Set up a 'safe word' system for phone calls. Agree on a simple word or phrase that only you and your loved one know. If a caller claims to be you or a family member, your loved one can ask for the safe word. If they don’t know it, hang up immediately.

  3. Reduce the number of unsolicited calls by registering their phone number with the National Do Not Call Registry (donotcall.gov). For landlines, consider a call-blocking device like the CPR Call Blocker or a service like Nomorobo that automatically screens for robocalls.

  4. Limit access to large sums of money. For a person with dementia, consider removing credit and debit cards from their wallet. Keep only a small amount of cash for daily needs. Store checkbooks, extra cards, and bank statements in a secure place at home or offsite with a trusted family member. Reassess this regularly with their doctor and only as long as they are unable to manage money safely. Always explain the change and get consent whenever possible.

  5. Set up account alerts with their bank. Most banks allow you to receive text or email notifications for any transaction over a certain amount (e.g., $100). This lets you catch unusual activity quickly without having to check statements manually.

  6. Create a 'financial power of attorney' (POA) document with an elder law attorney. Before starting, discuss with your loved one's doctor to determine if they still have the capacity to grant a power of attorney. Then consult an elder law attorney. This legally authorizes you to manage their finances if they become unable to do so. Discuss with a lawyer which type of POA (durable, springing) is best for your situation.

  7. Establish a joint account or a trust for the majority of their funds. Speak with a financial advisor or elder law attorney before setting up a joint account or trust, as these can affect taxes, Medicaid eligibility, and other benefits. A trust can protect assets and allow a co-trustee to oversee spending. The Consumer Financial Protection Bureau offers a free four-part guide called 'Managing Someone Else’s Money' that explains the roles of POA, guardians, trustees, and representative payees.

  8. Practice the 'three-second pause' rule. Teach your loved one to pause for three seconds before giving any information over the phone. During that pause, they can think: 'Did I expect this call? Do I know this person? Should I hang up and call my caregiver?'

  9. If a scam occurs, act quickly but without blame. Go to the bank immediately—many banks can freeze accounts or reverse transactions if reported within 24 hours. Then file a report with the Federal Trade Commission (FTC) at ReportFraud.ftc.gov and your local police department. Remind your loved one: 'You did nothing wrong. Scammers are professionals. We caught it, and now we’ll fix it together.'

  10. For in-home paid caregivers, ensure the agency is bonded and insured. Ask the agency: 'Do you bond your caregivers? What is the bond amount? What is the procedure for filing a complaint?' Keep valuables, checkbooks, and credit cards in a locked safe or safety deposit box when caregivers are present.

What not to do

  • Do not shame or scold your loved one after a scam. This will make them hide future incidents and feel more vulnerable. Instead, say, 'Thank you for telling me. We’ll handle this together.'

  • Do not assume they will recognize a scam just because you explained it once. Dementia affects memory and judgment. Repeat the warning signs regularly and use visual reminders, like a sticky note by the phone that says, 'Never give bank info over the phone.'

  • Do not take away all financial independence without explanation. This can feel like a loss of dignity. Instead, frame it as a team effort: 'Let’s put most of your money in a safe account that we both watch, so no one can trick us.'

  • Do not ignore small, unusual charges on bank statements. They may be 'test' transactions by scammers. Report them to the bank immediately and consider freezing the card.

  • Do not let your loved one use public computers or shared Wi-Fi for banking. Scammers can install keyloggers or steal passwords. Use a private, secure device at home.

  • Do not keep large amounts of cash in the house. It is a target for theft by visitors, caregivers, or even the person with dementia who may hide or lose it. Use a bank account or a prepaid debit card with a low limit instead.

Practical tools

  • The 'Safe Word' Script

    Write down a simple safe word (e.g., 'blueberry') and place it near the phone. Practice this script: 'If someone calls and says they are me or a family member, you say: 'What’s the safe word?' If they don’t know it, say 'I have to go now' and hang up. Then call me right away.'

  • Call-Blocking Device: CPR Call Blocker or Nomorobo

    The CPR Call Blocker is a physical device that connects to a landline and blocks known scam numbers. Nomorobo is a service that works with both landlines and cell phones to automatically screen robocalls. Set it up for your loved one’s phone to reduce scam calls by 90%.

  • Bank Account Alert Checklist

    Create a simple checklist for yourself: (1) Log into your loved one’s bank account online. (2) Go to 'Alerts' or 'Notifications.' (3) Set alerts for any transaction over $50 or any new payee added. (4) Choose to receive alerts via text or email. (5) Test it by making a small transfer. Review alerts weekly.

  • The 'Pause and Call' Card

    Make a small laminated card that fits in a wallet or sits by the phone. On one side: 'If someone asks for money or personal info, PAUSE. Then call [your name] at [your phone number].' On the other side: 'Scammers are good at pretending. You are not alone. We check together.'

  • Consumer Financial Protection Bureau Guide

    Download the free four-part guide 'Managing Someone Else’s Money' from consumerfinance.gov. It covers roles for powers of attorney, court-appointed guardians, trustees, and representative payees. Use it to understand your legal responsibilities and how to protect assets.

  • Financial Power of Attorney Template Discussion

    Schedule a meeting with an elder law attorney. Bring these questions: (1) What type of POA is best for my loved one’s stage of dementia? (2) Can we add restrictions, like requiring two signatures for large withdrawals? (3) How do we update the POA if my loved one’s condition changes? The attorney can draft a document that balances protection with dignity.

Discuss with your clinician

Ask your loved one’s doctor: 'Given their cognitive stage, are they at high risk for financial exploitation? Should we consider a formal capacity evaluation for financial decision-making?'

If your loved one has been scammed and is experiencing extreme stress or anxiety, ask: 'Could this trauma worsen their dementia symptoms? Should we involve a geriatric psychiatrist or social worker?'

For a person with dementia who insists on keeping credit cards despite repeated scams, ask the doctor: 'Is it safe for them to have any access to funds? Should we pursue a guardianship or conservatorship?'

If you suspect a paid caregiver is stealing, ask the agency: 'Do you bond your caregivers? What is the bond amount? What is the procedure for filing a complaint?' If the agency is uncooperative, contact your state’s licensing board for home care agencies.

Ask your loved one’s doctor: 'Before we set up a power of attorney, can you assess whether they have the capacity to grant one?'

Ask a financial advisor or elder law attorney: 'How would a joint account or trust affect my loved one’s taxes, Medicaid eligibility, and other benefits?'

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