Protecting Mom, Dad From Scammers

Identity theft is the fastest growing crime in America, affecting almost 10 million people a year.

Unfortunately, senior citizens are frequently the ones falling victim to financial scams and identity theft.

So, how can you protect Mom and Dad from scammers looking to cash in on their hard-earned money?

On The Early Show Friday, Money magazine Managing Editor Eric Schurenberg told co-anchor Julie Chen one reason such criminals view senior citizens as easy prey is the crooks look to go where the money is.

Also, some aspects of that stage of life make them easy targets. They're more likely to be home and answering the phone when it rings. And they often feel vulnerable because they're living off their retirement savings and don't have a steady paycheck to fall back on. So, they're worried about making their money last, which makes them susceptible to get-rich-quick schemes.

But, Schurenberg assured viewers, there are steps you can take to protect our parents and you don't have to be financial experts or detectives to do it. But you do have to have a plan and be involved in their lives regularly.

The first thing you want to do is to familiarize yourself with the scams out there. And Schurenberg broke them down into three categories. The first is the free investment seminar, which is usually a nice luncheon or dinner set up by investment counselors who will ask their clients to bring a friend. And it's the friend, your mom or dad, who gets the hard sell.

There's also the telemarketing scams. The most common ones are sweepstakes, free vacation packages/time share agreements, and 900 numbers that entice people with money-saving tips. Even if they don't buy anything, the telemarketers will be after them. And then, there's affinity fraud, where the con artist takes advantage of older people by the power of references, for example, through a church group or social circle.

Once you identify these scams, Schurenberg advises, tell your parents about them so they also can identify them and know what's up when they see them coming.

Then, keep an eye out for warning signs. You certainly don't want to make anyone feel incompetent, but take an active role in your parents' lives: Stop over at the house, take a look at their phone bills for 900 numbers, expensive phone calls to places you don't recognize, unusual or frequent charges to credit cards. If your parents are secretive or defensive about money, it's a sign that they've been scammed and are too embarrassed to tell you.If you think your parents may have fallen victim to a scam artist, call your state's securities regulator's office. You can find it on the Web site of the North American Securities Administrators Association (NASAA), the oldest international organization devoted to investor protection. It investigates violations of securities law.

If you sense your suspicions are warranted because, say, you see unusual charges on credit card bills, weird phone numbers on phone bills, costume jewelry lying around, casually ask where they came from. It's likely your parents will be honest with you, because they won't believe they've been scammed.

Even if you don't have definitive evidence that there's a scam taking place, it's important to get regulators involved so they can try to connect the dots with others in the area.

If you feel someone has gained access to your parents' credit card or bank information, close all affected accounts immediately. In addition, place a fraud alert on their credit reports. Fraud alerts are supposed to alert you when someone applies for credit in your name.

Creditors aren't required to abide by or even check the alerts. And you can even take it a step further in some states by freezing credit. With a credit freeze, no one can open any form of credit in your name. Your credit file is off limits to potential lenders, insurers and even potential employers. And you may want to think about picking up a paper shredder for their house, so they can shred any important documents before throwing them in the trash.

One more thing: Don't lecture your parents. It's the one thing you don't want to do. If they've already been scammed and they realize it, they're probably embarrassed, and scolding them will only make the situation worse. A lecture might make them decide to withhold information from you. And if they start keeping their financial doings from you, it'll be even harder for you to remedy the situation.