A client called recently with excitement to alert us to his $1,000,000+ gaming winnings he was expecting to receive and the need to pull cash from his retirement assets to cover the fees he had to pay to collect. He had no Power of Attorney on file, but we did have a family member’s name on our Information Sharing Agreement. We were able to talk in a limited but critical way to alert family of the suspected fraud.
The US Government predicts that in 2018 an estimated $37 BILLION dollars will be stolen from our elders through fraud. Online and telephone scammers are smart, charming, and good at their trickery, but the dirty little secret is that almost 60% of the theft in that estimate will be committed by a family member.
What are we doing here at Alaska Permanent Capital to help prevent this fraud? We ask you to allow information sharing with your CPA and your attorney as well as document who has your Power of Attorney. If you have provided us with those named individuals and we suspect you are being defrauded, you have already given us permission to reach out to gather information on the suspicious activity. To further protect you from possible fraud, we are adding the additional procedure of asking every client, regardless of age, to add a trusted contact to our information sharing agreement who we can speak with if we have concerns. When you see the new changes to our Information Sharing Agreement it will outline exactly what this allows us to do and not do. It is not a substitute for a Power of Attorney and the person you name cannot move money. Schwab has a similar designation which we encourage you to use. Find out about it here: https://www.schwab.com/resource-center/insights/content/establishing-trusted-contacts.
As our clients’ fiduciary we know our clients, their values, and their spending style. We believe that we have a good chance of seeing this early before an algorithm at Schwab might pick it up, so we are adding the capability to our process. We have already used our new procedure to the benefit of a client and we will use every experience to sharpen these skills.
We are participating in the financial panel of a dementia symposium on November 8th where, in part, we will take a deeper dive into the red flags of fraud and what we can do as a community of professionals to curtail this cycle of abuse. In preparing for that conference we have discovered Senate Bill 86 and it should make all Alaskans proud. Alaska was on the forefront of creating a Financial Abuse Protection Order in 2012 that allows the freezing of accounts if “… there has been or is an immediate threat of a waste or dissipation of the proposed protected person’s funds or other property.” If a vulnerable person doesn’t have a POA (or the holder of the POA is committing the alleged abuse) and friends or family need to step in, the process could take months without this law. Their accounts could have been drained while the abuse is investigated. SB86 truly gives Alaskans a chance to protect our seniors and other states are taking heed. They are using our law as a model for their new laws to protect other victims across the U.S.
Marietta Hall, CFP®