How CPAs Can Protect Their Aging Clients

If you see something, say something. That’s the advice Mark Gallegos, CPA, MST, tax partner at Porte Brown LLC, gives his elderly clients when they receive a suspicious email, text, or phone call demanding money or personal information from them.

“If something doesn’t seem right, I advise my clients to just pick up the phone and call me, to not even hesitate,” Gallegos says.

While no one is immune from financial fraud, elderly individuals are particularly vulnerable. According to the FBI’s Internet Crime Complaint Center’s (IC3’s) 2023 Elder Fraud Report, people ages 60 and over lost a combined $3.4 billion to fraud worldwide in 2023, with the average loss per victim totaling $33,915.

As noted in IC3’s report, older adults are disproportionately targeted and lose more money in scams than their younger counterparts, in part because they usually have more assets.

Other factors that are unique and specific to the aging population also make these individuals more susceptible to fraud. For example, some aging clients may be unaware of the latest scams, are generally less suspicious of fraudulent activities, may be more isolated from regular social interaction, and/or may have to manage cognitive decline impairments.

Not surprisingly, these vulnerabilities require extra vigilance and proactive measures from the people closest to them—and in some cases, that person is their certified public accountant (CPA).

Here, three CPAs offer guidance and best practices for how other practitioners can best protect their aging clients and serve as their first line of defense.

ENCOURAGE OPEN COMMUNICATION

A CPA’s first move should be to encourage their aging clients to speak up and contact them directly when something appears suspicious, Gallegos emphasizes. He recalls a time when one of his clients, a woman in her early 80s, was led to believe that the IRS needed her to immediately repay her tax bill through $15,000 in Apple gift cards. Frightened by the phone call, she drove to the mall to comply. It wasn’t until she was questioned by an Apple store employee that she called Gallegos: “I said absolutely not—don’t buy anything. I need you to leave the store and just go home. The IRS communicates by letter, not by a phone call out of the blue.”

Gallegos’ client can hardly believe she fell for that impersonation scam today. However, Gallegos understands how the fear and desire for a quick resolution can lead some to follow through. But, as Gallegos always reminds and warns his clients, “Once the money’s gone, you’re never getting it back.”

KEEP IN TOUCH MORE THAN ONCE A YEAR

The most effective defense against scammers is the most straightforward: explaining the latest scams to clients and how to prevent them. Of course, while this is best done in person, CPAs should supplement this communication with emails, phone calls, or mailed letters.

While CPAs are often considered more trusted than any other advisor, sometimes only a fraction of clients get all the guidance and advice they need and crave, says Elizabeth Buffardi, CPA, CFP, president and owner of Crescendo Financial Planners Inc. and co-chair of the Illinois CPA Society’s (ICPAS’) Personal Financial Planning Member Forum Group. Therefore, she recommends having ongoing conversations with clients throughout the year rather than a one-time check-in during tax season.

“In all of the downtime after tax season—the theoretical downtime—to me that’s the best time to re-engage with your clients so that you as their CPA stay top of mind with everything that’s going on in their lives.”

For Buffardi, sometimes it takes more than a phone call to make this connection with her aging clients. In fact, she’s gone as far as making a house call to an elderly couple in a Chicago assisted living facility to help them with the fundamentals—changing their mailing address, checking their Social Security accounts, and gathering tax documents.

KNOW WHEN TO BRING OTHERS IN

Mary Pat Wesche, CPA, PFS, CFP, a financial advisor at Forum Financial Management, notes that her firm maintains strict protocols to prevent fraud, so she’s constantly reinforcing the need to protect personal information with her clients. In fact, this frequent communication makes it easier for her to determine if her elderly clients don’t sound like themselves.

Because financial decision-making can be affected by neurological changes, Wesche reminds CPAs that they can and should— with their clients’ permission—double-check unusual requests, especially large money transfers.

In those cases, Wesche will call a family member or other approved contact of the client to gauge what’s going on: “We can’t explain their whole financial situation to them. We’re not going to disclose a lot, but we’re going to say, ‘Hey, we got a call from your mom. We don’t know why she needs this $10,000. Can you check on her and see what’s going on?’”

With the client’s OK, Wesche recommends that CPAs create a circle of trusted contacts to serve as a safety net for cases like these. The contacts may include family members, attorneys, insurance providers, bankers, or executors of their will. Wesche says she collects this contact information from every client from age 60 on up. Caretakers sometimes bring clients to their appointments, but she won’t let them sit in on meetings if they’re not on the list.

Additionally, CPAs can encourage clients to appoint powers of attorney to carry out their affairs and protect them from financial exploitation as long as that person is trustworthy (e.g., even family members can be perpetrators of elder financial exploitation).

REMEMBER YOUR ETHICAL RESPONSIBILITIES

Notably, Illinois CPAs are already mandated to report suspected abuse, neglect, or financial exploitation under the Adult Protective Services Act. However, Illinois legislators are working on passing legislation supported by ICPAS that would further protect vulnerable adults, especially elderly individuals, from financial exploitation. If passed, Illinois Senate Bill 1551 would require investment advisors and similar qualified individuals to report when they have a reasonable belief that financial exploitation has occurred with an eligible adult. Further, the bill allows advisors to delay disbursements from a person’s account if they suspect elder financial exploitation.

However, Gallegos reminds CPAs that fraud isn’t limited to just aging clients. “I have clients who are 25 years old, 35, 45, 55, and they all fall for the same stuff. Some of the younger ones are more apt to be on their smartphones just clicking away because that’s what they do—and I get it, it’s easy,” Gallegos says. “In my opinion, you have an ethical responsibility to communicate information whether they’re elderly, a teenager, or anyone in between.”

The way Buffardi looks at it is through the simple necessity of taking care of one another: “No. 1, karma takes no prisoners, and No. 2, I feel like in the craziness that we’re living in, we have to look out for each other—we’re all we have.”

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