Iowa woman’s mother-in-law, 73, lost $150K to a scam. They froze her credit, moved her into their home and set rules — now she’s angry. Is that fair?

Financially reckless, but not mentally unstable

Kelly’s mother-in-law has displayed a level of financial recklessness that the family can no longer ignore. Unbeknownst to them, she managed to apply for eight credit cards, all of which now carry fraudulent charges.

“The home that we downsized her to is in our name, and thank goodness because we are pretty confident that the person scamming her would have convinced her to get a second mortgage on the property,” Kelly said.

Seniors are frequent targets of scams because fraudsters believe they are more trusting and tend to have larger retirement accounts that can be easily accessed, according to the National Council on Aging. However, many are also targeted because of their cognitive decline.

Research from Columbia University shows that at least 10% of U.S. adults over 65 have dementia, while another 22% have mild cognitive impairment. Under these circumstances, families often establish a legal power of attorney (LPA) to manage finances when a senior’s cognitive abilities decline, according to the Alzheimer's Association.

Despite her financial missteps, Kelly’s mother-in-law has shown no signs of mental incapacity.

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Gently parenting your parents

Bad decisions aside, Cruze and Delony said Kelly’s mother-in-law is entitled to maintain control over her own finances.

“I don’t want you guys to have this level of parenting over a 73-year-old who mentally is stable,” Cruze said. “She's fallen for scams but it's not because … she has some mental decline. She's a 73-year-old who doesn't make wise decisions and there's only to a point that you guys can control that.”

Delony agreed, adding, “She’s an adult” and that “no adult likes that kind of help.”

Rather than seizing control over her finances, Cruze and Delony suggested that Kelly and her husband could take time to communicate openly with her about their concerns; educate her on common scams and tactics fraudsters use; set up spending guidelines and limits and enable digital safeguards, such as two-factor authentication.

Additionally, they recommended frequent reviews of her financial statements and contacting her bank or the FTC promptly if fraud occurs again. These steps could limit future losses while allowing Kelly’s mother-in-law to enjoy her autonomy.