What Is a “Trusted Contact Person” for Financial Accounts?

What Can a Trusted Contact Do?

A trusted contact person can:

• Confirm your contact information. If the financial institution hasn’t been able to reach you and is unsure their information is current, your trusted contact can provide the information.
• Tell your financial institution how to reach you. If you simply failed to notify them of a change of address, a trusted person could save the day in the event a brokerage wanted to reach you because of some large, suspicious withdrawals.
• Confirm whether you are experiencing a health crisis. If failure to respond to contact attempts is because you are physically unable, your trusted contact person can keep your financial institution informed about your situation as it unfolds.
• Give your financial institution a new point of contact. If someone has been appointed as your guardian, executor or has financial power of attorney, a trusted person can tell your financial institution.

A trusted contact cannot access your account information or make transactions. If you want to authorize someone to do that, you’ll need to give them financial power of attorney.

What Is the Benefit of Adding a Trusted Contact?

A trusted contact person gives your financial institution a way to find out whether you freely chose to make financial transactions that might raise suspicions of fraud or exploitation. Your bank, credit union or investment firm might look to another person if:

• You are not responding to emails or phone calls, perhaps because you have lost access to email or misplaced your phone.
• You forgot to update your contact information.
• You haven’t responded to other attempts at contact, perhaps because you are traveling or have been hospitalized.
• The financial firm has a reasonable belief that you are being exploited.

A trusted contact can let your financial institution know what your current situation is. They may be able to explain why you have not responded or tell the financial institution how to reach you.

Having a trusted person can help protect you and your money from fraud and exploitation. You have authorized your financial institution to reach out to someone else for more information if transactions trigger suspicion of fraud.

How Do I Choose a Trusted Contact Person?

Trusted persons are usually friends or relatives—people who are likely to know your current situation and will let your financial institution know. You want it to be someone you trust and stay in touch with. Some financial institutions suggest choosing someone who does not have access to your accounts.

Typical candidates may include an adult child, friend or neighbor. Some people choose attorneys. Trusted contact persons must be at least 18 years old, and you should feel confident they will know how to reach you and will act in your best interest.

The person does not need to know about your finances, but they do need to know about you. It is essential that you trust the person, and it may be best to have more than one trusted person listed.

How Many Trusted Contacts Should I Have?

You can name as many trusted contacts as your financial institution allows. The Consumer Financial Protection Bureau (CFPB) suggests naming multiple trusted contacts in case one of them is involved in suspicious account activity or otherwise unavailable. Sadly, people are often defrauded by people they trust.

If you change your mind about who you want as a trusted person, or want to appoint a new or additional one, contact the financial institution involved.

How Do I Set up a Trusted Contact Person?

You might have an option to name a trusted contact person when you log in to your account. You will need their:

• Full name
• Street address
• Phone number or email address

Another option is to call your financial institution and ask whether they have this option available and if so, how to set it up.

Finally, some financial institutions, brokerages in particular, have emailed customers asking them to set up a trusted contact person. If you get such an email, be absolutely certain it is from your brokerage before actually clicking on anything. Scammers have sent similar emails.

Do I Have to Set Up a Trusted Contact Person?

You don’t have to set up a trusted person if you don’t want to. However, brokerages are required to ask if you’d like to. Banks and credit unions are not required to ask, but many do.

And while your financial institution will not require you to set up a trusted person, it’s smart to do so. Its purpose is to help you from losing assets or being exploited financially.

The Bottom Line

If there’s unexpected and atypical activity in a financial account, or you’ve been affected by a natural disaster or a medical emergency, your financial institution may try to get in touch to see if a transaction was legitimate. If you are unreachable, your trusted person should be able to tell them how to reach you or someone who represents you.

You can also help protect yourself from financial exploitation by checking bank accounts online and making sure you recognize transactions. Likewise, checking your credit reports regularly can help assure you that no one is using your identifying information to obtain credit except you.