It’s ageless, insidious, and by one estimate, it’s costing Americans $2.9 billion per year. It’s financial exploitation of the elderly, and some are calling it the crime of the 21st century.
With more than 50 million Americans 62 years of age or older, and another 10,000 Americans reaching retirement age every day, financial crimes against senior citizens probably won’t be on the downswing anytime soon.
The matter is particularly distressing to the Consumer Financial Protection Bureau and the FDIC, which recently teamed up to deliver “Money Smart for Older Adults,” a resource guide aimed at informing seniors about common types of scams and ways of protecting against financial exploitation.
Community banks and credit unions are sadly no strangers to the crime, and many have reacted by training their branch staff to recognize the potential signs of financial abuse.
Since 1996, the Massachusetts Bankers Association, the Attorney General’s Office, Consumer Affairs, Elder Affairs, and the Division of Banks, have teamed up on the Massachusetts Bank Reporting Project, a statewide effort to help banks train their staff on the warning signs of possible abuse and designate a point person to coordinate those efforts and contact appropriate agencies, when it’s necessary.
More recently, the Massachusetts legislature established the elder protective services commission, which is tasked with, among other things, examining the issue of financial exploitation of the Bay State’s senior citizens. The commission, chaired by Rep. James O’Day, is made up of bankers, police, legislators and elders’ advocates and aims to put out a report on the subject by the end of this year.Marla Snyder, a compliance officer and vice president at the Wakefield-based Savings Bank, serves on the commission and coordinates these particular anti-fraud efforts at the bank. She and other bankers agree: The first step to prevention is knowing your customer.
‘Red Flags’
“When you know your customer, you get a sense of what’s going on,” said Janis Dodge, a senior vice president and head of retail banking at Salem Five Bank.
Branch staff might be on alert if they notice a customer withdrawing unusually large amounts of cash from the ATM or changing their accounts without explanation. Similarly, a request for a high-dollar money order might set off a teller’s red flags.
Of course, scammers aren’t limited to the classic Nigerian lottery scam, which has received a lot of attention in the past decade. While the aforementioned MetLife study found that about 51 percent of scams against seniors are committed by strangers, elder financial abuse by friends or family came in second, at 34 percent of the financial crimes the report’s authors investigated.
“You’re seeing more and more family desperation,” Snyder said. “People are struggling. ‘Mom or Dad or Grandma or Grandpa has money and I need to buy groceries.’ It’s not so much drugs or alcoholism, as it is desperation to get by. People are helping themselves to funds they might not have four or five years ago.”
According to the CFPB, “A key factor in some cases of elder financial exploitation is mild cognitive impairment which can diminish an older adult’s ability to make sound financial decisions.”
But Ingrid Adade, the financial education officer at Leominster Credit Union, says there’s a little bit more to it than sheer vulnerability. She prefers the word “trusting.”
“Our particular generation, we grew up trusting our family members and our neighbors. Your word was your bond,” Adade says.
And when your typical teenager even has difficulty keeping up with Facebook’s bimonthly privacy changes, imagine how difficult it can be for a senior citizen to be on the alert for online scams.
Confronting a senior about financial abuse he or she may be suffering is no easy task, either, especially so when it’s a family member or caregiver who may be perpetrating the crime.
“It’s always hard for the person it’s happening to, to actually believe it,” Adade said, but allowing the potential victim to meet with a banker behind closed doors helps them save a little face.
“Usually, the member will open up to me a little differently than someone in the branch. They have that type of relationship with a person in the branch,” Adade said. “I think my age helps, too. I’m a senior citizen, as well. They trust me, and it helps with the embarrassment level.”
Success Stories
Stopping financial exploitation in its tracks can be tricky, but proactive bankers have plenty of success stories to tell, too.
While Snyder told of one man who became indignant and closed his accounts after a branch manager questioned him regarding large cash withdrawals and the unfamiliar person sitting next to him in the drive-up teller window, she also told of how the bank was able to intervene in the case of an elderly customer being scammed in a domestic lottery scheme. The Savings Bank contacted her son, who was named as a joint account holder, and together they were able to contact local police.
And Salem Five was recently recognized by a local police department for ita part in stopping a foreign lottery scam that was victimizing an older customer.
“Many times, people will come in and ask for a money order. Or they’ll come in with a large money order and ask for a check. We ask why, where, who, and their knowledge of it,” Dodge said. “It might sound like we’re being nosy, but we’re really there to protect them.”
