Community financial institutions play critical role in recognizing financial elder abuse fraud
posted by Mike Burke on Wednesday, June 9, 2021 in SHAZAM Blog
Elder financial abuse is tough to combat, in part because it often goes unreported. These crimes involve someone improperly using an older adult’s money or belongings for their personal use, and it can happen to seniors of all social and economic backgrounds. Worst of all, this crime can do irreparable damage to its victims’ finances and may ultimately deprive them of basic needs such as food, medical care or housing.
What is elder abuse?
Elder abuse includes physical abuse, emotional abuse, sexual abuse, exploitation, neglect, and abandonment. Perpetrators can be the elder’s children, other family members, and spouses - as well as staff at nursing homes, assisted living, and other facilities. Financial elder abuse involves taking advantage of older people and unfairly benefiting from their monetary resources.
Scammers pose as trustworthy companions
Scammers target those elders perceived to be vulnerable; those isolated, lonely, physically or mentally disabled. Some are unfamiliar with handling their own finances or have recently lost a spouse. Scammers often pose as trustworthy helpers and there’s been an uptick of these frauds during the pandemic. Bad guys preying on people’s anxieties, coupled with social distancing requirements that alienate familiar contact points with trusted connections, helped set the stage.
Cyberspace is full of romance scammers eager to take advantage of lonely hearts using social media like Facebook or Instagram. The older the target, the heavier the financial toll, according to the FTC. The median individual loss from a romance scam for people 70 and over was $9,475, compared to $2,500 across all age groups.
Many elderly victims are often too confused, fearful, or embarrassed by the crime to report it. It’s estimated there are at least 5 million cases of this form of elder abuse in the United States each year, but law enforcement or government officials learn of about only 1 in 24 cases. The National Council on Aging estimates the annual cost of elder financial abuse ranges from $2.6 billion to $36.5 billion. Financial exploitation is self-reported at rates higher than emotional, physical, and sexual abuse or neglect.
We all play a part
Community financial institutions are in a unique position to help protect their accountholders from financial exploitation. Watch for these signs that may help you, and others, identify and ultimately prevent elder financial abuse:
- Unusually large, frequent, or unexplained account withdrawals, uncharacteristic attempts to wire large sums of money, or checks written as “loans” or “gifts”
- Changes in account beneficiaries or authorized signers
- ATM withdrawals by an older person who’s never used a debit or ATM card
- New “best friends” accompanying an older person to your financial institution for withdrawals
- Statements no longer going to the accountholder’s home
- Suspicious signatures on checks or outright forgery
- Sudden nonsufficient funds activity, unpaid bills, eviction notices, or loss of belongings or property
- Closing accounts or CDs without regard to penalty
- A caretaker, relative or friend who suddenly begins conducting financial transactions on behalf of an elder without proper documentation
- Newly executed documents, such as a will or power of attorney, that the older person doesn't seem to understand
SHAZAM's clients can order materials from SHAZAM Power Marketing to help them educate their accountholders on a variety of topics. For elder fraud, we offer a bi-fold brochure for you to share with senior cardholders to help them identify and prevent fraud. The brochure can be a conversation starter when you’re apprehensive about unusual account activity.
We all play a part in protecting our elders. If you suspect financial fraud is happening, report it immediately:
- File a suspicious activity report (SAR). The electronic SAR form includes an “elder financial exploitation” category of suspicious activity
- Contact the local adult protective services agency for help. For state reporting numbers, visit the NCEA State Resources site or call the Eldercare Locator at 800-677-1116
- Report all instances of elder financial abuse to local police
June 15 is World Elder Abuse Awareness Day. Help spread the word about how to keep elders safe by sharing this information with your staff, accountholders and community. Follow us on social media and share our information to your company or personal pages.
- social media
SHAZAM, Inc. and ITS, Inc. provide this blog for general informational purposes only. Our blog may be shared by a direct link wherein the content remains as originally presented and has not been altered. SHAZAM, Inc. and ITS, Inc. assume no responsibility for errors or omissions in the contents on the blog. By using this blog, reader agrees that the information published does not constitute nor is a substitute for legal advice which should only be sought from a qualified, licensed attorney.
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