Older Americans need more help from their banks and credit unions to protect them from being ripped off by strangers and relatives, the Consumer Finance Protection Bureau says.
Nearly 1 in 5 seniors report being a victim of financial exploitation, the government bureau says.
The illegal or improper use of a senior’s money, property or assets is the most common form of elder abuse and costs seniors billions of dollars per year, said CFPB Director Richard Cordray.
Abuse may be perpetrated by family members, caregivers, scam artists, financial advisers, home repair contractors or fiduciaries, the bureau said.
“When seniors fall prey to a scam by a stranger or to theft by a family member, they may be too embarrassed or too frail to report it,” Cordray said. Banks and credit unions are uniquely positioned to look out for older Americans and take action to protect them.”
There are 57 million Americans now age 62 or older, and 10,000 more join them every day, the bureau said. And seniors can be attractive targets for financial abuse: They may own significant assets, have equity in their homes and regular income such as Social Security or a pension. Also, isolation, cognitive decline, physical disability or other health problems make older Americans especially vulnerable.
Studies indicate that 22 percent of Americans over age 70 have mild cognitive impairment and about one-third of Americans age 85 and over have Alzheimer’s disease, the bureau said.
Because the great majority of older adults have checking or savings accounts and many rely on the tellers they see for banking services, financial institutions are poised to detect and act when an elderly account holder has been targeted or victimized, the bureau said.
The bureau cited recent abuse cases:
- A Minnesota pastor persuaded a man suffering from Alzheimer’s and Parkinson’s disease to allow him to manage his finances. The pastor made over 130 withdrawals from the older man’s bank account and later was convicted of stealing about $25,000.
- Prosecutors charged an Indiana home-care worker with nine felonies after she took more than $150,000 from a 79-year-old woman with dementia. The caregiver stole the funds through transactions on multiple credit cards, checks drawn on a savings account and cashed certificates of deposit.
- An Oklahoma woman received mail and phone calls telling her that she had won a sweepstakes and would get prizes if she sent money to collect her winnings. She sent as many as 90 checks a month, in response to requests for payments of $50 to $2,000. A bank employee discovered the losses when the victim asked how she could send a large amount of cash through the mail.
What financial institutions can do
Many states require banks and credit unions to report suspected elder financial exploitation.
Among the bureau’s recommendations for banks and credit unions:
- Staff training: To prevent, detect and respond to abuse, employees should know the warning signs of financial exploitation and appropriate responses.
- Fraud detection technologies: Banks and credit unions should use predictive analytics to review account holders’ patterns and explore additional risk factors that may be associated with elder financial exploitation.
- Age-friendly services: Banks and credit unions should offer opt-in limits on cash withdrawals and places where money is drawn, alerts for specific account activity, and view-only access for authorized and trusted third parties. Older consumers should be able to provide advance consent to share account information with a trusted relative or friend when the consumer appears to be at risk.
- Reporting suspicious activity: Financial institutions should promptly report suspected exploitation to relevant federal, state and local authorities, regardless of whether reporting is mandatory or voluntary under state or federal law.
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