Seniors Increasingly Victims of Financial Abuse
According to the U.S. Treasury Department, the number of cases involving senior financial abuse has more than doubled in the last five years, and the numbers are only expected to grow as the population ages.
In 2018, U.S. banks reported 24,454 cases of senior financial fraud, more than double that from 2013, and a 15% increase from 2017. The Wall Street Journal reported that one credit union currently sees around 1 case of elder financial abuse a month, compared to 1 or 2 cases a year a decade ago. However, of even more concern is that for every case that gets reported, it's estimated that 44 go unreported!
How big is the problem? The MetLife Study of Elder Financial Abuse: Crimes of Occasion, Desperation, and Predation Against America’s Elders, estimates older Americans lose $2.9 billion annually from financial abuse.
Many of the cases don't only involve strangers, but family members and caregivers. Other schemes originate from phone, email, dating, and grandchild scams. Some attribute the increase to a rise in social media usage by vulnerable seniors who reveal details about their personal lives which are then exploited by scammers.
The elderly are targets because they form the often have bank accounts with significant sums of cash available, and are often are isolated and in cognitive decline, making them easy and lucrative targets.
So what can governments, banks, seniors and family members do to protect the elderly?
- The Federal government has passed the Senior Safe Act, modeled on the state of Maine's Senior $afe program, which protects financial institutions and their employees from liability in the event they report a suspicion of financial abuse or exploitation of a senior to law enforcement. Senator McCaskill, one of the primary sponsors of the bill said, “e’ve got to give financial professionals the ability to combat fraud when they see it — while protecting the privacy of their customers.”
- Some states, such as Texas, allow bank employees to delay or refuse suspicious money transfers until family members are notified.
- Banks are training employees to identify suspicious transactions and vulnerable older adults. For example, a $15,000 wire transfer to help a grandson in dire jeopardy, might warrant a verification phone call to the grandson's parents.
- Seniors ought to restrict access to their social media accounts to family and "real" friends. They should NEVER agree to send money or bank account information to online dating or romantic partners. They should never send money or share financial information that originated by a phone request.
- Professional caregivers should never be given bank account access or passwords. If they do the shopping for a senior, they should be given a prepaid debit card and requested to submit receipts, do not give them cash. All caregivers should also be screened with a criminal background check before hiring and have references called.