Elder financial abuse is on the rise with thousands falling victim each year and millions more vulnerable. According to an in-depth report by the Wall Street Journal, U.S. banks reported a record 24,454 suspected cases of elder financial abuse to the Treasury Department in 2018. That’s more than double the cases reported just five years ago.
Elder Financial Abuse on The Rise
It’s little wonder that elder financial abuse is on the rise, according to the American Bankers Association, people over 50 represent only one-third of the population but account for well over half of the bank accounts and 70% of bank deposits. Recently federal and state laws have been requiring banks to keep better tabs on elder financial abuse, but the chance for abuse is only growing:
- An average of 10,000 Americans turn 65 a day, a pace expected to continue through 2030.
- By 2030 one in every five people will be 65 or older, according to the U.S. Census Bureau.
- According to the National Adult Protection Protective Services Agency, elder abuse is vastly under-reported; only one in 44 cases of financial abuse is ever reported.
- Abused seniors are three times more likely to die and elder abuse victims are four times more likely to go into a nursing home.
- Almost one in ten financial abuse victims will turn to Medicaid as a direct result of their own money being stolen from them.
- Cognitive impairment and the need for help with activities of daily living make victims more vulnerable to financial abuse.
To help combat the problem, banks are now training employees to detect, stop, and report issues without violating a customer’s privacy. Employees are even learning to recognize early signs of cognitive decline.
One scam on the rise is the “grandchild scam.” A customer in New Canaan, Conn. Walked into a branch of People’s United Bank, asking to wire $30,000 to her grandson. The customer said he had been in a car accident while vacationing in Mexico. One of the employees suspected the popular scam and had the customer, in their 70s, call their grandson. It turned out he had been at school all day, not in Mexico. That bank employee recognized that something was not right and took action, she received a Fraud Fighter award from the bank, another part of their efforts to combat elder financial abuse.
Here’s a list of some popular scams aimed at the elderly that are on the rise:
- Lottery & sweepstakes scams “You’ve already won! Just send $2,500 to cover your taxes”
- Home repair/travelling conmen “We’re in your area and can coat your driveway/roof really cheaply”
- Charity scams: falsely soliciting funds for good causes; very common after disasters
- I’m from the utility company; I need you to come outside with me for a minute (while an accomplice steals valuables)
- Roof repair, yard work, home repair scams
- Telemarketing scams and accompanying threats
- Money sent via telegraphs to people claiming lottery winnings
Even though the “grandchild” scam, and a few of the others listed above, may seem obvious to a trained bank employee, other elder financial abuse isn’t always so easy to spot and raise privacy issues, or risk angering customers. In fact, the steps taken to detect fraud, such as delaying or cancelling of transactions could result in customers missing out on legitimate opportunities and needs.
New Laws Passed
Banks are not in this fight alone, there has been legislation passed to combat the issue. The Senior Safe Act is a federal law passed in May and it allows bank employees to report suspected cases of elder financial abuse to police and adult protective services. Some states have also passed their own measures.
- Tennessee and Texas allow bank employees to refuse or delay transactions, or notify family members when elderly customers request suspicious money transfers.
- New York offers grants for outreach in the elderly community to help educate on fraud
- California has enabled agencies, such as long-term care facilities, to report suspected elder financial abuse and help take appropriate action.
Who Commits Elder Financial Abuse
It’s not just elusive strangers over the phone that try to scam the elderly. According to NAPSA, situations of financial exploitation commonly involve trusted persons in the life of the vulnerable adult, such as:
- Family members
- Friends and acquaintances
- Bank employees
- Doctors or nurses
Sadly, anyone of power who deals with an elderly person on a daily basis has the opportunity to take advantage of the situation.
How to Fight Back
There are a few things family and the potential victims themselves can do to fight elderly financial fraud. First of all, avoid isolation, make sure the elderly people in your life have regular contact with a variety of trusted people. Learn to spot red flags such as, a secretive caregiver, unpaid bills, or changes to an established will. Finally, connect to resources that can help and educate. The Elder Car Locator can help connect people with resources in their area. The NAPSA website also has numerous resources that can help keep the elderly safe from scams.
To learn more about elder financial abuse and other types of financial fraud, contact Newman & Shapiro today!