By Linda W. NavarroThere are many ways that banks engage in protecting their customers’ hard-earned dollars. Lending prudently, providing deposit insurance, combating fraud, advising about smart financial choices—the list goes on. Lesser known, but equally important, is the work banks do to protect older Americans from financial abuse. (See “Safe Banking, Savvy Seniors.”)
At the Oregon Bankers Association, we became active in elder financial abuse prevention in 1995, when we passed legislation providing liability protection to Oregon banks when they report suspected abuse to appropriate authorities. From there we began what has been a two-decade commitment to training bankers on how to detect and report suspected elder financial abuse. While the problem of elder abuse continues to grow, we know that banks are making a difference through training and voluntary reporting.
In a report released in 2014 by the Oregon Office of Adult Abuse Prevention and Investigations, it was revealed that non-mandatory reporters in Oregon, such as bank employees and family members, were the most frequent reporters of substantiated financial abuse cases. Several states have mandatory reporting statutes governing financial institutions. In Oregon, we have demonstrated that effective reporting of suspected elder abuse is more about training bankers to understand, recognize and report abuse as opposed to a mandated system of compliance.
Thanks to a partnership with Oregon’s Department of Justice, Department of Human Services, AARP and Area Agencies on Aging—along with a federal grant—we were able to produce bank training materials in 1998 that were pioneering at that time. Our training kit served as an example in many other states, and its components are still used today.
As awareness of financial exploitation grows, so do the resources banks can use to train staff on the issue. New tools emerge regularly, such as those recently created by a joint effort between the ABA Foundation and AARP. However, despite the efforts to combat financial exploitation, we have only made a small dent in the problem. It is estimated that older Americans are defrauded of approximately $2.9 billion annually, targeted both because of their savings and their susceptibility to financial abuse for reasons ranging from physical limitations and cognitive impairment to isolation and dependence on others for care.
No one is immune. The U.S. population over age 65 is expected to grow from about 13 percent today to 20 percent by 2030. Moreover, new methods of abuse constantly emerge. Financial exploitation might involve illegal banking transactions or a third-party scam. Sadly, family and caregivers are the most common perpetrators.
The good news is that we know banks can make a difference. An FDIC survey of households found that over half of seniors age 65 or older rely on bank tellers to access their accounts. Frontline staff who have the knowledge and willingness to ask a few questions can, quite literally, stop abuse as it occurs.
Together, we as an industry must empower all of our employees, customers and communities with facts about financial abuse of older Americans. Banks and their trade associations must ensure that our patchwork of federal and state laws clearly permits reporting of suspected abuse to appropriate authorities without fear of liability for disclosing critical information. And state and local governments, along with law enforcement, must commit resources to gather and promptly respond to reports of abuse.
If we are lucky, all of us will live long enough to fit the definition of “older American.” We can save and plan for a long and comfortable life. We cannot, however, render ourselves, our loved ones nor our customers immune to financial exploitation. It is alarming, but it should also motivate us to do everything in our power to prevent this heinous crime.
Linda W. Navarro is president and CEO of the Oregon Bankers Association.