Financial abuse of seniors is a devastating crime. It can be as simple as taking money from a wallet or as complex as manipulating a victim into turning over property to an abuser.
Abuse may also involve the improper use of senior funds, identity, property or assets. Socially isolated seniors and those with cognitive impairments are particularly vulnerable to abuse. And only one in 44 financial elder abuse cases are ever reported.
ABA Foundation’s free new resource guide, Protecting Seniors: A Bank Resource Guide for Partnering with Law Enforcement and Adult Protective Services provides an overview of the problem—and delves into what banks can do about it.
Here are some of the key points.
How big is the problem?
According to a MetLife Mature Market Institute report, seniors lose $2.9 billion annually due to financial abuse. As the United States population continues to age, with the median age rising from 29.5 in 1960 to nearly 40 as of 2016, the potential pool of victims only increases. Consequently, ABA strongly recommends that bankers focus on building and strengthening partnerships with Adult Protective Services (APS) and law enforcement officials to combat the problem on multiple fronts.
Why is elder financial exploitation growing so fast?
Baby Boomers, Americans born between 1946 and 1964, represent the largest portion of the population and continue to reach senior status in record numbers due, in part, to increased life expectancy. The U.S. Census Bureau estimates that one out of every five Americans will be 65 or older by 2030. So, as a larger percentage of the population ages, more wealth tends to be concentrated among seniors. Unfortunately, fraudsters are keenly aware of the age and wealth connection and seek to target those with resources to exploit.
Bankers are in the best position to spot irregularities quickly.
Seventy percent of all deposits are made by customers aged 50 and older. Bankers see their older customers in branches more than any other age group, and seniors often perceive bankers as trusted advisors.
So bankers should continue to be vigilant and educate their customers about potential fraud. In 2017, the Financial Industry Regulatory Authority (FINRA) issued new rules to guide financial advisors’ conversations with older customers about cognitive decline. These conversations happen between the financial advisor/banker and the customer, their family, trusted contacts and designees throughout the relationship, from account opening to intergenerational transfer of assets.
Intergenerational wealth transfer is happening now from the Greatest Generation (those born between 1910 and 1924) to Baby Boomers. According to an Accenture 2012 report, an estimated $12 trillion is currently transferring between generations. Accenture anticipates an even greater wealth transfer between Baby Boomers and their children over the next 30 – 40 years, with estimates in excess of $30 trillion.
With the stakes as high as predicted, it is more important than ever for bankers to leverage the engendered trust of their older customers. Bankers are in a prime position to help protect their customers from financial exploitation, since they can spot fraud at the onset and can also help prevent it.
What can be done?
Note changes in customer activity. Banks monitor customer activity to detect anything that might be suspicious. Even if frontline employees don’t notice anything, most banks have predictive software that may identify changing patterns and trigger an alert to notify of any anomalous activity, such as increased frequency and amounts of withdrawals, deposits of checks from unknown entities out of the area, first-time requests for payments through wire transfers, money orders or cashier’s checks.
When you notice something, assess the situation to determine whether anything is amiss. The bank should have procedures for handling unusual or possibly suspicious transactions. Those procedures will lay out what you should do.
Depending on the circumstances, banks may consider contacting the customer in the event something isn’t right. This will require you to follow bank policy, which may call for filing an internal report. The bank may decide to file a Suspicious Activity Report (SAR) and possibly even notify law enforcement and/or APS. APS is a social service program provided at the local level and governed by the state or county. APS workers serve seniors and adults with disabilities and investigate abuse, neglect and exploitation cases. Such partnerships improve a bank’s likelihood for success in combatting elder financial abuse.
Protecting seniors as a marketing imperative.
All customers want to feel safe, known, and protected by their banks—especially when they’re at their most vulnerable. As the number of seniors—and senior financial abuse cases—continues to climb, banks will need to position themselves as advocates for the financial protection of seniors.
The new ABA Foundation guide is part of a broader set of resources to help bankers protect their senior customers. Through aba.com/seniors, bankers can register for FinEdLink, a free platform that connects participating banks with senior-focused community groups and agencies that would like a banker-led presentation on senior financial safety.