Elder financial exploitation: Confronting a chronic challenge

By Sam Kunjukunju

Elder financial exploitation, or EFE, is occurring at epidemic proportions. The Consumer Financial Protection Bureau defines EFE as the illegal or improper use of an older person’s funds, property or assets, leading to billions of dollars in losses each year. The Federal Trade Commission estimates consumers lose as much as $48.4 billion annually to these crimes, while AARP’s research indicates that losses per person average $120,000.

Perpetrators of EFE fall into two main categories: known and unknown suspects. Known suspects are trusted individuals, who may include family members, non-family caregivers, business associates, neighbors, friends and others. Unknown suspects, on the other hand, involve strangers who deceive older people into transferring money to them for promised goods, services or financial benefits that do not exist (i.e., scams).

EFE survivors may suffer irreparable harm. Along with the financial losses, survivors often experience intense feelings of fear, shame, anxiety and depression. They may end up losing their homes or even incur unexpected tax implications from such abuse. Further cases of suicide among older victims are also increasing. So, addressing EFE is vital.

Fortunately, there are ways to help. Bankers can and often do make profound differences in safeguarding seniors. The American Bankers Association, in collaboration with its non-profit foundation — the ABA Foundation — works to help bankers protect older customers through a multifaceted approach that emphasizes:

• Training on how to recognize, respond and report EFE. We provide an online self-paced course for bankers to access through ABA’s Frontline Compliance Program, which is free for member banks. We also host numerous webinars and conference panels with experts each year to explore the issue and discuss solutions.
• Consumer education to help older people learn about how to recognize and prevent EFE. We provide bankers with access to free materials to lead in-person workshops and disseminate information online through the ABA Foundation’s national Safe Banking for Seniors campaign.
• Partnerships with law enforcement and adult protective services. Banks cannot tackle this issue alone. Protecting older people takes concerted and collaborative community efforts. ABA Foundation partners with numerous agencies on this issue and developed the Protecting Seniors guide to encourage bankers to facilitate local connections in their bank’s footprint.
• Technology to help banks identify irregular transactional patterns that may be indicative of financial exploitation. The ABA Partner Network includes vendors with software solutions to help banks tackle all types of fraud, including EFE.

Additionally, ABA Foundation is inviting bankers to participate in our inaugural Elder Fraud Prevention Summit, a one-day, in-person event Oct. 7 in Arlington, Virginia, right outside of Washington, D.C., immediately before the ABA/ABA Financial Crimes Enforcement Conference, Oct. 8-10, hosted by the American Bankers Association and the American Bar Association. That event will feature speakers from AARP, Adult Protective Services, the Department of Justice, the Federal Bureau of Investigation, the Financial Crimes Enforcement Network, the National Center for Victims of Crime, as well as bankers and more to help the industry combat EFE. Register at aba.com/efsummit.

For more information on how to access everything ABA Foundation offers bankers on these challenges, please check out our resources at www.aba.com/OlderAmericans.

Sam Kunjukunju is VP, consumer education at American Bankers Association.