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Senior man on computer reading a credit union newsletter about elder financial exploitation

Is Your Credit Union Aware of Elder Financial Exploitation?

Senior citizens are one of the fastest-growing demographic groups across the country. In Tennessee alone, they will account for more than 24% of its population by the year 2030. This is a jump of almost 27% from 2012, according to the U.S. Census bureau. As your credit union’s membership ages, addressing the challenge of elder financial abuse is critical.

“Older Americans lose at least $36.5 billion each year to financial abuse.”

– The National Council on Aging

Credit unions pride themselves on being able to protect the assets of all of their members. This duty also involves reporting to authorities when red flags of financial exploitation are detected.

Many abusers aren’t reported because victims rely on them for assistance with their daily life. Frontline staff, such as tellers and Member Services employees, regularly interact with members. They are in a unique position to notice and take action when fraud is suspected.

In 2017, Tennessee passed legislation known as the “Elderly and Vulnerable Adult Financial Exploitation Prevention Act”. It encourages financial institutions to submit timely reports on suspected fraud and abuse involving elderly and vulnerable adults.

This law empowers credit unions and its staff against the growing problem of elder financial abuse. Whether they have actual knowledge or just “reasonable cause”, staff are afforded the authority to refuse or delay a transaction. They are also authorized to refuse to accept an acknowledged power of attorney.

But how can staff develop the skills needed to spot these signs and ensure older Americans are not taken advantage of?

Empowering Frontline Staff Against Financial Exploitation

Your credit union employees can help stop the exploitation. AARP’s BankSafe online training platform is an essential tool that should be in your arsenal. It empowers staff with the information needed to better understand older adults and identify signs of elder financial abuse. It also helps them take the necessary steps to protect their assets.

It includes true-to-life scenarios, interactive modules, bite-size training activities, and allows users to study at their own pace. This digital course is the result of a collaboration with AARP and more than 200 bank and credit union experts. Best of all, it’s free.

Raising Awareness Among Employees And Members

To supplement training programs, regularly remind staff to be on the lookout for red flags.

Signs of suspicious behavior include, but are not limited to:

  • unusual banking activity
  • large withdrawals or transfers to other accounts
  • forgeries on checks or other legal documents
  • evidence of physical abuse
  • a drastic and sudden increase in debt
  • changes in property titles or other financial document

If possible, educate staff by giving actual or realistic examples based on member experiences.

Launching information campaigns targeting members and their families can help put a stop to fraud as well. Share the trends in elder financial abuse through social media posts, emails, physical mailers, or flyers. Provide examples of methods used so they know what to watch out for.

Policies are fundamental to regulatory compliance. Instituting effective policies shows how committed credit union leadership is to mitigating the risk of elder financial abuse. Read a comprehensive sample policy by downloading our white paper below.

“Individuals 50+ are susceptible to fraud and financial exploitation
in part because they own 67 percent of U.S. bank deposits.”

– AARP Public Policy Institute

Tennessee: A Mandatory Reporting State

In Tennessee, everyone is a mandatory reporter. Seeing or even merely suspecting that an elderly or vulnerable adult is being exploited should prompt quick action. You are required to file a report immediately to federal, state, and local authorities.
Credit unions and banks are often concerned about state and privacy laws. Staff are instructed to be mindful that they don’t violate laws that prohibit the disclosure of a member’s financial records. Reporting to Adult Protective Services (APS) or law enforcement is covered by several exceptions.

The Financial Services Modernization Act of 1999, also known as the Gramm-Leach-Bliley Act, contains several privacy provisions. The disclosure of suspected elder financial abuse by a financial institution, its directors, officers, employees, and agents falls within its exceptions.

Tellers and Member Services are the first line of defense. Does your frontline staff member believe there is no reasonable explanation for a transaction? His or her next step is to file a Suspicious Activity Report (SAR) to FinCEN. The SAR should include comprehensive details of suspicious financial exploitation activity.

FinCEN published an advisory that can help your credit union staff file SARs regarding elder financial abuse.

To learn more about how your credit union can address this growing issue, download our white paper on elder financial exploitation.

Additional Resources:

2022 Elder Abuse Task Force Report – Tennessee Commission on Aging
Spotting Red Flags – AARP
Asking the Right Questions – AARP
Know Suspicious Activity When You See It – AARP

If you suspect abuse of an elderly adult:

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