Every year, millions of older Americans lose significant portions of their life savings to elder financial exploitation, and the problem is only growing.
According to a report conducted by the AARP, older adults over the age of 60 lose approximately $28.3 billion each year as a result of elder financial exploitation — an amount that extends far beyond the victim, consequently affecting families, caregivers and, even, taxpayers. As a pervasive issue impacting millions of older Americans each year, the Tennessee Credit Union League would like to bring special attention to elder financial exploitation for Elder Abuse Awareness Month.
Observed in June, Elder Abuse Awareness Month focuses on the abuse and neglect that elderly and vulnerable adults may face, including physical abuse, emotional abuse, sexual abuse, neglect and financial exploitation. Per the Center for Elder Justice and Education, “one in 10 Americans age 60+ have experienced one form of elder abuse.”
Elder financial exploitation, one form of elder abuse, is defined as someone illegally or improperly using an older person’s money or belongings for their own personal use. In a statement provided by the United States Government Accountability Office, older adults are “financially exploited by strangers who inundate them with mail, telephone or internet scams; unscrupulous financial service providers; and untrustworthy in-home caregivers.” Elder financial exploitation can be carried out by perpetrators through various forms, such as:
Strangers
- Lottery, mail, telephone or internet scams
- Door-to-door home repair scams
- Identity theft
- Romance scams
- Charity schemes
- IRS schemes
Financial Services Providers
- Sale of fraudulent investments (Ponzi or pyramid schemes)
- Sale of financial products or services unsuitable for an older adult’s circumstances, such as long-term annuities
Family, Friends, Caregivers or Legal Guardians
- Theft of cash or other valuables
- Withdrawals from banks accounts or use of credit cards
- Transfer of deeds
- Misuse of an older adult’s power-of-attorney
- Misappropriation of an incapacitated older adult’s income or assets
- Identity theft
If we are aware of it or not, regardless of age, many of us have been a target of at least one of these schemes. For example, you might have been a recent target of the “unpaid toll road scam,” which threatens to issue you a fine or suspend your vehicle registration if you do not pay your toll immediately. If you were not aware of scams like this, the text message could appear very convincing, mimicking the look of a legitimate toll agency or government body, making it easy for people – especially for older adults – to fall for the scam when they are unaware that an actual toll violation may not even exist.
Credit Unions Play a Vital Role in Stopping Elder Financial Exploitation
Despite the ongoing prevalence of elder financial exploitation, only one in 24 cases are actually reported to authorities due to victims’ sense of shame or embarrassment. As a result, credit unions have a responsibility in recognizing the signs of elder financial exploitation to prevent these crimes from happening to its older membership. In recommendations provided by the Consumer Financial Protection Bureau, financial institutions can help identify, prevent and respond to elder financial exploitation by instituting the following practices:
- Developing effective governance and oversight, including policies and practices to protect account holders and the institution;
- Training employees on recognizing and responding to elder financial exploitation;
- Placing transaction holds and disbursement delays, as appropriate, and consistent with applicable law;
- Establishing a trusted contact designation process for account holders;
- Filing suspicious activity reports to FinCEN;
- Reporting suspected elder financial exploitation to law enforcement, Adult Protective Services, and other appropriate entities;
- Providing financial records to appropriate authorities where consistent with applicable law;
- Engaging with elder fraud prevention and response networks; and
- Increasing awareness through consumer outreach.
Elder Abuse Awareness Month
As you get ready to prepare for Elder Abuse Awareness Month, consider how your credit union is protecting its membership’s financial security. Are you providing training for employees; hosting some sort of community outreach; or promoting simple services like mobile banking alerts? Whatever you choose to do, share with us so, together, we can safeguard our members’ financial safety and well-being.
More Information
- Download graphics for World Elder Abuse Awareness Day from the National Center on Elder Abuse.
- Visit the League’s resources on financial exploitation.
- Encourage members to visit SafeSeniorTN, a new site featuring resources and videos to help protect seniors. It began in February. Here’s more information about its launch.
- Save the date for the Tennessee Elder Justice Conference, Aug. 17-19.
