Nearly five million older Americans are abused each year, creating an estimated $36.5 billion annual loss for victims. Financial exploitation occurs when one person misuses or takes the financial assets of a vulnerable adult for his or her benefit. This happens most often to adults who are elderly, disabled or both.
Here are some of the main types of financial exploitation, as well as red flags you and your credit union staff should be able to recognize.
Types of Financial Exploitation
There are many types of elder financial abuse, with new schemes and scams being concocted frequently to trick elders and vulnerable adults for personal gain. While not comprehensive, the following is a list of the typical types of elder abuse observed, in many cases perpetrated by a family member or caregiver:
- Property theft
- Misuse of income or assets
- Forged checks
- Fraudulent use of Power of Attorney privileges
- Lotteries and phony contests
- Phony solicitation from charities
- Investment fraud
- Medical scams
- Contractor scams
- Grandparent/grandchild imposter emergency scams
- Sweetheart or romance scams
Credit unions are community-first financial institutions. This means credit union employees have a responsibility to recognize elder financial exploitation. Tellers and member services staff interact with members in close quarters every day, offering many opportunities to become the first line of defense against fraudulent activity.
Do your employees know how to recognize the red flags of financial exploitation? Here are some things to look for.
Red Flag: Uncharacteristic Banking Activity
There may be unusual shifts in the senior member’s banking activity compared to the past. These shifts may include frequently changing transactions from one branch to another, changes in frequencies of withdrawals, larger than normal withdrawals, or transfers from recently opened joint accounts or previously inactive accounts, and frequent ATM withdrawals, especially if the member is isolated or has not accessed an ATM recently.
If you or your employees notice a marked shift in the banking activity of an elderly member, it’s good to note these changes in case further action needs to be taken in the future.
Red Flag: Suspicious Signatures
Sudden changes in signatures and inconsistencies in the handwriting on checks, withdrawal slips, or applications are often indicative of fraudulent activity.
Though often an elderly member will have health or wellness changes that require others to help them with normal activities, like writing, it’s important to pay attention to the other red flags listed here as well. If a signature change is caused by a change of circumstance, there may be no cause for suspicion, but if other activities and behaviors accompany this signature change, you may be witnessing financial exploitation.
Red Flag: Sudden Debt Increase
Sudden debt increases can also be a sign of fraud. Watch for a senior or another vulnerable adult member at your credit union who has a large loan and takes out a second mortgage, takes out a loan on top of an existing mortgage, or sudden large amounts of credit card transactions without any change in the elder member’s living or financial situations.
Red Flag: Suspicious Behavior
There are also a number of suspicious behaviors exhibited when an elder member is being financially exploited. Be on the lookout for these signals and contact a supervisor immediately if any of these behaviors are observed:
- There is suddenly someone else handling the member’s financial affairs with no apparent benefit to the member
- Bank statements and checks are no longer being sent to the member’s residence
- The member is accompanied by a stranger
- Withdrawals of large amounts of cash
- The member is coerced into making transactions
- The member is not allowed to speak for themselves or make decisions
- The accompanying acquaintance appears far too interested in the member’s finances
- The member seems nervous or afraid of the person with them
- The member is concerned or confused about “missing funds” in their accounts
- The member is unable to answer questions or confused about financial transactions or signing paperwork
- The member is fearful they will be evicted and/or institutionalized
- The member appears neglected or looks to be receiving insufficient care given their financial status
- The member has bruising, broken bones, or other signs of physical abuse.
Reporting Financial Exploitation
Tennessee is a mandatory reporting state. If you see or suspect that an adult is being abused, neglected, or exploited, you must report it. Call the Tennessee Department of Human Services Adult Protective Services unit at 1-888-APS-TENN (1-888-277-8366), report suspected abuse online, or contact your local law enforcement agency.
We Care About Your Credit Union
It is our mission at the Tennessee Credit Union League to promote and support the success and advancement of credit unions in meeting their service and structural goals. This includes providing solutions and products to help your credit union create a safe, helpful, and reputable business to better serve your communities.
To learn more about elderly and vulnerable adult financial exploitation prevention and response, check out our advocacy page.