As elder fraud becomes more prevalent throughout our society, the Consumer Financial Protection Bureau issued recommendations for financial institutions to protect their members.
Financial exploitation is the illegal or improper use of a person’s funds, property or assets, and is the most prevalent form of elder abuse. This is because older consumers often have significant assets, equity for their homes and regular source of income like Social Security or a pension. They are also vulnerable to become a victim of elder abuse due to health and mental problems, isolation and cognitive decline. While many seniors admit that they have been a victim, few cases are ever presented to protective services.
Most older consumers prefer face-face transactions when it comes to their banking which means they rely on tellers when it comes to their savings and checking accounts. Fortunately, financial institutions are equipped to protect, detect and act properly when members are targeted and victimized. This includes reporting suspected financial exploitation which is mandatory under many states’ laws.
The CFPB issued recommendations to financial institutions when it comes to handling financial exploitation. Their first recommended step is to train staff to recognize this type of abuse which includes preventing, detecting and responding to suspected abuse.
The next step is to use fraud detection technologies to pick up on suspicious account activity and products associated with elder fraud. Systems should be in place to review members account patterns and risk factors associated with financial exploitation. Even though some fraud may not follow the pattern of suspicious activity most often seen, it may still be unusual for an individual’s account.
Age-friendly services are also important when it comes to protecting accounts. Some of these features may include opt-in limits on cash withdrawals, alerts for specific account activity, view-only access for authorized third parties and advanced consent to share account information with someone they trust when their account may be at risk.
Lastly, suspicious activity should be reported to authorities as soon as possible, no matter if it is mandatory or voluntary under state or federal laws. Financial institutions can work closely with law enforcement to improve prevention and response which may include expediting document requests and providing them at no charge.
Financial institutions are able to report suspected abuse to authorities without violating the privacy provisions under federal banking laws. If it is suspected that a loved one has become a victim of abuse, visit eldercare.gov in order to find local adult protective services agencies.
Take the proper steps to ensure your accounts are safe and protected and that your loved ones are not taken advantage of.