Controlling Financial Elder Abuse: Whose Responsibility Is It?
by: Sara Cottle, Operations Manager, Chippewa County Credit Union & The Cooperative Trust
When I was eleven years old, before the days of caller ID, when only rich people had cell phones and we still had to stand within feet of the wall mounted device to make a call, I answered the telephone and was greeted with the question, “Is your refrigerator running?”
Naive and a little taken off guard with such a question I replied with, “I dunno, let me check.” Holding my ear up to the fridge, I replied, “Yup, it’s running.”
My antagonist promptly responded with, “Well you better go catch it!” followed by laughter and the hollow click of the receiver on the other end.
I slowly placed the phone back in its cradle, my mouth agape, wondering how in the world I just fell for such a low trick.
Fast forward twenty years to the present. I approach every phone call with the same level of trepidation. I won a free trip to the Bahamas? No thanks. You’ll give me free cash for taking your survey? Nope. I’m fine, thank you. I inherited a windfall from a Nigerian Prince? Um, I don’t think so. I learned my lesson – trust no one.
Why is it that Gen X’ers and Gen Y’ers are so good at screening out fraud while our parents and grandparents aren’t? It’s become such a problem, there’s an entire section written in the Dodd-Frank Act addressing financial elder abuse. Guidelines are being hashed out to hold financial institutions and their staff responsible if it’s not reported properly.
According to an article written by the Consumer Financial Protection Bureau, seniors lost $2.9 Billion to fraud in 2010. It is definitely a problem. The real question is: Whose responsibility is it?
Currently, there are eight states that require mandatory reporting by financial institutions for possible financial elder abuse: Florida, Mississippi, Georgia, Arkansas, Hawaii, Kansas, New Mexico and California. Other states, like Michigan, have proposed house bills addressing elder abuse.
The Michigan Credit Union League (MCUL) published a bulletin to their website warning credit unions of the effects of mandatory reporting for elder abuse. Some of the possible effects noted by MCUL are:
- Criminal penalties against individual tellers for failure to report
- Statutory penalties on the financial institution for failure to report
- Financial institution liable for claims of negligence
- Over reporting
- Violation of state privacy laws
It is the duty of credit unions and the duty of our communities to educate our members about the ever growing possibility of fraud. It is not the financial institution’s responsibility to invade consumer privacy and report every transaction that doesn’t morally or socially fit in with what we believe is appropriate. Credit unions are not responsible for creating a hard line between the intentional bad decision of a grown adult and the manipulation of a senior citizen who has been tricked into giving an untrustworthy source his or her personal information.
Seniors are getting more tech savvy, more involved in their communities, and they’re living longer now than ever before. Instead of finding blame, we should work with our senior members and their children (and, yes, grandchildren) to share valuable insight about fraud in all its forms – online, over the phone, and in person. That way, no one needs to worry that their refrigerator is running.
Sara Cottle is the Operations Manager at Chippewa County Credit Union, a $25M SAS credit union. She has been part of the credit union movement for 13 years earning her CCUE as a 2010 Graduate of CUNA Management School. Currently she is a Non-Traditional Student of Business Entrepreneurship at Lake Superior State University, Cooperative Trust member and Legislative Affairs Representative for the UP Chapter of Michigan Credit Unions.
The Cooperative Trust is a grassroots group of young people working in credit unions and cooperatives. Founded in 2010, they connect and enable those fighting for the future of socially-responsible finance. For more info, or to join, visit them at www.trust.coop.
