Financial exploitation of the elderly is a serious problem that is hard to recognize but important to address. It can have a large financial impact, on average costing each victim thousands of dollars. Credit unions can play an invaluable role on the front lines of the fight against elder financial exploitation when employees are properly trained to know how to spot such crimes.
Whether it is a consumer scam, or family members or caregivers taking advantage of the elderly person, the financial impact to those late in life is long lasting. Unlike physical abuse, which can often be easily recognized, financial exploitation isn’t always obvious to outside observers. Nor is it exclusive to wealthier individuals; it frequently happens to low-income people as well.
It is vital to understand elder exploitation – the illegal or improper use of an older person’s funds, property or assets – in order to detect and report it properly.
Credit unions can help, thanks to their established member relationships. In some cases, a credit union employee may be the last line of defense.
Many victims of financial elder exploitation are targeted because of their mental and or physical vulnerabilities. It can be hard for them to understand the abuse or speak about it, especially if the abuser lives with them and limits outside contacts.
But financial exploitation can also be carried out by strangers or corrupt businesses. These types of risks typically involve scams. For instance, a senior may be contacted by phone or email and told they have won a lottery, but to claim their prize they need to send in a tax payment. A bogus charity might convince the individual to make a large donation. Or a caller may pretend to be a relative, such as a grandchild, who is in danger and needs funds immediately.
What to Look For
Red flags that may be a sign that financial exploitation is taking place:
- Large increases in account activity, such as daily maximum currency withdrawals;
- Uncharacteristic lapses in payments for services;
- Abrupt changes to financial documents;
- Excessive numbers of payments or payments of large sums to caregivers or other third parties;
- Uncharacteristic non-sufficient funds activity or overdrafts;
- New account use immediately after adding an authorized user;
- New activity on an inactive or joint account;
- Uncharacteristic requests to wire money;
- An older member appearing distressed, unkempt, or unhygienic;
- Questions about international wire transfers;
- Mentions of sweepstakes or lottery winnings.
It may seem “rude” to ask a member what they intend to do with a withdrawal, but this information could be critical. It needs to be done diplomatically and in a caring way. Also, it should be done privately, one-on-one, if the member has come to the credit union with other people.
If a credit union employee suspects elder exploitation, they can query a particular transaction to help understand whether the suspected victim is able to advocate for their own interest or if they seem vulnerable. They might offer to connect the member to other community resources. Or they can move on to more serious steps, such as filing a suspicious activity report (SAR), a police report, or other action.
Whatever steps they take, credit union employees need to consult their own internal policies and procedures.
SARs, which are completely confidential, are an important tool that the authorities can use to evaluate suspicions of exploitation for potential prosecution. You also want to be aware of what requirements you may have under state law. More states are starting to pass legislation that consider financial institutions and their employee’s mandatory reporters. It is important to understand those rules and how to report any suspected exploitation to the proper authorities.
As members age, they become more vulnerable to elder abuse and exploitation. Credit unions have a responsibility to properly train their employees so they not only keep the interests of these members in mind, but remain vigilant in watching for red flags and other signs of abuse.