Older, but not always wiser

Whether online or in person, 20 percent of older Americans are victims of financial abuse every year. Community banks can provide a strong line of defense.

By Colleen Morrison

In a day, it’s all gone. An 85-year-old woman files her taxes. When she receives an email from accounts@irsgov.com asking her to confirm her bank information, she inputs it. Her bank account registers $0 by the next morning.

According to the Consumer Financial Protection Bureau (CFPB), one in five older Americans is a victim of financial exploitation. But it’s not just an online problem; the National Adult Protective Services Association estimates 90 percent of abusers are family members or trusted others.

“One of the most common forms of elder abuse we see is when aides take advantage of seniors. All of a sudden, the aide has a new car, or has use of the senior’s debit card, or is signing their checks or taking over their financials,” notes Carole Feeney, assistant vice president at the Community Bank of Bergen County, N.J., a $342 million-asset institution based in Rochelle Park, N.J.

“Seniors lose their healthy sense of skepticism, and that makes them prevalent as a target,” says Lori Millar, vice president, marketing and communications at CRA Partners, a compliance program powered by the Senior Housing Crime Prevention Foundation. “Fraudsters say, ‘If you don’t give us the money now, we’ll send a collection agency.’ This is the most frequent example of financial exploitation.”

But how can community banks comply as fraud attacks on older Americans escalate? Experts believe continuing education is the key.

“Share information,” says Colleen Tressler, senior project manager, Division of Consumer and Business Education, Federal Trade Commission. “Older consumers listen to a trusted source. They have a long-term relationship with you and trust your institution and what you have to say.”

Preying on trust
Older people are targeted by fraudsters in all sorts of ways. Here, we’ve highlighted the 10 most prevalent.

1. Medicare/health insurance scams: In a 2016 report, The Medicare Fraud Strike Force had 2,185 indictments against Medicare fraudsters, who falsely assume the identity of a provider or Medicare representative and demand payment for services.

“Seniors lose their healthy sense of skepticism, and that makes them prevalent as a target.”
­—Lori Millar, CRA Partners

2. Counterfeit prescription drugs: Seniors may seek ways to obtain less-expensive drugs, by ordering online and receiving placebo or modified drugs in place of prescriptions. In 2015, the FDA reported that a multi-country effort took down more than 2,400 websites selling counterfeit or dangerous illegal medical products.

3. Funeral and cemetery scams: These scams may be committed by strangers alleging the deceased had outstanding debt. They also may result when funeral directors charge for unnecessary services. The FTC’s “Funeral Rule” details consumer rights.

4. Fraudulent antiaging products: The FBI reports, “Senior citizens are more interested in and susceptible to products promising increased cognitive function, virility, physical conditioning and anticancer properties.” Fraudsters take advantage by promising unobtainable results for a fee.

5. Telemarketing and phone scams: “Our research shows telemarketing fraud is still a big problem,” says Tressler. Telemarketing and phone scams use a sense of urgency to collect payment information in real time.

6. Internet fraud: From email and phishing to tech-support scams, as seniors engage digitally, fraudsters take advantage. Tressler says, “While older consumers may be using tablets and computers, they may not fully understand how they work and how divulging certain information may make them more vulnerable.”

7. Investment schemes: This plays on seniors’ financial dreams. Feeney sees it firsthand at her community bank. “Our older customers want to make that extra money to leave for their children, and they just fall for it. They are so trusting,” she says.

8. Homeowner/reverse mortgage scams: Targeting a population that may be looking to sweeten retirement, fraudsters impersonate lenders and offer deals in exchange for immediate payment. With the National Reverse Mortgage Lenders Association reporting that the Reverse Mortgage Market Index reached an all-time high in 2016, these scams may become more prevalent.

9. Sweepstakes and lottery scams: These scams feed on the excitement of winning. Fraudsters send a check with instructions to wire slightly less than the amount of the check to subsidize processing. The money goes out, and the check bounces. “The multitude of checks we get from ‘lottery winners’ is astounding. We have to tell them it’s fraud,” Feeney says.

90% of the financial abusers of elders are family members or trusted others

10. The grandparent scam: In this instance, a caller pretends to be someone’s grandchild, asks for money to be sent, and begs the “grandparent” not to tell anyone. Millar says, “The ‘grandchild’ has a gambling or other addiction problem and ‘grandma’ has the money. It breaks my heart, but we hear about this every day.”

If you suspect a customer is being subjected to any form of elder financial abuse, you should file a report with the appropriate Adult Protective Services agency and law enforcement, as well as a Suspicious Activity Report with FinCEN.

In the battle against elder financial exploitation, community banks stand on the front lines, working to prevent fraud. The next time accounts@irsgov​.com emails a customer asking for bank information, he or she will know to press delete.

Colleen Morrison is a writer in Virginia.