My grandmother receives calls every couple weeks from someone pretending to be her grandson in trouble and asking her to wire money. If my grandmother were one of the tens of thousands of elderly people who are suffering from cognitive decline, she may fall for this, as she has twelve grandsons. I am thankful that my grandmother still has her mental faculties, but there are many elderly people who are not this fortunate.
In the last few years, financial exploitation of the elderly has become a huge concern, and is actually the most common form of elder abuse. Elder consumers are typically more vulnerable than younger consumers because they are often lonely, are declining cognitively, and have health problems that make them unable to recognize such dangers. The elderly population is also an easy and dependable target for predators as the elderly are more likely to have assets or, at the very least, a dependable source of income.
There is pressure on financial institutions to protect the elderly financial consumers, and banks and credit unions are in an opportune position to be able to be alerted to financial exploitation.
The Consumer Financial Protection Bureau has done a great job laying out certain recommendations that would help banks and credit unions be more likely to recognize and detect such abuse in their March 2016 "Advisory for financial institutions on preventing and responding to elder financial exploitation." The recommendations are as follows:
- Develop, implement and maintain internal protocols and procedures for protecting account holders from elder financial exploitation.
- Train management and staff to prevent, detect, and respond to elder financial exploitation.
- Detect elder financial exploitation by harnessing technology.
- Report all cases of suspected exploitation to relevant federal, state and local authorities.
- Protect older account holders.
- Collaborate with other stakeholders
There are many recommendations within each of these general guidelines, but the important thing to know is that the elder financial exploitation risk is growing as technological accessibility continues to improve. All banks need to be aware that there is a problem, but there is also guidance, from groups such as the Consumer Financial Protection Bureau.