By Lucy Wyndham
It is estimated that seniors lose anywhere from $3 billion to $37 billion every year due to financial abuse, according to studies cited on CNBC.com. This can occur in the form of con artists, thieves or—most surprisingly—trusted family members. Currently, a lot of these crimes go unreported. Often, it’s because victims feel ashamed, but also regulators and banks aren’t always spotting it. While Texas leads the nation in protecting seniors from financial abuse, there is still plenty more that can be done in the Lone Star State and across the nation. Banks can take steps to spot senior financial abuse and prevent it, helping to save vulnerable elders thousands of dollars.
Develop better training and procedures. Many banks are implementing more aggressive fraud-prevention initiatives, largely as a result of people living longer and a considerable number of them developing dementia as seniors. Bank tellers are being trained to flag potential suspicious behavior, including frequent withdrawals of large amounts of money and coercion by family members. The banks’ proactive approach is likely to benefit senior customers significantly, not to mention financial institutions. In fact, 16 states have already enacted various versions of the North American Securities Administrators Association’s model rule, which mandates that financial advisers report suspected abuse of the elderly or vulnerable.
Help seniors use technology. The majority of seniors don’t fully grasp the latest technologies and, frankly, many of them don’t want to. But this doesn’t mean that banks can’t help seniors with technology to perform simple, but important, tasks like setting up smartphone alerts for their credit cards so that they know whenever bank withdrawals are made. This can be as simple as a text going to their phone or a trusted family member’s phone. If he or she has a power of attorney over the finances, this is a good person to have receive any alerts. These simple texts can keep track of financial transactions, which helps to spot senior financial abuse quickly.
Help educate seniors. Banks can provide seniors with information to help them protect themselves. It’s important to cater to the way seniors tend to bank, while also making them aware of how technology can be used against them. This includes actions such as advising seniors to shred receipts and bank statements, keep their checkbooks and sensitive information under lock and key, and pay with checks, credit cards or debit cards instead of cash in order to leave a paper trail. Seniors also need to be made aware of financial scams that are common online and over the phone, and be reminded often never to provide personal information, such as their Social Security number or any financial details, to callers they do not know or websites that request such information.
Foster good relationships with senior clients. Banks and financial advisors should build relationships with senior clients so that they become familiar with their financial activity, which can help them to spot anything suspicious. This relationship with the bank and its advisors will help seniors feel confident before signing any documents that they may not understand.
Inform seniors about other account types. Those who hold all of their money in one account—regardless of age—are at a higher risk of financial abuse because they can be completely wiped out with minimal transactions. Seniors are more likely to have all of their finances in one basic account, as there weren’t as many options and different types of accounts when they set up the account with their bank, perhaps many decades ago. Banks should inform seniors of the account options available. For example, they can move some of their money into a savings account that doesn’t include a card to access it, making it harder for scammers to breach. These accounts can require dual signatures to access money, helping to protect savings. Limits can also be set up on some accounts to prevent large sums from being withdrawn. This is a particularly good option for accounts to which caregivers have access.
Seniors are one of the most vulnerable groups when it comes to financial abuse, often because they tend to have a large amount of savings and can more easily be conned by technology or even a friendly face. Banks are starting to address these problems more aggressively, in part by simply reporting suspicious behavior and nurturing good relationships with their senior customers.
Lucy Wyndham is a freelance business writer based in Beaumont, Texas.