Banks can help fight fraud against seniors
By Mary Beth Franklin
Maturity News Service
Older people have long been a target of con artists. Yet a lesser known but perhaps far
more prevalent problem is beginning to gain attention - fleecing of the elderly by family
members or care givers.
Seniors being defrauded by people they trust "is a hidden problem that is growing
rapidly as the nation's population ages," said Jan Walsh, a Certified Financial
Planner who specializes in retirement planning at the National Endowment for Financial
Education in Denver.
The National Center for Elder Abuse in Washington, D.C., reports that financial
exploitation accounts for about 12 percent of all reported elder abuse cases. And that's
just the tip of the iceberg, experts say, since abuse cases often go unreported because
the victims are ashamed or embarrassed. Sadly, the abuser is often a close relative.
When victims don't report a crime, it can be hard to detect. In many cases of fraud
against the elderly, banks are in a unique position to spot the problem. For that reason,
in some states, banks are enlisting in the fight to protect older customers against fraud
In a model project in Massachusetts, for example, the state office of elder affairs,
together with the state attorney general and office of consumer affairs, is teaching bank
employees how to recognize and report financial exploitation of elderly customers.
The state secretary of elder affairs, Franklin P. Ollivierre, said the Massachusetts
plan was already widely used throughout the state and had been replicated on a smaller
scale in New York, Kentucky, California and Washington. He hopes the Bank Reporting
Project eventually will be used nationwide.
In the program, bank employees are taught to look out for banking activity that is
inconsistent with a customer's usual habits. For example, warning signals should go up
when there are large withdrawals from a previously inactive account or withdrawals or
transfers from a recently opened joint account.
Suspicious signatures on checks or documents such as credit card applications should
also serve as a red flag to bank employees.
When a senior's account show frequent withdrawals from automatic teller machines
(ATMs), especially if the person is physically frail and has not previously used an ATM,
that's another sign that someone should investigate.
The Bank Reporting Project cautions bank employees to be on the lookout for elderly
customers accompanied by another person who seems to coerce them into making withdrawals
or who does not allow them to speak for themselves.
Elderly customers who appear nervous, give implausible explanations of why they need
the money or seem confused about missing funds may be victims of fraud, theft or
Financial crimes against the elderly can take many forms.
Title to a home or other assets may be transferred to the abuser and then sold; funds
from checking, savings or investment accounts may be withdrawn without authorization;
wills may be changed as a result of intimidation. Loans may be taken out and the funds
given to the abuser, or benefit checks from pensions or Social Security may be signed over
to the abuser who cashes them.
"Often the abuser is someone who becomes the agent of an elderly person through a
power of attorney and then transfers assets for his or her personal use," said
planner Jan Walsh, who serves as an adviser to the National Council on Aging.
To reduce the risk of financial abuse, Walsh suggests these precautions:
Limit powers of attorney. A power of attorney - a legal document authorizing a person
to perform certain legal or financial actions on someone else's behalf - is often used to
steal a person's financial assets. Before making out a power of attorney, make sure the
agent is someone who can be trusted. Limit the agent's authority and consider requiring an
annual report of income and expenses to an outside party such as a lawyer or financial
- Use direct deposit for Social Security or other benefit checks. This reduces the
opportunity for theft, though funds can still be at risk if the abuser is a joint owner of
- Use automatic bill paying. Routine bills can be automatically paid for elders from a
checking or savings account. Or a bill-paying service can be hired.
- Communicate with the bank. Banks are often the first to see questionable financial
activity and can alert the elder or a relative to any suspicious activity on an account.
- Check care giversreferences carefully. Anyone hired to provide care should be thoroughly
- Be wary of a care giver who tries to isolate an older person. It is tougher to commit
fraud when the prospective victim is in regular touch with friends and family members.