By Glynn Smith
Senior exploitation is a complex and, sadly, increasingly prevalent issue facing us today.
Financial institutions have become more aware of a wide variety of scams being perpetrated against their elderly customers. According to a 2011 MetLife study, elderly consumers suffered approximately $2.9 billion in losses in 2010. Further, a Virginia State Crime Commission study showed an 8.6-percent increase in total financial crimes from 2001 through 2007 but an increase of 18 percent for victims 65 years and older.
There are numerous red flags that should trigger a banker’s concern regarding financial exploitation of the elderly. The Financial Crimes Enforcement Network, American Bankers Association and other organizations have published lists of red flags that may indicate financial exploitation.
These include: accounts being overdrawn; forgeries; large cash withdrawals; new signatories or powers of attorney on an elderly customer’s account; and unusual, out-of-pattern withdrawals, especially from ATMs. In-person visits to the bank, where someone who accompanies the elderly customer does all of the talking, also can signal possible trouble.
As these red flags become apparent, steps should be taken to either confirm or dismiss concerns of exploitation. If something looks out of the ordinary, the most important thing for a banker to do is ask more questions. Inquire why the customer or the customer’s agent is making the transaction; compare the account history and transaction patterns with the request.
Speak with others who may be more familiar with the customer’s normal banking habits. If the concerns persist, branch representatives should contact the security department at their bank. The bank may then contact law enforcement and/or adult protective services and file a suspicious activity report if applicable.
While banks can play an important role in helping to protect elderly customers from being exploited, banks face many challenges in reporting suspected exploitation to authorities. It is difficult, for example, to judge the capacity of elderly customers to act for themselves and to make sound financial decisions.
It may be tough to determine if a customer is acting on their own or being influenced by someone else. When asked about a suspicious transaction, elderly victims often will shade the truth because of embarrassment, threats or dependence on the perpetrator.
Banks also are bound by law to guard their customers’ confidential information and abide by privacy regulations. Gramm-Leach-Bliley Act regulations restrict the disclosure of nonpublic bank information. At the same time, under the Bank Security Act, banks are required to report suspicious activity if certain circumstances and dollar thresholds are met.
Because financial exploitation of the elderly is a growing problem, banks are continuing to develop and implement strategies to identify potential cases of financial exploitation. It is only through these continued efforts that we will be able to protect our customers and the bank.
– The writer is a corporate security office investigator at Burke and Herbert Bank.