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Elder abuse: the crisis among veterans and ways to prevent elder fraud

Terri Luttrell, CAMS-Audit
November 7, 2022
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Elder fraud prevention and education

Learn strategies for recognizing and reporting elder fraud and exploitation. 

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Veterans
A growing target for elder fraud and exploitation

As Veteran’s Day approaches, people across the U.S. will reflect on the sacrifices made by men and women who served their country. But while we cherish veterans and revere them for their bravery, many of them are facing a new enemy—elder abuse. Elder abuse is an intentional act or failure to act that causes or creates a risk of harm to an older adult. The definition of an older adult is determined at the state level, but most include adults above the age of 60 and those with disabilities.

According to the U.S. Department of Justice, national studies find that over 10% of older adults are victims of elder abuse annually, and a growing number of military veterans fall into this category. Fifteen percent of the over-60 population are veterans, and according to the National Council on Aging (NCOA), there are over 11 million veterans in the older adult category. These men and women are prime targets for elder abuse, specifically elder financial exploitation, or elder fraud.

Elder fraud occurs when a person misuses or takes the assets of a vulnerable adult for their benefit and:

  • Without the explicit knowledge or consent of the individual
  • In a manner that deprives the individual of vital financial resources for personal needs
  • Using deception, false pretenses, coercion, harassment, duress, and threats to do so

These crimes often significantly impact veterans’ quality of life. The loss of financial stability at an older age is not easily recovered and can even cause a premature end of life.

Elder abuse is an underreported crime for a number of reasons including shame, embarrassment, protection of family members, or lack of mental capacity to report. While the prevalence and characteristics of elder abuse in the veteran population are not known, it is likely that this population is at elevated risk based on the following factors:

Veterans have higher incomes, but less of a financial safety net.

According to Pew Research Center, older veterans have approximately 20% higher household income than older civilians, perhaps due to veteran pensions. But research by the NCOA shows that veterans have relatively little savings compared to the non-military population of the same age group. This puts older veterans who are victims of fraud in a precarious position and makes them less likely to quickly bounce back from financial loss.

 

Veterans have a higher frequency of physical and mental health issues.

Analysis by the NCOA shows that older veterans are in poorer health than their civilian peers. Exposure to combat and other military trauma is associated with post-traumatic stress disorder (PTSD), physical and mental health issues, and alcohol and drug addiction. Veterans over age 55 are more likely to have two or more chronic medical conditions compared to similarly aged non-veterans. All these health factors set up older veterans as prime targets for financial exploitation, as functional dependence and physical disability have repeatedly been shown to increase elder abuse risk.

 

Trusted individuals have access to veteran’s vulnerabilities

Family members usually have the most knowledge of an older adult’s financial resources and have easy access to their finances. If the older adult is a veteran, family members may also be privy to information about any veteran disability pensions or other government benefits their relative is due to receive. Any additional financial benefit escalates the possibility of an older veteran being victimized by family members.

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Red flags
Warning signs of veteran elder abuse

There are many red flags associated with elder financial exploitation that are especially applicable for older veterans. FinCEN issued an advisory to assist the financial industry in reporting instances of financial exploitation of the elderly. Six of the typical red flags include:

  1. New “best friends” suddenly entering an older veteran’s life
  2. Abrupt changes in a will or other financial documents
  3. Unexplained disappearances of funds or valuable possessions
  4. Sudden, unexplained transfers of assets
  5. Confusion, fear, or lack of awareness surrounding finances
  6. Refusal to make eye contact when discussing finances.

It is critical that all veterans – especially the oldest and most vulnerable – and their loved ones know the signs of elder fraud and other forms of financial exploitation. The following tips can help bank customers or credit union members, family, and others in the community prevent veteran fraud:

  • Talk about examples of elder fraud to older friends and family who are veterans. It may be an uncomfortable topic, but the more that older adults are aware, the better prepared they will be should they be targeted for veteran financial fraud.
  • Reach out to community centers, places of worship, and senior centers to help educate their communities on the risk factors and red flags of elder abuse, including financial fraud.
  • Check-in on loved ones, especially those living alone or grieving the loss of a spouse.  Scammers are seeking to target them as they are more vulnerable than older adults with strong support systems.
Detecting fraud
What can financial institutions do to help?

Financial institutions should include prevention of elder financial exploitation, including exploitation of veterans, in their suspicious activity monitoring program. Transaction monitoring software should allow for the identification of this higher-risk group. Scenarios based on age and typologies often detect elder fraud before the victim loses their entire livelihood.

If a bank customer or credit union member falls victim to elder abuse, there are resources available to help. Call the Veterans Crisis Line at 1-800-273-TALK (1-800-273-8255) or contact a local Adult Protective Services office using this locator map.

Education leads to understanding, and training leads to systematic prevention procedures, both of which are necessary for community financial institutions to combat the rising threat to older veterans of elder fraud. Our veterans are worth the effort, so keep up the good fight.

About the Author

Terri Luttrell, CAMS-Audit

Compliance and Engagement Director
Terri Luttrell is a seasoned AML professional and former director and AML/OFAC officer with over 20 years in the banking industry, working both in medium and large community and commercial banks ranging from $2 billion to $330 billion in asset size.

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