Elder financial exploitation (EFE) and elder fraud continue to be serious crimes in the United States. Nearly 1 in 10 individuals over the age of 60 falling victim to this crime. These offenses are rising at an alarming rate and have been exacerbated by the COVID-19 pandemic. With no signs of dissipating, financial institutions are in a unique position to detect and report these crimes. June is Elder Abuse Awareness Month, and it’s an important time for financial institutions to reassess EFE red flags and ensure they are up to date on the latest EFE trends to prevent these crimes.
How to Expose the Hidden Crime: Elder Financial Exploitation
June 10, 2021
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June is Elder Abuse Awareness Month
June is Elder Abuse Awareness Month, and it’s a key time for institutions to reassess EFE red flags to prevent these crimes.
Looking for more information on preventing Elder Financial Exploitation at your financial institution?
Takeaway 1
Elder abuse and EFE is a growing concern as the baby boomer generation his their senior years.
Takeaway 2
Financial institutions must train front-line staff to identify behavioral red flags that could indicate elder financial abuse.
Takeaway 3
As banks become more digital, a robust software that can help the back-office detect transactional red flags is critical.
New trends
The State of Elder Financial Exploitation
Elder abuse and EFE specifically is a growing concern as the baby boomer generation hits their senior years. Every year, it is estimated elder adults are exploited for up to $36 billion. However, EFE is significantly underreported, with just 1 in 44 cases of financial exploitation coming to the attention of authorities. Why is this? The majority of EFE crimes are committed by family members. Oftentimes, these family members are dealing with financial problems, substance abuse issues, or are trying to acquire or inherit an older person’s assets (or keep other family members from doing so).
Over the past year, COVID-19 created a new element of risk for EFE. Criminals often take advantage of the more vulnerable during any state of emergency or disaster, particularly the elder population. Fraudsters can play into the vulnerable population’s fears and scam them out of financial resources. Imposter scams, like posing as Center for Disease Control (CDC) officers or offering COVID-19 tests, HHS grants, and Medicare and Medicaid prescription cards in exchange for personal details, have become more common during this time.
Identifying EFE at Your Institution
Elder Financial Exploitation Red Flags
It’s important that financial institutions understand the red flags of EFE and properly train their front-line staff and back-office to identify these warning signs. Isolation, recent loss, physical or mental disabilities, or unemployed family members are all factors that can make an elderly individual more susceptible to EFE. Front-line staff can be especially helpful in identifying behavioral red flags, such as caregivers showing excessive interest in the elder’s finances or refusing to let the elder speak for himself or herself, or elders showing an unusual degree of fear or submissiveness toward the caregiver or sudden lack of knowledge about his her or financial status.
Elder Financial Exploitation is an under-reported and growing crime.
How can your financial institution prevent it?
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As banking becomes more digital, and face-to-face interactions are less frequent, it becomes increasingly important that financial institutions have processes in place that can detect EFE from a transactional side as well. Back-office staff can monitor transactional red flags, especially with the help of BSA/AML software. Software that uses single- and multi-channel fraud detection can help institutions better spot potential EFE. Transactional red flags include instances of erratic or unusual banking transactions, such as frequent, large withdrawals, inconsistent debit transactions, or the closing of accounts without regard to penalties.
Financial institutions are in a unique position to detect possible financial exploitation early before the senior loses their life savings and/or livelihood. It’s critical that financial institutions remain diligent and proactive in their efforts to thwart EFE. Together, we can all work together to better protect our elders and their livelihoods from financial exploitation.
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