First, I have reached the age where I am certainly perceived by others as being elderly, even though I don't think that I am. Second, I probably need some level of protection, even though I don't think that I do.
The other day I received a phone call from someone in the grant division of the U.S. Treasury Department. Apparently, there is a program where the government selects people with good credit and no criminal background to receive government grants, and I have been selected to receive $10,000 a year for the next five years. When the person told me of my award, I immediately shouted out to my wife, "Honey we just got $50,000. Now we can go to Las Vegas and play in the high rollers room." All I had to do to get the award was give them my date of birth, my social security number, my bank account number, my credit card number and the security code and send them $1,000 to cover the cost of processing the award. I haven't received the award yet, but we have booked our airline reservations.
Undoubtedly people fall for scams like this or the crooks wouldn't spend their time perpetrating them. My guess is that the greater proportion of victims are the elderly, people the Consumer Financial Protection Bureau (CFPB) refers to as often "cognitively impaired". I have been cognitively impaired all of my life, but it has gotten worse the older I have gotten. "Ethel, where did I leave the car keys?" The CFPB defines elder abuse as the illegal or improper use of an older person's funds, property or assets, typically by a family member, caregiver, scam artist, financial advisor or home repair contractor. The elderly are a favored target because they generally do have money. At times, their thinking can be impaired and they are at times dependent, to some degree, on a third party also. Through the dependency, trust is gained and people can abuse the trust. Elder abuse is no joking matter. According to the CFPB, it amounts to billions of dollars a year and the scammed elder has no way of recovering.
Bankers generally do not have a legal obligation to oversee how their customers spend their money, but I think they do have a moral obligation to review the transactions of their customers who are the most vulnerable. If an elderly customer wants to send a wire transfer for $50,000 to someone in Kenya, bells and whistles should go off. If an elderly customer, who has seldom used an ATM suddenly has frequent ATM cash withdrawals to the maximum limits, or if an elderly customer who previously had few cash withdrawals is now making frequent large cash withdrawals, someone should inquire about it.
The CFPB has recently published a paper entitled "Recommendations and report for financial institutions on preventing and responding to elder financial exploitation." It contains advice on:
- Establishing and maintaining protocols and procedures for protecting elder account holders,
- The content of employee training programs,
- Warning signs of elder abuse,
- Use of technology to detect elder abuse, and
- Elder abuse reporting to state agencies and suspicious activity reporting.
The recommendations in the paper go beyond what most banks need, but it does contain suggestions that will be valuable to everyone.
Acting on signs of elder financial abuse can be problematical. On one hand you want to protect your customer, but on the other hand you do not want to be intrusive. I think most customers would prefer that you err on the side of protection. I think that in almost all cases they would appreciate that you are concerned. I recommend that all banks have a program for detecting and acting upon evidence of elder financial abuse. After all, I may be your customer.