Bank robber Willie Sutton once famously explained that he robbed banks because "that's where the money is." These days it seems to be easier to rob senior citizens.
A new survey reports a 20% increase in elder abuse since 2000, and a significant portion of that abuse is financial. Adult Protective Services agencies received 565,747 reports of suspected elder abuse in 2004, and about 15% of substantiated cases involve financial exploitation.
Simply put, there were about 85,000 reported cases of elder financial exploitation in 2004, and probably many more went unreported.
Now, members of the banking industry are collaborating to do something about this abuse. BITS, the business strategy and technology division of financial-services association Financial Services Roundtable, has just created a "fraud prevention toolkit" designed to help banks educate their employees to help protect their senior customers.
"Banks are now focusing on elder scams," says BITS Chief Executive Catherine Allen. "While financial institutions are not legally responsible for monitoring potential exploitation of customers, this is an area in which banks can make a positive contribution to the well-being of vulnerable customers."
Financial exploitation is defined as "the illegal or improper use of an elder's funds, property, or assets," according to the National Center on Elder Abuse. That could include cashing a vulnerable person's checks without authorization, or forging an older person's signature. In many elder-scam cases, an older person is deceived into signing residential sales contracts, or even a will. Or the senior could be duped into signing over assets into a conservatorship or guardianship or giving away financial power of attorney.
What role can banks play in protecting seniors?
BITS says that banks have developed a level of trust with their customers, and often see them on a regular basis -- especially seniors who like to visit their financial institution in person. The new program trains bank employees to look for red flags of scams. These include signatures that seem forged; requests for statements to be sent to a different address, or new signers on an existing account; unusual cash withdrawals in a short period of time; and ATM activity in the account of a homebound senior.
These may be signs of some well-known elder-scams that continue to be inflicted upon each new generation of seniors. For example, there's the "pigeon drop" scheme in which the victim puts up "good faith" money in hopes of sharing a portion of a large sum of money that is "found" in the presence of the victim.
Other seniors fall victim to inheritance scams in which they are lured into sending a fee to receive information about collecting a purported inheritance. Or they give out their banking and Social Security numbers to a supposed bank "security officer" who claims to be doing an internal banking investigation. The list is endless, and familiar to savvy adults who quickly delete the emails from Nigeria requesting financial aid in collecting money from huge "frozen" bank accounts. But seniors continue to be victimized.
The banking industry is not alone in feeling responsible for seniors who get fleeced, either through direct withdrawals of cash or transfers of assets. If you suspect a senior is falling victim to financial abuse, you can contact the
National Center on Elder Abuse or
National Adult Protective Services Association.
Since you're savvy enough to be reading a personal finance column, you aren't likely to be a victim of financial scams. But check in on your elderly relatives or neighbors. Financial scams leave very few visible signs of abuse -- until the money runs out. By then it's too late. And that's The Savage Truth.
Terry Savage is an expert on personal finance and also appears as a commentator on national television on issues related to investing and the financial markets. Savage's personal finance column by the Chicago Sun-Times is nationally syndicated, and she released her fourth book, The Savage Number: How Much Money Do You Need? in June 2005. Savage also was the first woman trader on the Chicago Board Options Exchange and is a registered investment adviser for stocks and futures. A Phi Beta Kappa graduate of the University of Michigan, Savage currently serves as a director of the Chicago Mercantile Exchange Corp. She also has served on the boards of the McDonald's and Pennzoil corporations.