NEW YORK (MainStreet)Elderly Americans have money. Their numbers grow daily. In some cases their mental capacities are diminishing. "It a horrible perfect storm for scams," said lawyer Steve Weisman, who teaches elder planning at Bentley University in Waltham, Mass. "The elderly are 12% of the population and 30% of the scam victims."
The Consumer Financial Protection Bureau estimates the extent of elder fraud at $2.9 billion - but the federal agency acknowledges that for every case that comes to the attention of law enforcement, 43 go unrecognized.
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Add in the size of the country's elderly population - 50 mllion, with another 100,000 Baby Boomers joining the ranks daily - and this becomes a crime with exponential growth.
Elder fraud experts also say - loudly and in many cases angrily - that financial institutions could be doing a lot more to prevent a substantial amount of elder fraud.
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But, first, understand how abruptly it happens. Ask Washington State resident Suzanne Perkins Newman, who one day discovered her aged mom had, in the space of perhaps one month, been robbed of around $9,000 by a caregiver. "My mom gave her her debit card, she was trusting," said Newman, who now runs the website Answers for Elders. The theft was detected when a relative who monitored the elderly woman's account noticed that, suddenly, there were many ATM withdrawals where before there had been none. "Why are you withdrawing so much money from your mom's account," she asked Newman - and quickly they realized it was the caregiver.
Philadelphia lawyer Debra Speyer can top that. A client of hers had an account looted of several hundred thousand dollars, and the culprit, said Speyer, was a bank employee. "My client had deposited an inheritance, and the bank employee had told her, 'only deal with me,'" said Speyer. That's what she did - until one day she discovered her funds were gone. Speyer analyzed the account activity and swiftly realized who the culprit had to be.
"It's bank employees, caregivers, in many cases it is family members who are stealing from the elderly," said Tod Burke, a professor of criminal justice at Radford University in Virginia.
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Saddest is that, in many cases, elder fraud could be stopped early, perhaps even prevented, if financial institutions took a hard look at transactions involving vulnerable elderly customers, say the experts. Yes, bankers sometimes are crooks, but the institutions also have account histories, going back decades in many cases, with their senior customers and that information could be used to quickly flag irregularities.
"Financial institutions could play an important role here," said Steve Starnes, a financial advisor with Savant Capital Management, who said he has worked with a number of clients suffering serious cognitive decline - which, he stressed, is when most elder fraud occurs.
He added that - between financial institutions and more alert and involved family members - probably 90% of elder fraud could be stopped.
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That's because much of this crime is crude. It's often as blatant as writing checks to oneself and holding the senior's hand as he or she signs the instruments. Another common ploy: requesting a debit card on an account that has never had one and then putting in frequent visits to ATMs.
One state - Maryland in 2012 -- passed a law requiring financial institutions to report suspicious transactions involving senior citizens. How's it working? "The vast majority of our seniors still come into the branch to bank," said Frank Moran, director of security at Sandy Spring Bank in Olney, Md. "Our front line staff may notice that something is different."
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Like what? Probably the most prominent red flag is when the senior comes in to add another signature to the account, but equally worrisome are withdrawals that depart - by virtue of amounts or frequency - from past behavior.
Either way, when tellers notice a change they are taught - in an annual training for all employees at Sandy Spring as well as in the new employee orientation - to report it upward. And reports come in. Sandy Spring, said Moran, has passed on perhaps 20 reports in the last year to Maryland's Adult Protective Services.
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Institutions in other states generally are far more passive. Some experts believe that is wrong.
"Banks should be doing this as a matter of course," said Weisman, the attorney. "It's easy, and it works. The banking industry needs to meet its responsibility. That would help limit what has become a very, very serious problem."
--Written by Robert McGarvey for MainStreet