December 9, 2021

Bankers on the Front Lines in Fight Against Financial Exploitation of the Elderly

An elderly bank customer says she needs to send $10,000 to her grandson, who called from Mexico frantically claiming that’s how much money he needs to get out of jail.

A man suddenly has started appearing with his father-in-law on visits to the bank, assisting the senior, who sometimes seems nervous or confused, with making larger-than-normal withdrawals.

A man in his late 70s states he was notified he just won a lottery, but  needs to send money to cover the taxes before he can receive his prize.

Scenarios like these are among red flags bankers watch for as they try to prevent their customers from falling victim to the growing crime of financial exploitation of older adults.

According to the FBI, each year millions of elderly Americans are victimized by some type of financial fraud or confidence scheme, draining seniors’ bank accounts of more than $3 billion.

In Wisconsin, a survey last year for the Wisconsin Department of Health Services indicated that more than $31 million was lost through financial exploitation of the elderly, said April DeValkenaere, a white collar crime paralegal for the Waukesha County District Attorney’s Office.

The problem is even worse than the available numbers indicate, she said. It’s estimated that only one in 44 cases of elder financial exploitation is ever reported, according to the National Center on Elder Abuse (NCEA).

That means almost every bank has customers who are in jeopardy of being duped by a scam or being exploited by a family member or caregiver.

“We have eight locations, from Waunakee to Green Bay, and we have seen cases of elder abuse in all of our communities,” said Theresa Weckwerth, vice president and enterprise risk manager for Berlin-based Fortifi Bank. “No community is too large or too small to be free from elder abuse. I believe it is everywhere. The more we can educate our elders, the stronger we will be in fighting elder abuse as a whole.”

The list of online, email, and phone scams that target senior citizens is long, but they don’t account for most of the money lost through financial crimes that exploit the elderly, said DeValkenaere.

“In the overall scheme of things, scams of older adults are only 10% of the actual theft from older adults,” DeValkenaere said. “The other 90% of theft from older adults are actually from a trusted individual — someone they know and trust. Their family members, caregivers, powers of attorney, guardians, neighbors, or loved ones, all of those people essentially account for 90% of elder financial exploitation.”

Many banks train their employees to be on the lookout for changes in customer patterns and routines that might indicate someone has gained undue influence over them and their financial decisions. But it’s not always easy to detect.

“Sometimes if you have that overly helpful family member,” said Debby Bartolerio, chief operating officer at First Citizens State Bank in Whitewater. “Sometimes that’s good because they are actually assisting the elder. But sometimes, that is a family member who’s taking advantage of them. And that’s kind of a hard thing to determine, which side of the fence are they on.”

Weckwerth said caregivers — family members or a non-relatives hired to care for them — sometimes take advantage of the elderly.

The victim is sometimes made to feel guilty if they try to confront the situation, or afraid that their needs will not be met if they say something.

“The victim is sometimes made to feel guilty if they try to confront the situation, or afraid that their needs will not be met if they say something,” said Weckwerth, who is a member of the Wisconsin Bankers Association’s Financial Crimes Committee. “Many times, the caregiver will make them feel like they ‘owe’ them for all they do, or threaten to not provide the basic things that are needed such as groceries or healthcare.”

Bartolerio, who also is a member of WBA’s Financial Crimes Committee, said a community bank like hers, where there are many longtime customers whom tellers have gotten to know, might be in a better position than some to identify trouble.

Tom Mews, president of FNC Bank in New Richmond, also said a community bank may have an edge in scouting out trouble because of the relationships the bank has with customers.

“We know our customers,” he said. “We’re not simply relying on a computer database to kick up red flags. We know what normal transactions are because we see them on a regular basis. We can spot these things just because we know who our customers are.”

According to the FBI, seniors become targets of financial crooks because they tend to be trusting and polite. In addition, they often have financial savings and good credit.

The FBI also says seniors may be less inclined to report fraud because they don’t know how, or they may be too ashamed at having been scammed.

An elderly victim of a romance scam, for instance, might be too embarrassed about being taken in by a scammer via an online dating service.

“We also see romance/companion scams where the elderly are lonely and seeking companionship,” Weckwerth said. “This is generally someone conning the elderly into sending them money for travel, or expenses to keep them out of trouble.”

recent article by Katherine Skiba of AARP.org detailed how elderly customers of the online dating service Match.com lost hundreds of thousands of dollars to fake suitors.

DeValkenaere said many seniors are lonely, but sometimes too trusting. She cited “social isolation” as the source of their involvement in romance scams.

DeValkenaere said she believes banks generally have been doing a good job at keeping their eyes open for financial exploitation of the elderly.

“I think a lot of the financial institutions are training their people very well in regards to what to watch out for and some of these red flags,” she said.

Mews listed circumstances that should raise eyebrows for bankers who handle accounts for the elderly:

  • Sudden changes in bank account or banking practice
  • Unexplained withdrawal of large sums of money by a person accompanying the elder
  • Sudden non-sufficient fund activity
  • The inclusion of additional names on an elder’s bank signature card
  • Unexplained changes in power of attorney, will, or other legal documents
  • Missing checks or money
  • Debit transactions that are inconsistent for the older adult
  • Unauthorized withdrawal of the elder’s funds using the elder’s ATM card
  • Abrupt changes in financial documents
  • Unexplained disappearance of funds or valuable possessions
  • Unpaid bills despite the availability of adequate financial resources
  • Discovery of an elder’s signature being forged for financial transactions or for the title of possessions
  • Sudden appearance of previously uninvolved relatives claiming their rights to an elder’s affairs and possessions.

DeValkenaere said some scams against seniors are seasonal.

“Like the imposter scam. We’ve seen a lot of those lately because this is the enrollment period for Medicare. Fraudsters are calling saying they’re from Medicare or they’re from Social Security and you have to pay this money up front so that we can register you for your insurance. Victims are convinced they need to give money to these people to keep or acquire Medicare coverage,” DeValkenaere said. “Right now, Medicare scams are huge. Come the spring, it’s going to be IRS imposter scams. They’re huge in the spring because it’s tax time.”

In the hopes of tricking the elderly into turning over personal financial information or sending them money, crooks also pretend to be from a government agency.

“Now they are impersonating law enforcement, saying you missed jury duty and if you don’t pay up, we’re going to arrest you or send you to jail, that kind of thing,” DeValkenaere said. “People don’t realize that they’re scams. They are trying to abide by the authorities. It’s just the generation they grew up in. But if our younger tellers have no idea that these scams are even out there, or what they mean, or the timeframe of year they should be watching for them, they can’t educate their customers on it.”

Mews, chair of WBA’s Government Relations Committee, is among bankers hoping state legislation that would let a bank delay a transaction when fraud is suspected will advance and become law.

The bills, AB 45 and AB 46, would allow qualified individuals to temporarily pause transactions where they suspect elder fraud is taking place, refuse power of attorney in certain situations, and allow seniors to name a trusted contact as an extra layer of protection.

“I think community representatives have a really good handle on what should be paused and what shouldn’t be,” Mews said.

The bills also provide legal protection to bankers acting in good faith to prevent elder financial fraud. Both bills passed on voice votes in the full Assembly in May, but since have stalled.

“This would help us by allowing banks to refuse or delay any transaction when we suspect exploitation or abuse,” said Weckwerth.

DeValkenaere, who was a member of the Wisconsin Attorney General’s Task Force on Elder Abuse in 2018, said the legislation is needed.

“It gives the financial institution a pause button to start the investigation as to whether or not this specific transaction is fraudulent,” she said. “So if they are trying to wire $20,000 out of country, the financial institution can hit pause and they can do their own investigation. They can involve other people, meaning Adult Protective Services, law enforcement. They can look into some other options.”

Bankers and experts say the desire for companionship and unfamiliarity with technology contribute to the risk of fraud for the elderly. That vulnerability puts banks in a special role for protecting their customers.

“This is why it is so important for banks and other trusted advisers to continue to educate elders on fraud and how to identify it,” Weckwerth said. “It is important that we know our clients and help them feel comfortable talking to us. They should never be afraid to ask questions of their bankers or talk to us. Many times, the fraud is caught in the front line from a conversation or other indicators that lead us to believe there is a problem and ask more questions.”

This article was written by Paul Gores, a journalist who covered business news for the Milwaukee Journal Sentinel for 20 years. It is republished with permission from the Wisconsin Bankers Association

Leave a Reply

Your email address will not be published. Required fields are marked *