Federal Agencies Warn: Older Americans Being Exploited for Billions of Dollars

December 5, 2024 TruthUSA

Regulatory agencies have called on institutions to enhance account monitoring and train staff to react swiftly.

In response to the rising number of scams targeting older adults, several regulatory bodies have urged American financial institutions to adopt rigorous measures to protect this vulnerable demographic.

State and federal agencies, such as the Financial Crimes Enforcement Network (FinCEN), the Consumer Financial Protection Bureau (CFPB), and the Federal Deposit Insurance Corporation (FDIC), released a joint statement on December 4, highlighting that financial exploitation of older Americans results in annual losses exceeding $28 billion.

“Elder financial exploitation refers to the illegal use of an older adult’s assets or resources for unauthorized benefits,” the agencies elaborated in the statement. Such exploitation “can drain older adults of their savings completely or partially, severely impact their financial well-being, and cause additional harm.”

Between June 15, 2022, and June 15, 2023, institutions recorded over 155,000 potential abuse cases, tied to more than $27 billion in suspicious financial activity.

An FBI report indicated that there were over 101,000 “elder fraud” complaints in 2023, with individuals over 60 losing an average of $33,915. This average loss was nearly 270% greater than in 2020, when the average loss was $9,175. Last year, the majority of reported losses among older adults were due to investment scams.

“Investment fraud involves complicated financial crimes often marketed as low-risk investments with guaranteed returns,” stated the FBI report. “These include advanced fee frauds, Ponzi schemes, pyramid schemes, market manipulation fraud, real estate investing scams, and trust-based investing such as cryptocurrency fraud.”

Other significant scams involved business email compromise, romance fraud, government impersonation, and personal data breaches.

On Wednesday, regulatory agencies encouraged financial institutions, such as banks, to better assist older adults by enhancing account oversight and training employees to identify and react to financial exploitation. In ambiguous situations, institutions have the option to postpone the release of funds. Additionally, designated employees can act as a primary point of contact for older account holders, as stated by the agencies.

Agencies are urging institutions to promptly reach out to regulatory authorities and “elder fraud prevention and response networks” when they detect suspicious activities.

“These networks can enhance coordination among supervised institutions, law enforcement, Adult Protective Services (APS), local aging service providers, and other significant partners,” the agencies noted.

As pointed out by the Arizona State University’s Center for Problem-Oriented Policing, older adults commonly fall victim to financial crimes either through fraudulent schemes carried out by strangers or through exploitation by family or caregivers.

Strangers often deceive older individuals through fake sweepstakes, investment opportunities, and charitable contributions. Fraudsters may offer loans to seniors in financial distress, imposing exorbitant interest rates and fees. Certain scammers propose miraculous health solutions, promising to resolve the health issues of aging individuals.

“In contrast to strangers, relatives and caregivers frequently have established trust and ongoing relationships with the elderly,” researcher Kelly Dede explained in a 2023 guide for the center. “Financial exploitation happens when the offender takes, withholds, or misuses the elderly person’s money, property, or valuables for personal gain, disadvantaging the elder.”

Such illicit actions can involve cashing an older adult’s social security or pension checks without authorization, repeatedly borrowing funds without repayment, and compelling seniors to transfer legal ownership of their assets, as detailed in the guide.

According to the American Bankers Association (ABA), older individuals are often targeted due to their accumulated wealth.

Older adults deemed most susceptible to financial exploitation include those who have been victimized before, face social isolation, have mental health issues such as dementia, lack familiarity with modern technology, and possess limited awareness of the various scams, according to the ABA.

Some warning indicators of potential monetary exploitation of an older adult involve unusual activity in their bank accounts, the presence of new individuals accompanying them to banks, unexplainable account withdrawals, and relatives or caregivers initiating monetary transactions on behalf of the older adult without proper documentation, as noted by the ABA.

The CFPB recommends that individuals who suspect an older adult has been swindled report the incident to adult protective services.

If an older adult is in immediate danger, contacting 911 is essential. Alternatively, individuals should file a report with the local police department or sheriff’s office.

“If the financial abuse involved a financial account, assist your loved one in reaching out to their bank, credit union, credit card issuer, or other financial service provider without delay,” the agency advised. “Depending on the circumstances, the financial institution may assist in retrieving your loved one’s funds. Also, check if your loved one has any insurance that might cover the loss.”

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