Current Banking Issues: Recognizing the Red Flags of Elder Financial Exploitation

Written by Don Woodland | Oct 18, 2017 11:40:33 PM

Elder financial exploitation is the illegal or improper use of an elderly person’s funds for someone else’s profit.  This type of financial fraud, while morally reprehensible, is unfortunately becoming a bigger problem for banks and their older clientele.  There are currently over 5 million cases of elder financial exploitation each year.  75% of these crimes are committed by family members.  The second most notorious group is caregivers; making seniors and the disabled prime targets for financial abuse.

During the 2017 session of the Graduate School of Banking at LSU, Pete Stuart, the Senior Vice President and Director of Security at State Bank and Trust, Atlanta, GA explained some of the common red flags that typically indicate elder financial exploitation.

Understanding how these customers like to do business, and knowing them on a personal level inside of your branch or office can make it easier to recognize and mitigate these risks.  Most seniors prefer to conduct business in person.  If you notice a long absence from a particular customer, or that their affairs are being handled remotely or by someone else, this could be a warning sign that something isn’t right.  Here are 10 indicators of elder financial exploitation.

  • Frequent, large withdrawals and/or daily maximum ATM withdrawals.
  • Sudden NSF activity.
  • Banking practices that are uncharacteristic for a particular client.
  • Large credit card cash advances or check withdrawals.
  • Being escorted by a 2nd party (family member, neighbor, caregiver, etc.)
  • Unauthorized withdrawals, or withdrawals that incur a penalty (i.e. early CD closure)
  • New names on signature cards.
  • Forged signatures.
  • A client that is unaware or does not seem to understand a financial agreement or transaction.
  • Recent acquaintances that have an interest in an elder client’s finances.

While these are only a handful of red flags that can indicate the misuse and abuse of an elder person’s finances, being mindful of them, as well as recognizing what is out of the ordinary for a client can save a lot of time, money, and heartache.