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What Banks Are Doing to Halt Elder Abuse

Why some are proactive, but others are afraid to be


An increasing number of banks and credit unions are implementing fraud-prevention initiatives to prepare for the onslaught of aging Americans expected to develop Alzheimer’s disease.

They are training tellers “to flag potential suspicious behavior, such as coercion by family members, frequent withdrawals of large sums of money in a short period of time or transferring large sums of money,” said Ramsay Alwin, vice president of economic security at the National Council on Aging in Washington, D.C.

This proactive work is likely to benefit older customers as well as the financial institutions. By 2025, the number of people age 65 and older with Alzheimer’s is estimated to reach 7.1 million — a 40 percent increase from today’s 5.1 million, according to the Alzheimer’s Association.

Why Scammers Target Elderly Bank Customers

“They [the elderly] have retirement savings that fraudsters want, which makes the aging population more vulnerable if they are not aware of the latest scams out there,” said Roger Nettie, senior consultant of risk management for the CUNA Mutual Group, a credit union insurer in Madison, Wis. “Credit union members that fall for scams, unfortunately, are usually stuck with their own loss.”

Bank managers, tellers and associates are being taught to report their suspicions to Adult Protective Services, Legal Aid, state attorneys general and, in some cases, even the local police.

Among the top 10 largest retail banks, Citibank is breaking out as a leader in actively monitoring activities of elderly customers for potential fraud.

But their employers are legally limited in what they can do to keep customers in the early stages of dementia or Alzheimer’s safe from financial abuse. That’s because privacy laws, which vary from state to state, can prevent financial institutions from aiding scam victims.

“The unfortunate reality banks must consider is that one family member could take legal action when a bank informs another family member of fraud in the event that an account is styled as only a single account,” said Scott Mullen, principal with North Highland, a management consulting company that works with the largest banks and credit unions. “There needs to be a mechanism in place, such as a power of attorney on file, which allows the bank to release information.”

What Citibank Is Doing

Among the top 10 largest retail banks nationwide, Citibank is breaking out as a leader in actively monitoring the activities of elderly customers for potential fraud.

“Citibank has put in place internal controls that spot patterns of suspicious account activity, such as several large withdrawals, which may indicate that an elder customer has been the target of fraud,” said Fred Schebesta, CEO of Finder, a financial-comparison website. “Other banks may have equivalent programs in place, however they do not appear to be actively promoting them.”

A Citibank spokesman told Next Avenue in an email: “The protection of our clients’ accounts is our chief priority, and we take all potential instances of fraud, including elder abuse, very seriously. When elder abuse is suspected, Citi files all appropriate reports with the relevant state and/or local authorities and conducts its own internal investigation in the matter… With regard to privacy, we adhere to all relevant laws while working with government agencies to protect against fraud.”

Regional Banks and Credit Unions

But according to the National Community Reinvestment Coalition, no bank it surveyed has yet to create a national, uniformed, clear or well-developed structure for serving the needs of a growing older adult population. Regional banks and credit unions, it says, are at the forefront of this emerging trend.

The National Council on Aging (NCOA) also gives thumbs up to the work that credit unions are doing to keep older customers safe.

“We have found that the community development credit unions, in particular, are well positioned to qualify for an age-friendly seal of approval,” said NCOA’s Alwin.

Although an age-friendly seal of approval has yet to be developed, First Financial Bankshares in Texas did receive the American Bankers Association Community Commitment Award this year for its partnership with the Abilene Police Department, the Better Business Bureau and Adult Protective Services.

The regional bank’s Financial Exploitation Education Program, which focuses on the elderly, has saved customers $100 million and has led to 50 arrests at the teller line since May 2014. The program is now active in all 70 First Financial branches, covering more than 700 miles.

The key to its successful elder fraud initiative is preventing fraudulent checks from being cashed or deposited and empowering tellers to report suspected fraud to the authorities.

What’s Holding Back Some Banks

Alwin expects to see more banks and credit unions provide similar protection, though not immediately. “There’s a trend around recognizing and monitoring suspicious behavior, but it will take longer to implement systems, and for these programs to catch fire nationwide, partly due to inherent legalities and privacy concerns,” she said.

In the meantime, one way you can help protect your elderly parent is to create a joint account with him or her. “The bank is allowed, and expected by law, to give access to the second person listed under the joint account,” Mullen said.

But be extremely careful before you grant anyone else permission to share an account with your mother or father. “The second person has full access to money in the account, so the choice of a joint account holder becomes very important,” Mullen noted.

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