Is There Any Hope for Victims of Elder Financial Exploitation?
Elder financial exploitation is a growing problem, with one in five Americans over age 65 having been victimized by financial fraud, according to a 2010 Investor Protection Trust Elder Fraud Survey.
While family members and close acquaintances are often the culprits of this exploitation, Consumer Affairs reports that a study published in the Public Policy and Aging Report (PPandAR) found that U.S. banks and other financial institutions should have a bigger role in preventing these situations.
The study showed that financial exploitation of seniors is often a result of age-related cognitive impairments.
Back in 2009, U.S. household wealth was estimated to be $53.1 trillion, $18.1 trillion of which was held exclusively by older adults.
In 2010, the MetLife Study of Elder Financial Abuse estimated this abuse cost older Americans a minimum of $2.9 billion.
“Ironically, the age group that has amassed the most wealth over the longest period of accumulation is simultaneously at the greatest risk of financial self-impoverishment and exploitation by others,” wrote Daniel Marson in one of the PPandAR articles.
Typically, seniors are scammed by family members, but they are often exploited through telephone calls, emails, or even strangers knocking on their doors as well.
The authors suggest that the banking industry should improve its interactions with older adults by developing proactive planning programs, noting signs of cognitive impairment, dementia, and by learning new techniques for assessing decision-making abilities.
The report suggests that scientists can create predictive models and algorithms to assist banks in detecting diminished financial capacity in elders.
According to Credit Union Times, the Financial Industry Regulatory Authority, Inc. (FINRA), feels the same way and is in turn proposing new rules to allow credit unions and other financial institutions to put temporary holds on accounts of suspected fraud victims.
These institutions would be permitted to place 15-day holds, and longer in extreme cases, on accounts for people who are reasonably deemed to have mental or physical impairments that inhibit their ability to make sound financial decisions.
FINRA would also require these institutions to gather personal and contact information of a trusted person of the account holder in order to warn them in case the account is suspected to be in danger.
While the proposition allows firms to request a 15-day hold if their reviews show suspicion of exploitation, some believe 30 days would be better.
“Our only real concern is, if the hold is only good for 15 days and then we have to release it, will it really do any good? It takes longer than that for a court order or for [Adult Protective Services] to get involved,” said First U.S. Community CU VP of Operations Julie Ainsworth.
Another big concern is that the trusted person is sometimes the culprit exploiting elders. However, firms would be required to keep records of any notifications to these individuals, meaning they will have proof of their knowledge of the situation if legal action is required.