Elder Abuse: How Can FI’s Better Protect America’s Most Vulnerable Generation
- The elderly are most vulnerable to fraud
- Even family members and caregivers attempt fraud
- Older consumers are the biggest users of checks, making them a target
What makes the elderly our most vulnerable population when it comes to fraud? Is it because they are the least technologically savvy? Are they more trusting than other age ranges? Whatever the reason(s), As noted in new post from BAI, FIs and fintechs need to pay special attention to this generation.
Between June 15, 2022 and June 15, 2023, there were 155,415 suspicious activity report filings across the country that referenced elder financial exploitation or a similar term as a suspicious activity type, according to an analysis by the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN). The activity, totaling $27 billion, may have included both actual and attempted transactions.
Additionally, six federal agencies collaborated on an interagency statement laying out how they can identify, prevent, and respond to elder fraud.
How Elders are Exploited
There are several specific ways that fraudsters will scam the elderly, as laid out in a list compiled by the FBI. Simply add the word "scam" to the end of each selection:
- Romance
- Tech support
- Grandparent
- Government impersonation
- Sweepstakes/charity/lottery
- Home repair
- TV/radio
- Family/caregiver
The final scam is the most concerning, as explained by BAI:
The most common way that elderly people are exploited is by people who are known to them and people who technically might have legal access to their money or to their financial data. This often includes relatives or professional caretakers, says Natalie Morse-Noland, BAI product manager, content and regulatory compliance.
“Especially when it comes to relatives, those caretakers might not even consider what they’re doing to be abuse or exploitation,” Morse-Noland says. “They might just think, ‘Mom doesn’t need this money anyway and I’ve got to get this car repaired, so I’ll just take some of this money and get that taken care of,’ or something like that.”
What Technologies Can Combat Elderly Fraud?
In addition to boosted training for front line employees in order to identify signs of elder fraud, several technologies are suggested by BAI, including:
- Monitoring analytics: Detect out-of-pattern transactions, unusual account activity, or geographic discrepancies. For example, it can flag an illegitimately opened account, a warning for potential identity theft.
- Predictive analytics: Profile customer behaviors to flag deviations such as irregular Social Security deposits, or predict vulnerabilities like cognitive decline. Models suggest that a sudden change in payment behaviors along with subprime credit scores can detect dementia more than two years before a physician discovers it.
The elderly are the demographic most likely to use checks. Therefore, a crucial tool is image forensic AI, which identifies forgeries by identifying differences in handwriting via Writer Verification (WV-AI) and validates legitimate signatures via Automated Signature Verification (ASV-AI).
The entire industry needs to do more to protect our most vulnerable generation. By deploying the latest technologies and increasing front line staff training, we can better protect the elderly.