The Consumer Financial Protection Bureau recently issued an advisory and a report with recommendations on ways banks and credit unions can prevent, recognize, report and respond to the financial exploitation of older Americans. Financial exploitation, the illegal or improper use of a person’s funds, property or assets, costs seniors billions of dollars per year, according to a news release.
“This action gives financial institutions best practices and tools to protect older consumers from financial abuse,” CFPB Director Richard Cordray said in the release. “When seniors fall prey to a scam by a stranger or to theft by a family member, they may be too embarrassed or too frail to report it. Banks and credit unions are uniquely positioned to look out for older Americans and take action to protect them.”
Banks and credit unions are well-situated to protect older Americans from financial exploitation, according to the CFPB, as most older adults have checking or savings accounts and many rely on tellers as their primary form of banking. Financial institutions also are able to detect and act when an elder account holder has been targeted or victimized, and are mandated to report suspected elder financial exploitation under many states’ laws, according to the CFPB.
In addition to the advisory, the CFPB issued a report with detailed recommendations for banks and credit unions on how to prevent and respond quickly to financial exploitation of seniors.
• Training staff to recognize abuse. Financial institutions should train employees on ways to detect the warning signs of financial exploitation and appropriately respond to suspicious events.
• Using fraud detection technologies. Financial institutions should ensure their fraud detection systems can spot suspicious account activity and products associated with elder fraud risk. This includes using predictive analytics to review account holders’ patterns and explore additional risk factors that may be associated with elder financial exploitation.
• Offering age-friendly services. Banks and credit unions should provide seniors with information about planning for incapacity. They also can offer age-friendly account features such as opt-in limits on cash withdrawals or geographic transactions, alerts for specific account activity and view-only access for authorized third parties.
• Reporting suspicious activity to authorities. Financial institutions should promptly report suspected exploitation to relevant federal, state and local authorities, regardless of whether reporting is mandatory or voluntary under state or federal law. Banks and credit unions can work closely with local adult protective services agencies and law enforcement to enhance prevention and response efforts, including expediting document requests and providing them at no charge.
A copy of the CFPB advisory is available at: http://files.consumerfinance.gov/f/201603_cfpb_advisory-for-financial-institutions-on-preventing-and-responding-to-elder-financial-exploitation.pdf
The report is available at: http://files.consumerfinance.gov/f/201603_cfpb_recommendations-and-report-for-financial-institutions-on-preventing-and-responding-to-elder-financial-exploitation.pdf