A significant amount of assets, a regular source of income and home equity are three factors that make elderly consumers targets for financial abuse, a Wednesday CFPB report said.
In addition to the report, the bureau issued an advisory on best practices for financial institutions looking to protect the elderly from such abuse.
In the advisory, the CFPB recommended financial institutions train their staff to recognize abuse targeting the elderly population. Additionally, it said the use of fraud detection technologies can be used to pinpoint suspicious account activity associated with elder fraud risk.
Further suggestions included offering age-friendly services to assist seniors with planning for potential incapacity, as well as alerts for account activity and opt-in limits on cash withdrawals or geographic transactions; reporting suspected exploitation to appropriate authorities; and working with local Adult Protective Services and law enforcement to enhance prevention and response efforts.
During a call that addressed the advisory and report, CFPB Director Richard Cordray said financial abuse is the most common form of elder abuse and one of the least reported.
“When seniors fall victim to a scam by a stranger or to theft by a family member, they may be too embarrassed or too frail to pursue legal action, or even report they have suffered harm,” he said. “So it is crucial that others know how to look out for them. Elder financial exploitation has been called the crime of the 21st century.”
He added seniors may be especially vulnerable due to isolation, cognitive decline, physical disability or other health problems.
The report said financial abuse costs seniors billions of dollars per year.
“This action gives financial institutions best practices and tools to protect older consumers from financial abuse,” Cordray said. “Banks and credit unions are uniquely positioned to look out for older Americans and take action to protect them.”
Cordray said while the recommendations are specific and actionable, they are not binding.
“They are simply suggestions we urge institutions to consider in serving their customers,” he added.
Elder financial abuse has undergone additional scrutiny lately, as FINRA proposed a rule that could allow financial institutions to place a 15-day hold on some transactions for account holders 65 and older, among others. Additionally, CU Direct launched a new product aimed at targeting identity theft and fraud among elderly credit union members.
The CFPB said consumers who suspect they or a loved one has been a victim of financial exploitation can visit eldercare.gov to find a local adult protective agency and other service providers that can help. The bureau also posted a tip sheet on its website to assist consumers to work with their financial institution to protect themselves from financial abuse.
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