Protecting Older Members

    By Sheryl S. Jackson

    Education and awareness are key to preventing financial exploitation

    Credit union membership differs widely across the country, with some serving a mix of ages, some with a younger membership focused on college campuses and others with a membership comprised largely of older people.

    While people of all ages can become victims of financial fraud, studies estimate total financial losses from elder financial exploitation to be in the billions of dollars each year. Despite variations in individual estimates, most studies indicate that a large number of older adults lose money due to financial exploitation, with many sustaining significant losses.

    “I would like to address the common misconception that older adults are more susceptible to financial fraud and scams,” said Deborah Royster, assistant director for the Consumer Financial Protection Bureau’s (CFPB) Office for Older Americans. “In fact, older adults are actually less likely to report losing money to fraud than younger people, according to Consumer Sentinel data.”

    Data shows that 41% of people in their 20s reported fraud loss while only 18% of people in their 70s reported losing money to scams. However, when older adults do lose money to scams, they experience higher median dollar losses, said Royster. “For example, the median reported loss for people in their 20s was $500 while for people in their 80s, it was $1,500.”

    Romance and imposter scams, in addition to other types of scams, are responsible for older persons’ loss of significant money, but some credit union staff have seen scenarios where family members take advantage of an elder family member’s diminished capacity, said James Akin, regulatory affairs counsel for NAFCU. “Credit unions are especially sensitive to protecting older adults and often ask us for advice on best practices on how to handle suspected financial abuse,” he said. “They want to know how to recognize potential abuse when interacting with a member in person, how to approach the member with their suspicions and what they are legally required and allowed to do to report suspicions to law enforcement or other agencies.”

    A common concern is protecting the privacy of the member and their information in reports to other agencies, said Akin. “The [National Credit Union Administration (NCUA)] has said that you can report suspected abuse to law enforcement, social services, and other local, state or federal agencies without violating the privacy provisions of the Gramm-Leach-Bliley Act.”

    Identifying Fraud Red Flags

    Activities that might be red flags indicating potential exploitation include unusually large withdrawals or wire or ACH transfers, especially for a member who is on a fixed income, said Akin. “In the branch, staff might notice that the member is visibly upset or scared, or the member might be accompanied by an individual who seems to be controlling the transaction,” he said. “Credit unions are excellent in relationship banking, so tellers get to know members and can recognize atypical behavior. While a member may be reluctant to report financial abuse to others, they may be more open to hearing concerns from someone they know and trust.”

    Credit union staff’s ability to recognize a potential financial abuse situation in person is also bolstered by technology that identifies unusual activity in transactions, said Akin. “During the pandemic, more people of all ages began banking online because they could not come into branches,” he explained. In addition to monitoring transactions for the need to file a Suspicious Activity Report on transfers that exceed certain dollar amounts, technology can be used to identify transaction trends that are abnormal for the member. “Even if the member does not come into a branch, credit unions can contact the member with concerns.”

    “In addition to training employees and members to recognize and respond to financial exploitation, credit unions could consider offering age-friendly services that can enhance protections against financial exploitation,” said Royster. “For example, credit unions can encourage the use of trusted contacts—both by making sure they offer this option and by encouraging members to use it.”

    “The trusted contact initiative is supported by the Financial Crimes Enforcement Network and allows a member to identify another person who we can contact if we suspect that the member is a victim of fraud,” said Akin.

    A trusted contact is an emergency financial contact who can step in to help protect the account holder. This can be a helpful service for account holders and can also signal to consumers that the institution is taking steps to help protect their assets and prevent financial exploitation.

    “CFPB has an advisory for financial institutions that includes several voluntary recommendations about alerts to trusted contacts,” said Royster. “These recommendations may be helpful for credit unions that implement this practice. The advisory provides information about developing relevant policies and procedures, educating account holders, and training and supporting staff.”

    Another example of age-friendly practices include credit unions reporting suspected financial abuse to authorities such as local law enforcement and/or Adult Protective Services, as appropriate under relevant state laws, suggested Royster. “There are many promising practices that can help credit unions prevent elder financial abuse and intervene effectively when it occurs.”

    Staff and Member Education is Critical

    In 2016, CFPB released an advisory and a report to financial institutions on preventing and responding to elder financial exploitation. The report contains recommendations that financial institutions could voluntarily practice to help prevent elder financial abuse or to intervene when identified.

    “CFPB released an update to those recommendations in 2019, which is focused on how financial institutions can best report suspected elder financial abuse to appropriate authorities, such as Adult Protective Services and law enforcement,” said Royster. “The update also provides an overview of recent federal and state legislative changes, including an overview of the Senior Safe Act and charts of state statutes related to mandated reporting of suspected elder financial abuse, transaction holds or delays in disbursing funds when elder financial abuse is suspected, and sharing of financial records with law enforcement and Adult Protective Services. These recommendations can help credit unions assess their policies and procedures and decide whether additional measures might be helpful to better prevent elder fraud.”

    Educating staff, regulators and members is a critical component of fraud prevention, said Akin. “NAFCU has worked for many years to ensure that older credit union members are safe from fraud and that their financial well-being is protected. Webinars, blogs and other tools that can be used to continue training staff and educating others can be found on our website,” he said. “NAFCU members can also join the NAFCU Compliance, Risk & BSA Network to post best practices and share information with other NAFCU members.”

    Education, use of trusted contacts and awareness of what to do when fraud is suspected can help credit union staff know how to protect members. “These types of interventions can help prevent financial exploitation and decrease the fraud losses sustained by older adults,” said Royster. “We know credit unions work hard to recognize elder fraud and protect their members, but, unfortunately, the nature of elder financial exploitation and the never-ending creativity of scammers means there are always new opportunities for financial institutions to adapt and improve their response to this issue.” 

    Resources to Help Protect Older Members

    The NAFCU website contains reports, blogs and other material, including the webinar “5 Ways You Can Help Older Members Avoid Fraud and Financial Exploitation.”

    The CFPB offers guidance on identifying and reporting financial exploitation as well as educational tools and materials for use in staff and member education at

    The U.S. Department of Justice’s Elder Justice Initiative provides news, guides and tools at

    The NCUA posts letters and guidance on issues related to elder financial exploitation and credit unions at www.ncua.gov

    Elder Abuse Awareness Month

    June is recognized as Elder Abuse Awareness Month, in conjunction with World Elder Abuse Awareness Day, which was launched June 15, 2006, by the International Network for the Prevention of Elder Abuse and the World Health Organization at the United Nations. The purpose of the day—and the month—is to provide an opportunity for communities around the world to promote a better understanding of abuse and neglect of older persons by raising awareness of the cultural, social, economic and demographic considerations affecting elder abuse and neglect.