Uncovering Elder Financial Fraud (And Tips on How to Prevent it From Happening)

Senior man on the phone with Minster Bank discussing elder financial abuse and fraud prevention.

Every year, seniors lose more than $3 billion annually from elder fraud, according to the FBI.

Unfortunately, this type of financial fraud is only on the rise, and at Minster Bank, especially in the last few years, we’ve seen more and more of these events happen.

Examples of Financial Fraud

“In the last few months, we’ve seen a lot of customers who have unfortunately been a part of different [fraud] situations,” Compliance Officer Kelly Brookhart said.

She gave a few examples of some recent elder financial abuse situations she has seen, from unemployment fraud to check fraud.

Unemployment Fraud

During the COVID-19 pandemic, there were instances where people used another person’s name to claim unemployment benefits. Brookhart regarded scenarios when customers received a tax document in the mail that correlated back to an unemployment benefit the customer had never received.

“The customers were told they needed to wire money in order for them to not have any issues come up with the IRS,” she said. “When the transaction was taking place the customers were questioned quite a few times on the front lines – being asked, ‘Are you sure this isn’t some type of fraud?’”

In some of these situations, the customers had a perpetrator live on their cell phone, which was kept in their pocket.

“The person was listening so they could be prepared for the next step when the customer left the building,” she said. “Luckily, we were able to get these stopped and recover most of the money that was sent via wire.”

The behavior is typically uncommon for these customers, which is something our frontline staff look out for.

“If the customer is not typically wiring money and is hesitant about what they’re doing – that’s a sign for our tellers if there is a potential financial fraud situation,” Brookhart said. “Also, if it sounds too good to be true, it probably is too good to be true.”

Gift Card / Send Money to a Loved One Scams

Gift card scams are also becoming more prevalent. AARP shares that, according to a 2022 survey, 1 in 3 adults said they or someone they know has been asked to purchase a gift card for someone or to claim a prize.

Brookhart shared other stories where seniors were asked to send gift cards or cash in the mail to an individual. In one particular case, the customer had listed a loved one on the account, whom the bank was able to contact for help assisting and talking through the situation with the customer.

“In this situation, we were lucky enough to have someone on the account we could contact on our end to say, ‘This seems a little odd. Mom or Dad doesn’t want to give us any information.’ That extra push from a family member to help them out is always welcomed,” Brookhart said.

Check Fraud

In 2019, the FTC reported more than 27,000 fake check scams with losses of approximately $28 million. Common check scams may include a scammer attempting to trick a person into sending money back to them after depositing a fake check. According to the FTC, reports of fake checks are up by approximately 65 percent.

Brookhart gave the example of a recent check fraud case involving an elderly person. Luckily, the fraudulent check was caught internally before the person was able to lose any money. Again, the customer had a power of attorney on file whom the bank could contact to assist with communication with the customer and to help navigate the situation.

“It’s helpful to have a second trusted person on the account, in the event that we truly feel that there’s a fraud situation, that we can contact,” Brookhart said.

“Unfortunately, we have to start questioning more things now, especially with the recent increase we are seeing on the elder financial abuse side of things. We ask questions because we care.”

Internal Bank Communication is Key

Minster Bank assistant branch managers are regularly trained on best practices for elder financial abuse prevention, which they regularly pass on to staff.

Minster Bank also offers online education and training resources for team members. Plus, as events have happened, there is ongoing internal communication, so staff can help spot the warning signs of fraud.

“This is new to everybody,” Brookhart said. “As we see those things pop up, we’re passing the information along so the entire staff is aware of different scenarios they could be looking out for that could mean our customer potentially losing a lot of money.”

What to Do if You or a Loved One Are a Victim of Elder Financial Abuse

While these situations involve elderly persons, they also offer insight for many people to be wary of and to spot for their own loved ones, so they don’t become a victim of fraud themselves.

If you believe you or a loved one has been a victim of financial fraud, Brookhart suggests you contact your local authorities and provide any information you may have, such as a perpetrator’s phone number or email address. You should also contact your bank.

“We’ll do what we can to help them get their money back. Unfortunately, there are times we are unsuccessful and that is after exhausting all options,” Brookhart said.

Tips to Prevent Elder Financial Abuse and Fraud

Online and mobile banking are great, easy ways to keep an eye on your account on a daily basis,” Brookhart added.

If someone is hesitant to use online and mobile banking, it may be helpful having someone else on the account who is comfortable with the services to also monitor the account for signs of fraud.

In addition to checking your bank account regularly, Minster Bank customers can sign up for real-time account alerts to be notified of suspicious activity.

For more information on protecting your identity and to read additional steps you can take to protect yourself and your loved ones from financial fraud, visit our identity theft information page.

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