The first call came just before Thanksgiving last year. She didn't recognize the phone number, but she answered anyway.
"The person said he was an officer of the Department of Criminal
Investigations looking into drug trafficking and money laundering," the
woman recalled. He seemed to know a lot about her: the states where she
and her late husband had lived; his name and occupation; and her current
address in Washington County, Rhode Island.
On her phone, he showed her a convincing badge and a photo ID with
his name ("'Frank' something"), plus an article describing the supposed
investigation. The woman, a 76-year-old retiree, denied any involvement.
"You can hire a very expensive criminal defense attorney, or you can cooperate with me," Frank told her.
"Now, when you think about it, it doesn't make any sense," the woman
acknowledged recently. But persuaded by the badge and ID, she agreed to
cooperate. Otherwise, "I thought they were going to come and arrest me."
Frank called each morning to learn where she was going, what she was
doing. His team would be watching, he warned. The woman, feeling
"petrified," started looking around as she drove to garden club
meetings. Was somebody following her?
It was all a scam.
Because victims' sense of shame often leaves them reluctant to report
such crimes, the extent of elder financial exploitation is hard to
calculate. The Federal Trade Commission reported losses of $2.4 billion
in 2024, largely driven by investment and romance scams and
impersonations, with total losses much higher.
Americans age 60 and older lose more than $28 billion annually to financial exploitation, AARP estimated in 2023.
As those numbers rise, because the population is aging and predators
are growing increasingly resourceful, banks and investment firms are
becoming the first line of defense.
Frank's initial target: her account at Fidelity Investments. He
instructed her to shift about $250,000 into her checking account,
telling the financial adviser at her local office that she and her
family intended to buy real estate.
That scheme fizzled when the adviser said Fidelity could not approve the transaction without more information on the property.
So Frank sent her to her local branch of Washington Trust Company to
take $70,000 in cash from a home-equity line of credit. "We don't give
out that much in cash," the teller said, quietly messaging the branch
manager, who had known the woman and her husband for years.
The manager ushered the woman into her office to talk, and the scam
stopped there, with a call to the local police. The woman's assets
remained intact, but the experience proved so mortifying that she has
not told even her family how close she came to losing much of her life
savings. The New York Times is withholding her name to spare her
embarrassment.
"I felt so stupid," she said. "I felt like a fool."
Financial predators targeting older adults represent "a heightened
focus for us now," said Mary Noons, president and chief operating
officer of Washington Trust.
A regional community bank, Washington Trust cranked up its efforts
last fall to advise older customers and their families about finances,
including the dangers of elder fraud and exploitation. It published and
distributed a booklet called "Age With Wisdom" and brought in an expert
on dementia to speak with staff members.
And it became one of the 1,500 financial institutions to date to use
BankSafe, a free AARP video program that trains front-line employees to
spot the red flags indicating possible elder exploitation and to
intervene. Everyone at the branch where the 76-year-old banked had taken
the training.
"Some older customers visit their bank far more frequently than they see their health care providers," Noons pointed out.
Until recent years, financial institutions placed "more of an
emphasis on the autonomy of the client," said Pamela Teaster, director
of the Virginia Tech Center for Gerontology and an elder abuse
researcher. Their approach was, "an adult has the capacity to make poor
choices, and we're going to let them make them," she added.
But changes in government and industry policies and practices have
encouraged greater vigilance. Congress passed the Senior Safe Act in
2018, protecting banks and financial firms from liability if they
reported suspected exploitation to authorities.
That year, the Financial Industry Regulatory Authority began
requiring member firms to ask for a trusted contact person when
investors open or update accounts. (The account holder isn't obliged to
provide one, however.) And since 2022, it has allowed firms to place
holds on older investors' transactions if they suspect exploitation is
involved.
About
half of states have enacted laws that permit financial institutions to
deny suspicious transactions or impose holds for specified periods to
allow investigations, said Jilenne Gunther, the director of BankSafe.
"It adds friction," she explained. "With space and time, the criminal
gets worried and might move on. And the potential mark has time to stop
and think."
Teaster's analysis of data from BankSafe, during a six-month pilot in
82 financial institutions, found that participants were much more
likely to report suspected cases and save customers money than a control
group was.
Not all of older adults' losses result from predators, however. They
can, on their own, get caught up in investment fads, take on too much
debt, or make otherwise unwise decisions, even without criminals pulling
the strings or relatives looting their accounts.
Managing finances presents complex cognitive challenges, said Mark
Lachs, co-chief of geriatrics and palliative medicine at Weill Cornell
Medicine. "It requires a lot of brain," he said, including: "Memory,
remembering that a bill is due. Executive function, the ability to
manage your time. Abstraction, hypothesizing about your future."
He added, "Financial errors are not infrequently the first sign of impending dementia or a neurocognitive disorder."
A 2024 study by the Federal Reserve Bank of New York, for instance,
found an increased probability of delinquent payments and deteriorating
credit ratings in the five years before a dementia diagnosis. Those
errors can reduce seniors' access to credit and raise their interest
rates on loans at the very point when caregiving expenses are likely to
soar.
Lachs has called on fellow doctors to recognize what he calls
Age-Associated Financial Vulnerability, a syndrome that can affect even
older people with normal cognition, especially if they contend with
medical illnesses, sensory deficits, or social isolation.
And he remains skeptical about the financial industry's claims of
heightened attention to its oldest customers. "I still see concerning
financial transactions executed that should have received far greater
scrutiny," he said.
Training more front-line staff members and increasing emphasis on
establishing trusted contacts for older customers would help, Gunther
said, because "once the money leaves the account, it's near impossible
to ever retrieve it." More states could enact laws allowing financial
institutions to deny suspicious transactions or impose holds.
Several related bills with bipartisan support are working their way
through Congress. The National Strategy for Combating Scams Act would
require the FBI to coordinate efforts to protect seniors. A bill that
restores an IRS deduction would at least provide the consolation of
excusing scam victims from paying taxes on money they no longer have.
However, new weapons like artificial-intelligence voice cloning — in
which the supposed grandson four states away who urgently needs $5,000
in gift cards actually sounds like the victim's grandson — keep
advocates and bankers awake at night.
In the Washington Trust branch where the Rhode Island woman didn't
lose her money, employees just days earlier had stopped a scam similar
to the one that had targeted her.
But more recently, nobody spotted any danger signs when an older
woman withdrew $9,000 for a kitchen renovation, until it went to a
scammer instead of a contractor.
Full Article & Source:
Banks are becoming bulwarks against scams for vulnerable seniors