The Consumer Financial Protection Bureau wants banks and credit unions to train employees to watch out for senior citizens and to develop software to spot suspicious transactions often associated with scams that target older customers.
Several large banks in Greater Cleveland already train employees to be on the lookout for such problems, but most don't go as far as the CFPB would like.
A few facts make this a critical concern, said Richard Cordray, director of the CFPB in Washington, D.C. The senior population is increasing by 10,000 every day. And many fraud victims, even if they realize they've lost money, are embarrassed to get help. And fraud targeting older consumers is becoming more common and more sophisticated.
"Fighting it has never been more urgent," Cordray said. Reports suggest that nearly 20 percent of seniors may be victimized at some point. "It is crucial that others know how to look out for them."
Specifically, the CFPB wants banks and credit unions to:
Train employees to prevent, detect and respond to financial abuse. There are warning signs every banker should watch for.
Develop fraud detection software to uncover suspicious account activity, including transactions often associated with fraud against senior citizens. The software should include "predictive analytics" to monitor anything that deviates from someone's normal pattern of transactions or suggests involvement with scams known to target seniors.
Offer opt-in account options, such as limits on cash withdrawals that are large or outside of a certain geographic boundary. Other possible options: account alerts and view-only access for trusted third parties, such as a close relative or attorney or financial adviser.
Report suspicious activity to federal, state and local authorities. "Just as a reminder," Cordray said, "we joined with seven other financial regulators three years ago to clarify that financial institutions generally are able to report suspected financial abuse of older adults to the appropriate authorities without violating any privacy provisions in the federal banking laws."
Allow older consumers to provide advance consent to have the financial institution share account information with a trusted relative or friend if something suspicious is going on.
Fraud and scams can range from theft involving a caregiver, to large voluntary cash withdrawals to give to someone who claims to need money. Other victims fall for lottery or prize scams, or fake charities.
Banks and credit unions play a critical role, Cordray said, "because they know their customers well and often have more opportunity to deal with older consumers face to face when they engage in transactions."
Here's what a few of the largest banks in Cleveland said they do for older customers:
Third Federal Savings:
"Third Federal already addresses many of the CFPB's recommendations around protecting customers from fraud/abuse," said spokesman Dave Reavis.
"We do this through regular internal training, reporting suspicious activity, using predictive analytics (for all our customers) and offering age-friendly services such as account alerts. We regularly conduct branch and customer service training to prevent elderly exploitation and scams, and have done so for several years."
The bank offers training to detect and prevent the exploitation of older customers. "Our corporate security team regularly meets with our retail banking team to discuss how they can assist customers to identify and avoid fraudulent scams," Reavis said.
Tellers also have a standard "cash withdrawal letter" that they can give to a customer at their discretion if the customer wants to withdraw a large sum of cash and the bank encourages him or her to use a cashier's check or official check instead. The letter emphasizes the risks of withdrawing big sums of cash.
Third Federal also relies on "know your customer" practices. That means knowing a customer's normal banking patterns and proactively discussing any transaction that seems unusual, Reavis said, adding, "while the elderly are often the target, we train our associates to look for scams from all customers."
The bank also posts signs and distributes flyers in the branches to educate customers about possible scams. And it regularly works with law enforcement and adult protective services.
PNC:
The second-largest bank operating in Cleveland has a "comprehensive policy regarding financial exploitation of older and vulnerable adults," said spokeswoman Marcey Zwiebel. Two years ago, PNC adopted a companywide policy to detect and report exploitation.
"PNC is committed to its customers' financial well-being and to building a relationship of trust," she said. "PNC's policy is intended to protect customers who may have been victimized." Bank procedures identify "certain red flags that may indicate possible exploitation of an elder or vulnerable adult, based on standards established by the Financial Crimes Enforcement Network, among other sources," she said.
The bank also has procedures for reporting suspected exploitation so that it gets attention within PNC. Employees who deal with elderly and vulnerable adults must receive training and go through refresher training every other year.
Fifth Third:
The bank trains employees to watch for warning signs of fraud, "and we often assist when we see an issue arise," said spokeswoman Laura Passerallo. The bank also does outreach to nursing homes and assisted living facilities to alert consumers about how to be on guard for fraud and scams.
The bank doesn't offer view-only accounts or opt-in alerts for third parties.
We don't have any view only accounts or opt-in alerts for trusted loved ones. They would have to be set up as joint account holders.
KeyBank:
Key's approach to protecting customers -- older folks and others at risk -- is simple: "If we see something, we say something," said spokeswoman Drez Jennings.
The bank requires training for all employees who work with customers to watch "for unusual transactions or changes in how clients interact with them," she said.
They also watch for signs of physical or emotional abuse that might be precursors to financial crime, Jennings said.
Growing awareness has led to an increase in employees reporting possible abuse or fraud to the bank's corporate investigations team. Employees also regularly report concerns to Adult Protective Services.
"We also place a priority on protecting our clients' right to privacy," Jennings said, "and their right to personal independence."
Huntington:
The Columbus-based bank requires training for "front-line employees" to help them circumvent elder abuse, said spokesman Bill Eiler. Bank employees "have a strong track record of looking out for our customers if they perceive anything suspicious. Our employees are always alert for red flags and are encouraged to escalate concerns whenever they perceive something that does not seem right," he said.
Huntington doesn't currently have view-only accounts, although a customer could provide power of attorney to a trusted loved one to allow that person access.
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Banks urged to do more to protect senior citizens; here's what Cleveland banks do
