Remaining Vigilant Against Elder Abuse and Romance Scams
Over the last decade, there has been a significant increase in elder financial abuse and romance scams, drawing significant national media attention. The Federal Trade Commission’s 2024 report highlighted that older adults reported losing more than $1.9 billion to fraud in 2023. Unfortunately, the actual financial losses may be even higher, as many fraudulent activities go unreported.
The report, presented to U.S. Congress, also noted that adults aged 60 and older were more than five times as likely as adults aged 18 to 59 to report losing money to tech support scams.
Credit unions, along with other financial institutions, play a critical role in protecting elderly members from scams and financial exploitation. You can do this by implementing various measures, including training employees to recognize and report red flags, and stepping up other protective efforts.
In a recent #AskaPro webinar hosted by Dawn Pagon, national manager of business development and crisis relations for credit unions, our shareholders, Sara Costanzo and Matt Young broke down everything you need to know abo these critical topics:
- Suspicious activity reporting (SAR)
- Ohio Revised Code 5101.63 Mandatory Reporters
- “See something, say something”
You can watch the full webinar in addition to reviewing our top questions answered in the sections below.
Who is considered an “elder person”?
Across the U.S., there are different definitions of “elderly persons.” Generally, an elderly person is over a certain age, such as 60 or 65. In Ohio, an elderly person is over the age of 60 years old. Some states also include adults of any age who are physically or mentally vulnerable.
What is a romance scam?
These are scenarios when criminals use fake online identities to build romantic relationships and gain trust, followed by manipulating or stealing from their victims. Often, these scams begin on dating sites or social media with scammers quickly professing love and then asking for money for a variety of fabricated reasons.
Romance scams can happen to people of all ages, not just elderly people.
What are common types of fraudulent conduct or activity to watch out for?
Here are some of the common red flags to watch for if you are concerned about elderly fraud or romance scams:
- Taking money from an account that is not theirs
- Signature forgeries on checks or other financial documents
- Using deception, coercion or undue influence to get someone, often an elder person, to sign a deed, will or power of attorney
- Use of an elderly person’s property or possessions without permission
- Promising care, love or services in exchange for money or property and not following through on promises
- Unpaid bills from your elderly member
- Sudden appearance of “new friends”
- Payments for unnecessary services or purchases
What are the common red flag indicators of a romance scam?
Some commons signs and indications of a romance scam that may be influencing your credit union member include a new partner who
- Claims to live, work or be traveling abroad
- Claims to be notably younger than the target
- Quickly professes love to the target
- Has an inconsistent story
- Has a minimal online presence
- Sends general photos of himself/herself traveling, shopping or dining at luxurious locations
- Frequently mentions the idea of meeting and being together soon
- Provides periodic excuses for being unable to make a video call
- Asks for money, often via non-traditional methods such as cryptocurrency or gift cards
- Is combative or tries to divert attention when questioned about his/her intentions
What laws can protect elderly people against fraud or scams?
There are three laws that can help elderly people and their families through these issues, including the Elder Abuse Justice Act, the Bank Secrecy Act, and USA PATRIOT Act Section 314(b) Voluntary.
- Elder Abuse Justice Act: Provides federal resources to, “prevent, detect, treat, understand, intervene and, where appropriate, prosecute elder abuse, neglect and exploitation.” If you have reasonable cause to believe that an adult is being abused, neglected, exploited, or is in a condition which is the result of abuse, neglect or exploitation, you should immediately report this belief to the county department of jobs and family services.
- Bank Secrecy Act (BSA): Credit unions, banks and other financial institutions need to participate in training and education related to BSA regulations. It mandates that U.S. financial institutions assist U.S. government agencies in detecting and preventing money laundering. If you or another credit union employee knows, suspects, or has reason to suspect that any crime or suspicious transaction activity has occurred, you are required to file a suspicious activity report (SAR). Your credit union management must promptly notify its board of directors (or a designated committee of any SAR filed.
Common types of SARs include money laundering, check fraud, mortgage loan fraud, consumer loan fraud, check kiting, counterfeit checks, identity theft and false statements.
It is important to know that a SAR, and any information that reveals the existence of a SAR, is confidential and shall not be disclosed. Any request to disclose a SAR should be declined. They are also not subject to subpoenas. A credit union making a disclosure of any violation of law or regulation to a government agency will be protected from liability.
- USA PATRIOT Act Section 314(b) Voluntary: This law allows financial institutions to voluntarily share information with each other about potential or suspected money laundering activities. Sharing is designed to enhance the detection and prevention of such crimes and provides a safe harbor from liability for participating institutions.
How can I protect my credit union members against financial fraud and romance scams?
Credit unions can assist members, particularly elderly members, in preventing issues related to scams. One way to do this is by providing robust education and resources that inform members about the common indicators of romance scams.
When addressing a member or alerting them to a potential scam, it is advisable to ask non-confrontational questions. For instance, instead of stating, “You might be the victim of a scam,” the team could inquire about the purposes for which members intend to use the funds they are requesting to withdraw or transfer.
Contact Weltman today
Romance scams and fraud can happen to anyone, but elderly people are at a higher risk. It is important to be aware of the signs of financial exploitation and take proactive action to protect your credit union’s or financial institution’s members.
If you have questions on this topic or want to learn more about Weltman’s consumer collections or credit union representation solutions, please contact Sara, Matt, or Dawn today.
This blog is not a solicitation for business, and it is not intended to constitute legal advice on specific matters, create an attorney-client relationship or be legally binding in any way.
