Do you know what the “Senior Safe Act” is and how it can protect your personal finances or those of an older loved one?
Seniors are often preyed upon by financial scammers and con artists. Few seniors know about it, but they have a special layer of defense against fraud – according to law, employees of financial services firms have to be trained to spot and report suspected financial abuse of customers over age 65.
Although frontline employees have been asked to flag suspicious behavior to authorities for years, the Senior Safe Act of 2018 made it easier for financial institutions to work with prosecutors. “Elder fraud is a complex issue,” says Sam Kunjukunju, senior director of bank community engagement with the American Bankers Association Foundation. “The whole purpose of [the law] is to encourage a collaborative effort.”
The National Council on Aging estimates that financial exploitation costs older adults between $2.6 billion and $36.5 billion each year. Many victims never come forward. The National Adult Protective Services Association estimates that only 1 in every 44 cases of financial abuse is ever reported. Once they realize they have been bilked out of sometimes their life savings, few seniors come forward out of embarrassment. This is the main reason why such crimes go unreported and exactly why the Senior Safe Act was created to put the onus on financial institutions to recognize and report suspected acts of financial elder abuse.
Anyone can become a victim. “We’ve seen folks living Social Security payment to Social Security payment have their entire life savings drained by a home health aid worker, and we’ve seen people who retired from financial management get convinced to wire money to a fake charity,” says Tracy Swaim, enterprise fraud manager at bank holding company HTLF in Dubuque, Iowa.
Financial institutions have been flagging more incidents since the law was enacted. In 2020, more than 36,000 reports of suspected elder financial abuse were filed by depository institutions with the Financial Crimes Enforcement Network, up 49% from 2018.
Reporting incidents is one thing; successfully prosecuting them is another. One of the biggest barriers to investigating potential elder exploitation is obtaining financial records, says Joe Snyder, chair of the Philadelphia Financial Exploitation Prevention Taskforce. Because the Senior Safe Act protects financial firms from liability that report suspected abuse, the expectation is they will more willingly share documentation that can lead to prosecutions.
Some institutions will contact the police if they feel a customer needs immediate help. Otherwise, the matter is investigated further internally by reviewing the customer’s transaction history and the teller’s observations. For example, a teller may become suspicious if a customer withdraws a large sum of money but is reluctant to discuss it. That could be a sign of a scam artist wooing a potential victim with a cash prize that requires paying a fee first. The winner is usually told not to discuss the prize with others. A suspicious teller may follow up with the customer by phone later.
The same red flags that bank employees are trained to notice also can help family members protect loved ones. Those signs include checks written to strangers, ATM withdrawals at odd times, unpaid bills, and newly drawn up financial documents that your loved one doesn’t understand.