21 Credit union membership differs widely across the country, with some serving a mix of ages, some with a younger membership focused on college campuses and others with a membership comprised largely of older people. While people of all ages can become victims of financial fraud, studies estimate total financial losses from elder financial exploitation to be in the billions of dollars each year. Despite variations in individual estimates, most studies indicate that a large number of older adults lose money due to financial exploitation, with many sustaining significant losses. “I would like to address the common misconception that older adults are more susceptible to financial fraud and scams,” said Deborah Royster, assistant director for the Consumer Financial Protection Bureau’s (CFPB) Office for Older Americans. “In fact, older adults are actually less likely to report losing money to fraud than younger people, according to Consumer Sentinel data.” Data shows that 41% of people in their 20s reported fraud loss while only 18% of people in their 70s reported losing money to scams. However, when older adults do lose money to scams, they experience higher median dollar losses, said Royster. “For example, the median reported loss for people in their 20s was $500 while for people in their 80s, it was $1,500.” Romance and imposter scams, in addition to other types of scams, are responsible for older persons’ loss of significant money, but some credit union staff have seen scenarios where family members take advantage of an elder family member’s diminished capacity, said James Akin, regulatory affairs counsel for NAFCU. “Credit unions are especially sensitive to protecting older adults and often ask us for advice on best practices on how to handle suspected financial abuse,” he said. “They want to know how to recognize potential abuse when interacting with a member in person, how to approach the member with their suspicions and what they are legally required and allowed to do to report suspicions to law enforcement or other agencies.” A common concern is protecting the privacy of the member and their information in reports to other agencies, said Akin. “The [National Credit Union Administration (NCUA)] has said that you can report suspected abuse to law enforcement, social services, and other local, state or federal agencies without violating the privacy provisions of the Gramm-Leach-Bliley Act.” Identifying Fraud Red Flags Activities that might be red flags indicating potential exploitation include unusually large withdrawals or wire or ACH transfers, especially for a member who is on a fixed income, said Akin. “In the branch, staff might notice that the member is visibly upset or scared, or the member might be accompanied by an individual who seems to be controlling the transaction,” he said. “Credit unions are excellent in relationship banking, so tellers get to know members and can recognize atypical behavior. While a member may be reluctant to report financial abuse to others, they may be more open to hearing concerns from someone they know and trust.”
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