Community financial institutions, who have long embraced the “know your customer” philosophy, are in a unique position to notice and intervene in elder financial abuse – and as America ages, that role becomes more and more important.

Anecdotally, bankers say that they have noticed more troubling instances of elder financial abuse, though the reasons behind any uptick may be as myriad as the scams and schemes targeting the elderly.

One certainty is that America is aging. According to figures provided by the U.S. Department for Health and Human Services, Americans aged 65 and older numbered about 44.7 million in 2013, the latest figures available on the agency’s website, and represented about one in every seven Americans. That figure is expected to double by 2060.

If for no other reason than the fact that the sheer number of aging Americans is on the rise, financial institutions need to be on the alert for fraud targeted toward the elderly, bankers say. And community financial institutions – banks and credit unions alike – are in a prime position to act as the front lines in stopping financial abuse of senior citizens.

“Branch staff, and particularly managers, have the power to intervene and halt the financial exploitation of a senior in their community,” Larry Poirier, coordinator of the money management program for Mystic Valley Elder Services, said in an email to Banker & Tradesman. “Managers have the authority to refuse transactions they suspect of being fraudulent, and all branch staff may make the critical phone call to a senior services agency such as Mystic Valley Elder Services to file a report with the protective services (or elder abuse) department.”

Bankers describe a range of common schemes targeting the elderly. A common one is the infamous lottery scheme. Phony contractors are another problem, said Ingrid Adade, assistant vice president of financial education at Leominster Credit Union. She also sees seniors sometimes fall prey to scammers who will contact a senior by phone, pretending to be affiliated with Medicare and preying on would-be victims’ lack of knowledge about how the program works.

Another common situation, perhaps worse than a predatory stranger, is a caretaker or younger family member taking advantage of an elderly customer or relative.

“It’s not uncommon for older adults to rely on friends, neighbors or family members for assistance. In the broader sense, this is what we desire: an interconnected, interdependent network of all community members watching out for each other,” said Brian McDonald, who heads the protective services department for Mystic Valley Elder Services. “Sadly, older adults’ particular vulnerabilities, such as isolation or increased frailty, may tempt strangers or family members to target them for exploitation – even if that’s not how the family member thinks of his or her actions. Those who would exploit older adults most frequently target modest assets, such as a home, retirement income, personal savings or Social Security payments.”

Teresa Cunha, vice president and branch administrator of Reading Co-operative Bank, said that branch staff is on the lookout for certain red flags. If, for instance, a normally very talkative customer came in with a caregiver who suddenly does all the talking in the transaction, that may be a warning sign that something is amiss.

But when it’s a family member manipulating a senior, that can complicate the picture for branch staff who might want to intervene.

“That’s a hard one, because oftentimes the senior won’t want to press charges. And they’re embarrassed,” said Liz White, vice president and retail sales manager at North Shore Bank. “The teller would escalate it to a supervisor to try to have that conversation and, if they share it, then we’d be able to refer them to a clergy or somebody else in the family who they could talk to.”

She added, “It would be hard for them, I think, to turn in their grandchild.”

Financial Literacy For Seniors 

Beyond the nefarious scams and schemes targeting the elderly, banks and credit unions are also in a unique position to help their senior customers navigate what can be a trying time in their lives.

A recent study, titled “Old Age and the Decline in Financial Literacy,” suggests that senior citizens may also benefit from some help with managing their money effectively in retirement.

Introducing the subject material, Michael S. Finke and Sandra J. Huston, both of Texas Tech University’s department of personal financial planning, and John S. Howe, of the University of Missouri’s department of finance, write, “Consistent with prior studies of cognitive decline in old age, we find that financial literacy scores decline by about one percentage point each year after age 60.”

Toward that end, community financial institutions like Reading Co-operative and Leominster Credit Union also provide financial literacy tailored to seniors. Reading Co-operative partners with Mystic Valley Elder Services to offer money management assistance to its customers, while Leominster Credit Union also reaches out to local churches to offer assistance where it can.

Being a member of that age cohort herself gives Adade a little bit of an edge in talking to seniors, she said.

“It’s very important to protect the seniors of our community. They have invested a lot of time and have given our community so much. I would say it’s our duty, for lack of a better word, to take extreme caution and care because we have to realize most of our seniors are living on a set income,” Adade said. “If there’s some kind of abuse that is going on, when they come to our financial institution, they’re seeking help in more ways than one.”