LOUIS H. KRUGER
New privacy policy
Financial abuse involving the elderly continues to be an issue of concern and as more reports are filed with local protective agencies, banks are taking the initiative to increase training and emphasize the importance of communication between banks and local law enforcement. And today, more than ever, sensitivity to consumer privacy issues makes taking such action a challenge.
Five years ago the Bank Reporting Project was introduced as a joint effort between the Massachusetts Executive Office of Elder Affairs, the Massachusetts Division of Banks, the Massachusetts Attorney General’s Office and the Massachusetts Bankers Association. In the ensuing years, the program has contributed to the training of thousands of bank employees and contributions to law enforcement to further the fight against financial abuse.
Even so, the number of scams aimed at the elderly is on the rise and, according to some bankers, the scams increasingly are following consumers from the bank branch to the office.
“I have seen more things slipping through the back office as opposed to things happening in the teller line,” said John Mahoney, vice president of retail banking at East Cambridge Savings Bank. “As fewer and fewer people use the traditional branches, the exploiters are following the customers in other directions.”
The best defense, according to Mahoney, is practicing good communication between local banks and police.
“In the [banking] industry you’ll find a heightened emphasis on security, confidentiality and privacy and it’s made us more sensitive to financial exploitation and abuse,” said Mahoney. “The relationship with protective services is as good as ever and we’re always focused on training [employees] how to recognize financial exploitation.”
As bank personnel turnover increases and the elderly population increases, further training is the key strategy to preventing abuse, according to industry professionals.
“We have made progress, and we wish more progress had taken place,” said Jonathan Fielding, regional protective services manager of the North Shore and MetroWest regions for the Massachusetts Executive Office of Elder Affairs. “We’ve trained over 3,000 bank personnel across the state and have three more training programs to do in the first quarter of 2003.”
A Matter of Trust
New to the Bank Reporting Project is the Fraud Alert Form, a sort of permission slip given to elders by a teller or bank employee, which they can opt to sign. The form authorizes bank employees to monitor the consenting senior’s accounts for unusual activity. If there is a potential problem, the teller or bank employee is authorized to speak with the branch manager or security officer and, if necessary, to alert local police or protective services.
“Police officers can see the physical abuse, but not the financial – the important thing is getting the information and banks are the first line of defense when identifying financial exploitation,” said Fielding.
The Bank Reporting Project has extended its training program to include teaching bank employees how to spot a victim or a potential victim of some type of financial fraud.
Dale I. Zelony, director of government relations for the Massachusetts Bankers Association, said banks have a system in place in order to investigate customers without invading the financial privacy of the customer “to make sure the elder is not at risk, and take steps if they are at risk.”
“This training helps to spot situations that warrants reporting or keeping an eye out for,” Zelony said. “When it gets to a point that the bank representative is uncomfortable, they are trained to report it to a designated person within the bank, so that person can investigate a little bit and, if necessary, report it to the local police or Elder Affairs.”
South Shore banks and banks on Cape Cod have seen significant developments in attacking fraud, but according to bankers there, privacy remains a critical issue.
“The main development this year is the privacy policy and the overall feeling is that you have to be on guard a little more with all of the [customer’s] information,” said Louis H. Kruger, senior vice president of the retail division at Plymouth Savings Bank.
The Bank Reporting Project’s privacy policy says that information held at a bank about a customer’s finances or personal accounts cannot be shared with anyone else and, according to Kruger, that policy ensures that other vendors will not divulge personal information.
As Fielding points out, most of the scamming and fraud reports involving the elderly come directly from local law enforcement agencies and not the banks, but he emphasizes that banks play a large role in aiding Elder Affairs in detecting and addressing many such cases.
“When you’re dealing with an abuse case, you see the bruising, but in financial exploitation cases … unless someone doesn’t have their needs met you need to see their paper trail,” said Fielding. “Banks are extremely receptive … as far the amount of cases being solved. The biggest thing is not in the reporting [of abuse], but the relationship between the local banks and law enforcement that has increased.”
Of the financial cases of abuse reported, Fielding said 14 percent of cases were substantiated for financial exploitation and most of the financial cases go directly to the Office of the Attorney General.
“We get involved with our Elder at Risk program, which allows us to get a court order and program information … banks have been receptive,” said Fielding.
Fielding said that, to date, more than 170 banks have become involved in the project. Increased involvement has helped to open the lines of communication and the best advice from Elder Affairs is “showing the community who you are, what you do, and being able to work with everyone in the community,” Fielding said. Even more important is maintaining the customer’s trust.
“We know our customers and we like to think that if activity takes place in accounts that are unusual we go the extra yard to safeguard the customer,” said Kruger. “There needs to be a more proactive approach to make sure that everyone feels comfortable. Know your customer … and not only that, but our customer should know us.”
