Elder financial exploitation, also referred as EFE is a growing problem. As the U.S population continues to age, according to a report issued by the Consumer Financial Protection Bureau (CFPB) the issue can be expected to get worse instead of better. The number of suspicious activity reports (SARs) which were filed by banks, credit unions, as well as other money services businesses is growing staggeringly high. The monetary losses are also growing both for seniors and the agencies which are filing the reports.
Reported Losses or Attempts
During 2014, the initial year of the study, actual losses or attempts at monetary theft were already at a high level. During that year, the total was $931 million in losses and attempts. Merely three years later, that number has grown to a staggering $1.7 billion dollars, an increase of 54 percent.
Following is a recap of some of the other statistics this report revealed the following about financial institutions.
These are typical depository institutions such as banks, credit unions, and stockbrokers’ offices. Nearly 80 percent of the SARs filed resulted in direct financial losses to either the senior who was victimized, or to the institution reporting the activity. In total, between April of 2013 and December of 2017, these institutions reported $6 billion in attempts or actual losses when filing an SARs based on EFE.
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Actual Monetary Losses Regarding EFE
When SARs were analyzed, one breakdown showed the actual monetary losses which were incurred either by victims or the institution involved. Statistically, 80 percent resulted in an actual loss. In 28 percent of the instances, the loss or attempt of theft of the victim’s funds were successful. Only in about 15 percent in total resulted in no monetary loss. These instances involved cases where a refund was issued, or the actual transaction was rescinded or blocked resulting in no actual financial loss.
Concerns About Age of Victims
Unfortunately, one of the starkest reminders of the threat of elder financial exploitation is the age of the victims. In nearly all cases, the older the victim, the more likely they were to suffer a financial loss. Additionally, the average amount lost went up in proportion to the increase in age of the victim.
Approximately 75 percent of older seniors lost money per the SARs which were filed. In only nine percent of these cases, the loss was the financial institution. As if this number isn’t staggering enough, in seven percent of the losses, the total amount was greater than $100,000. No financial institution bore this significant a monetary loss.
Monetary losses also seemed to increase with the age of the victim. More than one-third of all victims were over the age of 80. Unfortunately, nearly a third of the SARs filed did not contain the victim’s age which means this number is likely significantly higher. By some estimates, the report indicates those over the age of 80 may have been the target more than 40 percent of the time.
The highest average monetary losses were recorded in the 70 – 79 age group. This group lost an average of $45,300 while the loss for those between 50 – 69 averaged $22,000. Sadly, this report also indicated that when the victim knew the person who was exploiting them, the financial losses were even greater.
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Chime is a financial technology company, not a bank, offering digital banking services through a convenient mobile app.
Attempts for EFE Can Be Thwarted
One point of note which is relevant to remain aware of is that there are possible ways to identify problems before they occur. In most cases, attempts at exploitation of seniors was able to be thwarted by either bank tellers, or those who were vigilant at wire offices and check cashing facilities.
Keep in mind, a senior who is being taken advantage of is likely in a position where they feel somewhat isolated. The older the senior, the more isolated they are likely to feel. Those who are attempting to take advantage of older adults know this, and they will do everything possible to capitalize on these feelings of isolation. This means the senior who lives alone, who has an in-house caretaker, or the senior who has very few family members living in proximity are likely to become victims of someone taking advantage of them.
Family members who take advantage of their senior relatives is unfortunately a trend that most of us find appalling. However, the fact is, it is not uncommon for family members to be appointed as a power of attorney for a senior who is unable to manage their own finances. Unfortunately, it’s not only family members who are appointed; in some instances, an attorney, family friend, or other trusted advisor is appointed. None of these situations ensures a senior is safe from financial exploitation.
Everyone should also be aware that few of these instances of EFE are reported to the proper law enforcement officers nor are they reported to social services agencies who might help a victim. Too often, the only knowledge anyone has that a senior is being victimized is the filing of the SAR where a victim merely becomes a statistic. You can read more about this disturbing trend in the increase of losses for victims of financial exploitation in the CFPB report.
