Elder fraud is certainly not new, but its incidence has skyrocketed in recent years. According to a February 2019 article appearing in The Wall Street Journal,
more than 63,500 cases of elder fraud were reported in the US in 2017 - an increase of 19% over the previous year. That was three times the number of reports filed in 2014.
According to a 2016 study by the New York State's Office of Children and Family Services, these numbers (as large as they are) are likely understated. The agency estimates that for every elder fraud case reported to authorities, as many as 44 are not, largely as a result of victims being too proud or too embarrassed to admit they were deceived. The result is billions of dollars lost to scammers each year (according to The National Council on Aging).
Seniors are more likely targets for fraud for many reasons:
- They have accumulated more wealth over time
- They often lack technical knowledge
- They are more likely to suffer from mental and physical impairments that leave them more vulnerable
- They often live alone or are isolated as the result of friends passing on and family members moving away for school or work
- They represent a more trusting generation that's less likely to suspect deceptive practices
No one is immune from being a victim, even those who appear to possess cognitive clarity and business savvy. It was Mark Lachs, co-chief of the Division of Geriatrics and Palliative Medicine at New York Presbyterian Hospital, who in 2015 coined the term "age-associated financial vulnerability" and claimed that a person's financial judgment was likely to falter before other cognitive abilities.
Recognizing the growing problem, the government has responded with a number of initiatives at the federal and state levels. In late 2018, the State of Ohio implemented new legislation designed to curtail the number of Ohioans being defrauded. As part of the legislation, financial penalties were increased for people found guilty of stealing from the elderly. In addition, the Ohio Attorney General is required to distribute at least six public awareness publications each year to help educate the elderly and their caregivers about potential scams and warning signs. According to the Ohio Department of Job and Family Services data, more than 3,630 cases of elder exploitation were reported in 2018 in Ohio alone.
Several pieces of proactive legislation have been signed in at the federal level, including the Senior Safe Act which, among other things, provides financial institutions with more authority to report suspected abuse without fear of being sued for violating various privacy laws. If fraudulent activity is suspected, financial institutions also have the option too place a temporary hold on the disbursement of funds.
Key to an institution's ability to help protect its investors is employee education. Many banks, including Cortland Bank, have invested in training that helps employees recognize various scams and help potential victims identify suspicious activity. Our employees are being taught how to report fraud to law enforcement and adult protective services. When possible, we try to secure trusted contacts' information so we can reach out to someone to discuss account activity.
We hope customers understand that our intent in asking additional questions or delaying suspicious disbursements is in their best interests and is being done within the confines of the law.
Cortland Bank is working hard to protect our customers. We recognize that elder fraud is a serious issue and are taking a number of steps to educate our customers and their loved ones to help them from becoming a victim.
We will be following up on this article with other blogs over the coming weeks that will outline some of the more common scams and tips for what can be done to make you a less vulnerable target. Visit our site regularly for ongoing updates on this important topic.
The information and recommendations contained herein is compiled from sources deemed reliable but is not represented to be accurate or complete. In providing this information, neither Cortland Bank or its affiliates are acting as your agent or is offering you any tax, accounting or legal advice.