On April 18, 2024, the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN) issued a Financial Trend Analysis that discusses Bank Secrecy Act (BSA) data regarding Elder Financial Exploitation (EFE). Per FinCEN, EFE is “the illegal or improper use of an older adult’s funds, property, or assets.” This blog will briefly discuss the patterns and trends FinCEN found when reviewing BSA reports filed between June 15, 2022 and June 15, 2023 that referenced suspicious activity related to EFE. According to FinCEN, there were “155,415 filings over this period indicating roughly $27 billion in EFE-related suspicious activity.”
There are two types of categories that fall under EFE-related suspicious activity. Those two categories are elder theft and elder scams. While they may sound similar, there are differences between the two. Elder theft “involves the theft of an older adult’s assets, funds, or income by a trusted person.” This can be someone such as an adult child or a trusted caretaker. While adult children were cited as most often being identified as elder theft perpetrators, other individuals that may commit this type of crime include in-home care providers, rehab facility workers, and other types of caregivers such as nurses and nurse aides. Sometimes neighbors, or even financial advisors, were perpetrators in this type of EFE. The analysis by FinCEN showed that “caretakers had access to older adults’ banking information, checkbooks, or other personally identifiable information in multiple instances.” Those that committed elder theft appeared to do so unsophisticatedly, and it typically involved perpetrators withdrawing funds from the victim’s account(s) in order to pay their own bills or make purchases.
On the other hand, elder scams are scams that “involve the transfer of money to a stranger or imposter for a promised benefit or good that the older adult did not receive.” The scam most people are probably familiar with hearing about are “romance scams”. These types of scams largely begin with a scammer communicating with their victim through an online dating platform. According to FinCEN’s analysis, victims can fall prey to these types of scams due to multiple factors such as “declining cognitive abilities, loneliness, grief from the recent passing of a loved one, or belief that they are marrying into wealth”. Another type of scam that older adults can fall victim to are “tech support scams”. This type of scam tricks a victim into believing their device has been infected with a virus. Scammers send their victims an alert, such as a pop-up, advising the victim to contact them at a given phone number so that the scammer can “fix” the non-existent virus. When their victim calls the given phone number, the scammer may impersonate a computer company and charge the victim for the fake “repairs”. Per FinCEN, “[o]ften, victims will grant the scammer remote access to their computer, which can lead to installation of malware or compromised personal identifiable information. Tech support scams can be paired with refund scams whereby victims receive an e-mail saying that they purchased antivirus software when they really did not.” Some other types of elder scams cited by FinCEN include lottery scams, grant scams, and employment scams.
Per the analysis, “[a] total of 4,472 financial institutions filed EFE-related BSA reports during the review period, including depository institutions, securities/futures institutions, credit unions, money services businesses (MSBs), insurance companies, credit card companies, lenders, and casinos.” According to FinCEN, credit unions accounted for 8% of the total filings.
Furthermore, based on the analysis, most of the EFE-related BSA reports filed were in reference to elder scams. The analysis goes on to mention that “filers reported an average suspicious activity amount of $129,483, while the median amount reported for elder scams was $33,499. Compared to elder theft, financial institutions appeared to file significantly more BSA reports on elder scams, and the suspicious activity amounts tended to be higher.” Additionally, checks and wire transfers were cited as being the most frequent methods for transmitting funds obtained through these types of scams. Other types of methods to transfer funds that were reported included credit/debit cards (where the perpetrator has access to the victim’s card or information), cash withdrawals (typically at an ATM), and online bill pay.
So, how can your credit union be on the lookout for elder financial exploitation? While many perpetrators of these types of crimes are increasingly finding ways to avoid direct contact with bank and credit union personnel, the analysis does provide some information as to what to be on the lookout for. For example, where elder theft victims are actually brought into a financial institution, filers noted “the likelihood of exploitation” by citing certain types of interactions between perpetrators and their victims “including any nervousness or hesitancy in conducting the transactions and abnormal dialogue between perpetrators and victims.” Additionally, the physical appearance of the victim was cited as “an especially important sign of possible abuse.” Notably, filers also observed that victims who did conduct their transactions in person “often appeared nervous, struggled to maintain a consistent reason for sending their attempted transaction, and may have been on the phone with someone directing their activities throughout the interaction.”
Additionally, credit unions should refer members who may be victims of EFE to the Department of Justice’s National Elder Fraud Hotline at 833-FRAUD-11 or 833-372-8311 “for assistance with reporting suspected fraud to the appropriate government agencies.” EFE victims can also file incident reports to the FBI’s Internet Crime Complaint Center (IC3) and the Federal Trade Commission.
Just announced! America’s Credit Unions’ inaugural Bank Secrecy Act (BSA) Conference is happening November 13-15, 2024, in San Antonio, TX. Designed for credit union professionals responsible for BSA, AML, risk, audit, or fraud, you’ll discover skills to identify and protect your members against financial threats. Plus, earn the new Certified BSA Professional (CBSAP) credential when you pass the exam(s) or renew your BSACS or NCBSO by attending with no exams required.