Banks & Firms Focusing on Elder Fraud
EVERSAFE CITED IN FORBES & AMERICAN BANKER
Americans over the age of 50 now account for a third of the US population. They also hold 70% of bank deposits, according to a recent piece in the Wall Street Journal. The 24,454 cases of elder fraud reported in 2018 is a number that is 12% higher than 2017 and is nearly double the number from 2013. As Richard Eisenberg outlined in an article for Forbes’ Next Avenue, this fact is not wasted on the regulators—or the financial services industry. Many banks, investment firms, and credit unions are developing fraud and risk strategies to address issues related to vulnerable customers. The Senior Safe Act encourages financial institutions to report cases of suspected exploitation of vulnerable individuals and offers limited liability when they do so, as long as they also provide training to their employees about the ‘red flags’ of elder financial abuse. The piece also highlights the new FINRA Rules, one of which requires broker dealers to take steps to obtain the name of a ‘trusted contact’ when accounts are opened. This designated individual would serve as a contact whom the advisor could reach out to—in cases of suspected exploitation. The Forbes Next Avenue piece quotes Liz Loewy, COO of EverSafe, who suggested that a ‘trusted contact’ could actually be a lifesaver—if they were also willing to receive alerts as to irregular activity on the investor’s accounts.
A February article in American Banker also focused on how banks and firms are viewing new solutions for preventing elder fraud, including the role that technology can play in identifying clients with diminished capacity. The piece cites Larry Santucci, from the Federal Reserve Bank in Philadelphia, who underscores the importance of Artificial Intelligence—and services like EverSafe—to identify signs suggesting that a customer is at risk. ”What is needed, Santucci argues, are programs that can compute the probability that a person will be involved in a fraudulent scam or financially exploited.” Santucci referenced “EverSafe as one example of AI-based software that can detect “diminished financial capacity,” a loss of executive function that prevents you from performing your day-to-day banking tasks.” Clearly, elder fraud prevention is now a front and center issue for financial services professionals.