WASHINGTON, D.C. (11/13/13)--Credit unions from across the country are working to combat financial elder abuse and exploitation, said the Credit Union National Association Tuesday.
Americans over the age of 60 lost about $2.9 billion from financial abuse in 2010, up 12% from the $2.6 billion lost in 2008, according to research from insurance provider MetLife.
Credit unions are taking several steps to curb this escalating problem, including staff training to identify and report abuse, instituting new computer programs that can recognize irregular activity, and reaching out into the community to help educate vulnerable members about avoiding theft and fraud.
With the uptick in abuse, credit unions also are seeing more legislation designed to protect the vulnerable, aging population. In the past two years, 22 states have enacted elder financial abuse legislation, which often requires financial institutions, including credit unions, to report suspected abuse. Credit union leagues have worked closely with state legislatures to ensure that these new reporting laws protect seniors while also ensuring individual privacy protection.
National Credit Union Administration Chairman Debbie Matz in a letter issued in September to credit unions (Letter 13-CU-08), strongly encouraged credit unions to ensure that their staff members are "trained on the potential signs that might trigger a report of elder abuse or financial exploitation."
Here are examples of credit unions are fighting back against elder abuse:
Walnut Creek, Calif.-based Pacific Service CU was recognized by the NCUA in October for its role in fighting elder abuse. It sponsored the Elder Financial Protection Network, a San Francisco-based nonprofit organization that seeks to raise community awareness, and was praised for supporting state-wide forums as well as providing extensive staff and community training in abuse recognition and prevention.
In North Carolina, where new laws now allow credit unions to report fraud, the state league hosted a day-long summit that included panel discussions on the new reporting requirements, as well as best practices from credit unions and community banks on implementation.
The Montana Credit Union Network worked closely with the state legislature to create new laws to protect seniors. Its work included providing testimony in committees and working with law enforcement, interested parties and other consumer protection groups to ensure that the new legislation incorporated the perspective of financial institutions who are interested in reporting abuse. As a result, two new laws were passed this year that make it easier for prosecutors to prove a senior citizen has been the victim of fraud, and that added a penalty for violation of the Unfair Trade Practices and Consumer Protection Act if the victim is over 60 years of age.
At Fort Smith Dixie Cup FCU, Fort Smith, Ark., fraud prevention exists on a very personal level. Vicki Newton, CEO of the credit union, recalls a situation where an elderly member she knows well came into the credit union. The member was disoriented and needed help with a Medicare issue. Recognizing that the member's state of mind put her in a vulnerable position, Newton immediately called the member's son. "We're a small shop," Newton says. "And with a closed field of membership, it's easier to get to know our members and learn their financial habits. If something doesn't look right, I'm going to catch it."
In St. Paul, Minnesota, Terri Maloney, president of Catholic United Financial CU, has personal experience with identity theft and has made it her mission to help seniors in Minnesota by providing awareness and education. Since conducting her first presentation on identify theft at Catholic United's convention in August, Maloney has been invited to do six more.
Champion CU, Canton, N.C., hosted an Elder Fraud and Financial Exploitation Conference on Oct. 10. Speakers from the attorney general's office, state social services, the postal inspector (to speak about mail fraud) and the sheriff's department provided information about avoiding financial exploitation and scams.
In 2012, Bellco CU, Greenwood Village, Colo., partnered with the Filene Research Institute to pilot a new program called Senior Sentry, which takes proven indicators--or red flags--of elder financial abuse, and applies them in the monitoring of member account activity to generate alerts. The program, which has proven effective in preventing fraud, is exploring options for further development on a larger scale.