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The banking industry should recognize that our population is aging at a dramatic pace. According to the Census Bureau, the number of U.S. citizens age 65 and older will more than triple, particularly between 2015 and 2040.
The recent trend in the banking industry is that a lot of time and energy is being spent trying to figure out how to reach the millennial generation, and that’s important, but it’s equally important to pay attention to and understand the aging population and the challenges they’re going to present to the banking industry over time.
One major issue is theft. Elder financial abuse has been described as the crime of the 21st century. Why? First of all, it’s the law of large numbers. According to the U.S. Department of Health and Human Services Administration on Aging, adults age 65 and older lost approximately $2.9 billion last year as a result of financial exploitation. The more seniors there are, the more opportunity there is for theft.
Studies have shown that as we age, we lose our healthy sense of skepticism.
Shelley Taylor, a professor of psychology at UCLA, recently completed a study that provides solid evidence of this dynamic. Taylor and her colleagues conducted a study where 120 older adults ages 55 to 84, and 120 younger adults were shown 30 photographs of faces. Each age group was asked to rate the people shown in the photos based on how trustworthy they seemed. The faces were intentionally selected to look trustworthy, neutral and untrustworthy.
Both groups reacted in the same way to the trustworthy and neutral faces. However, when reviewing the untrustworthy faces, the younger adults reacted strongly, while the older adults did not. The older adults missed the facial cues that the average person would say are easily distinguished. This study reinforces with visual evidence that older adults exert less effort when judging trustworthiness and therefore become easy targets for financial fraud and exploitation. What’s important for us to take away from this is that older adults are vulnerable, and those of us who are in positions to provide care and protection have a duty to be watchful.
The federal banking regulatory agencies are paying more attention to elder financial abuse, a signal that banks should also pay attention to this issue. Back in September 2013, the Federal Financial Institutions Examination Council issued guidance on Privacy Laws and Reporting Financial Abuse of Older Adults. The guidance is intended to help banks navigate privacy laws and understand what is permissible in the way of information sharing when financial abuse of an older bank customer is suspected.
Also, when the Consumer Financial Protection Bureau, was created, it was created with an Office of Older Americans, and staffed with quality people with extensive backgrounds in elder financial abuse prevention. The OCC recognized and is now well positioned to understand the issues older adults will present to the banking industry. And lastly, the FDIC, working with the CFPB, produced Money Smart for Older Adults, an extension of the FDIC’s popular and well established Money Smart financial literacy training program. Money Smart for Older Adults covers all of the schemes and scams older adults typically fall victim to, so it’s a great resource.
A recent study published by MetLife Mature Market Institute estimates that the financial loss by victims of elder financial crimes and exploitation is more than $2.9 billion a year with approximately 2 million seniors being exploited. Awareness of elder financial abuse is growing rapidly and bankers are often relied upon as the front line of defense in the protection of their customers, and as a provider of prevention education and information for elderly customers
and their adult children. As FDIC Money Smart Partners and trusted providers of elder abuse prevention in our nation’s senior care facilities, banks rely on the Senior Housing Crime Prevention Foundation as a resource for information on a wide range of issues both inside and outside of a traditional long-term care setting. The foundation's knowledge of the older American population and its challenges led to the creation of the “Preventing Elder Financial Abuse Video Toolkit” as tool for the banking industry to use it can educate its communities about this growing epidemic.
The toolkit includes: A 30-minute video in a DVD format; Companion handouts filled with important information customizable with your bank’s logo; A customizable press release
to let your community know the information your bank has to offer; A Train-Your-Staff Guide to help craft your bank’s internal policies and procedures on how to document and report elder financial abuse situations.
Simply: Complete the easy-to-use press release and distribute it to your bank’s media contacts; Personalize and print the handouts for distribution at the event; Make a brief introduction of yourself and your bank show the video;and Answer questions at the end of the video.
We encourage you to invite local law enforcement, a trusted attorney, a trusted financial advisor and your local office of Adult Protective Services to attend your event to help answer specific questions during the Q & A. You can be a hero for providing valuable financial education information to seniors and their family members in your community.
For more information about the Senior Housing Crime Prevention Foundation or to order the toolkit, visit www.SHCPFoundation.org or call (877) 232-0859 for more information.