Protecting Seniors from Financial Fraud

If the first three months of the year are any indication, 2024 could break records on the number of fraudsters trying to take advantage of unsuspecting consumers. Mostly what we find is companies illegally claiming to carry federal deposit insurance. The methods vary, but the end result is often the same.

The fraud comes in many forms. For example:

• Some cryptocurrency exchanges falsely claim that their accounts carry FDIC insurance and are therefore as safe as a bank. This was the case with BybitcoinEx, Inc., Upstream and Horizon Globex GmbH (Horizon). They do not carry federal deposit insurance and are NOT as safe as your federally-insured bank or credit union.
• Other companies claim to carry FDIC insurance, either explicitly or implicitly (primarily LLCs—Limited Liability Corporations) but do not. These companies include (but are not limited to) PrizePool, Inc, AmeriStar, LLC, HighLine Gold, LLC, Atmos Financial, PBC, ORGANO Payments, Inc. and its subsidiary OGPay and Zil Money Corporation.
• Then there’s this one that we found particularly bothersome. Fraudsters set up a fake website domain to lure bank customers into believing they were on the actual bank’s website when they were not. This happened to 3½-Star Beach Cities Commercial Bank, Irvine, CA. The correct website address for this bank is www.beachcitiescb.com (note the abbreviation). The illegal website used the full name of the bank. It would be extremely easy mistake the false website for the real one, which of course is what the thieves wanted.

This is not a comprehensive list as it is a moving target, but it gets our point across. Fraudsters abound. It is up to the consumer to protect themselves. That is not an easy task for anyone. Now, consider for a moment that you (or a loved one) has some form of dementia. As our population ages, this situation is becoming more and more common.

According to The National Institute on Aging, money problems may be one of the first signs indicating a person has Alzheimer’s or other form of dementia. Well, you will be pleased to learn that bankers, at least some of them, are prepared to help.

In 2016, the Consumer Financial Protection Bureau (CFPB) recommended that financial institutions train staff to detect and prevent the elderly, dementia or not, from becoming prey to financial abuse. At that time, 17% of seniors reported having been victims of some form of “financial exploitation”. The actual number is assumed to be much higher as most cases are never reported. As the senior population grows, so does this problem.

According to the American Bankers Association (ABA) older Americans hold 65% of U.S. deposit balances. That is both why seniors are frequent targets of fraud and also why it is in the best interest of financial institutions to step in and help. The ABA also reports that elder financial exploitation is THE fastest-growing form of elder abuse. Perpetrators could literally be anyone, from the closest friend or relative to a total stranger.

In 2022 alone, the FBI reported that victims over the age of 60 lost $3.1 billion to scammers.

The Federal Trade Commission (FTC) reports that  scammers exploit people’s trust in their financial institutions. They may convince them to drain their accounts or transfer their money somewhere for safety. In reality, the money gets transferred right into the scammers’ hands.

So what are bankers doing about it?

5-Star First State Bank of St. Charles, MO was the first bank we noticed to latch on to the idea of Dementia Friendly Banking. In addition to having its entire staff trained in how to communicate effectively with a person with Alzheimer’s or dementia, the bank makes it easy to set up a “trusted contact”, someone to help monitor the elder’s accounts.

4-Star First Bank Richmond, IN is another. Staff at all eight branches have been educated and trained on the potentially painful effects of losing mental faculties to disease. They are on the lookout for signs.

Credit unions are coming onboard as well. 4-Star Landings Credit Union, Tempe, AZ is at the front of the line. That’s appropriate since over 16% of Arizona’s population is 65 or older.

There are undoubtedly more dementia friendly financial institutions out there and there will be more yet as time goes on. If you want to know if yours is dementia friendly, give them a call. If it does not already have a system in place, your phone call could be the impetus it needs to get  going and get its staff trained.