It's time for credit unions to step up in the fight against elder abuse

My grandmother was a grocer’s wife. She kept the books for my grandfather’s store in the 1950s and 1960s. She and granddaddy were the stereotypical small business owners, with him manning the store and her tallying the numbers (while she kept the house, their children and his parents, but that is a different column). When grandmother went to work for an employer in the late 1960s that offered credit union membership, she jumped at the chance. She was savvy with finances and people that way.

Grandmother believed that the credit union was a financial institution for her and of her, where decisions were made with an eye toward the betterment of the members and the community. She knew her credit union — the tellers, the loan officers, the managers, and the vice presidents. These were the people who notarized her documents and congratulated her on graduation days. She was of a time when banking — life really — was interpersonal, unmediated by screens and notifications, unimpacted by likes or forwards. Relationships were verifiable and trusted, and no one without a reason knew about your vehicles, your divorce, your mortgages or your inheritances. It sounds quaint now. But those are the people who built credit unions.

A few years ago, grandmother brought me a postcard and a letter, one from an unknown Realtor and the other from an unknown institution claiming to need her response within five business days about her mortgage. Grandmother had recently changed some of her property ownership, and these missives were purporting to have information related to her house. They used her full legal name. They looked official. She was concerned.

Grandmother felt that she should call both of the correspondents as requested. Obviously, she explained, someone involved with her estate planning — the lawyer? the credit union? — must have referred these people to her. How else could they know about the recent change?

Amy Flanary-Smith

I pulled out my laptop and sat beside her. I showed her the online county property records, which showed the date on which she had transferred ownership of the property. Then I went to the register of deeds page so I could show her the perfect copies of the deeds, exactly the same as the documents she had tucked away in her right desk drawer. I showed her the county property tax website, where we could see the date on which she paid the taxes on her Buick some months back.

Now I was showing off; I showed her the electrical permits pulled for her neighbor’s sunroom addition. I pulled up my voter registration. Grandmother was agape.

These are the people who built credit unions.

As a group, older adults possess greater resources, less technological savvy and a reticence to admit victimization. These characteristics make them perfect targets for scams.

Whether the scams come from a spoofed phone number pretending to be a loved one in need of money, or an email asserting a problem with Windows that can be fixed with a simple return call, older adults fall prey with devastating results. They do not tell their families of the mistake until significant financial consequences are unavoidable, often being re-victimized before finally seeking help.

As technology makes scams easier, law enforcement and regulators have noted an increase in older adults being victimized. The Department of Justice is writing about it; the Consumer Financial Protection Bureau has issued recommendations as well.

Credit unions are uniquely positioned to lead the way in adopting policies and practices to help older adults avoid being victimized and become comfortable asking questions or seeking help when targeted. As your credit union adopts policies and practices to help protect older adult members, consider:

  • Are employees trained to detect and respond to red flags? One recent con was halted only because an alert employee realized that the older adult was using a cell phone while transacting business, an uncommon occurrence. She asked to speak to the member privately before completing the transaction, and the member disclosed the reason for her withdrawal request. The phone call was a scam artist, using a generated cell number and publicly available information to make the member believe bail money was needed for a relative. The human relation was what stopped the crime.
  • Are members educated about what information the credit union shares with third parties, and also about how the credit union will contact members? I showed grandmother the wealth of information that is available to a nosy neighbor with an internet connection. Do your members understand what information is out there, who puts it there and who can see it? Are they reminded often how the credit union will — and most importantly will not — contact them? Do they know to hang up and then dial their credit union directly if someone claims to be calling from the credit union?
  • Do you offer alternative rights to accounts that allow older adults to protect themselves? Consider offering opt-in account features such as cash withdrawal limits, geographic transaction limits, alerts for specified account activity, and view-only access for authorized third parties.
  • Are you leveraging technology to detect potential fraud? In addition to the opt-in features above, do you have ways to flag atypical use of online banking, wire transfers, and other customer activity that is uncharacteristic? The CFPB recommendations offer a good starting point for this.
  • Are there opportunities to coordinate educational projects with local law enforcement, adult protective services, older account holders and the public? Older adults may not feel as comfortable questioning why someone is calling them, and they may not react with enough skepticism to protect themselves. You may be able to work with local agencies and service organizations that offer educational programs and distribute materials. In the digital world, internet literacy is a component of financial literacy.

Those are just a few of the questions to consider to better protect the grandmothers of your community from financial abuse. By being proactive about these threats, credit unions can further cement their place as financial institutions for and of the people who built them.

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Elder fraud Financial crimes Crime and misconduct Financial literacy
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