Brent Weber, a branch manager in Allandale, Tex., for Prosperity Bank, recalls an elderly bank customer who used to come into his branch almost daily to ask employees to help her balance her checkbook.
Fearing the customer was having an increasingly hard time managing her account, Mr. Weber referred her to a local nonprofit program that uses volunteers who are members of AARP, formerly known as the American Association of Retired Persons. The volunteers not only help elderly and disabled people balance their checkbooks but also write checks on their behalf if they are unable to do so.
"This is a good program to help those individuals who can't take care of themselves financially anymore, and can be easily taken advantage of by predators," Mr. Weber said. "By referring customers to this program, it takes the liability out of the bank," should one of its employees give those customers wrong advice.
Prosperity Bank, a unit of the $4.5 billion-asset Prosperity Bancshares Inc. in Houston, has referred about a dozen elderly or disabled customers to AARP volunteers since 2001 and donates about $3,500 annually to support their endeavors.
AARP volunteers work with nonprofits and governmental entities such as state adult protective service agencies. The agencies administer the program and closely monitor the bank accounts of the elderly and disabled participants. Additionally, AARP provides insurance should its volunteers mismanage the accounts.
The AARP program has been in existence since 1981, but with elder financial abuse on the rise, more and more elderly people are seeking help, said Judith Cohart, AARP's national coordinator for the program.
Elder financial abuse has been called "the crime of the 21st century" and is expected to explode as the vast baby-boomer generation reaches that stage of life. As people lose their capacity to manage their finances themselves, they become more vulnerable to scammers - including family members - who want access to their money.
Consequently, the number of people the AARP program serves is growing each year and is projected to top 6,000 in 2006, Ms. Cohart said.
And more and more banks are working with the AARP program, referring customers, opening special accounts participating agencies can monitor, and providing financial support, she said.
"Banks are on the front line in terms of identifying people who may be having trouble keeping track of their account, so it's very helpful when they refer these people to our program," Ms. Cohart said. "We also really appreciate the financial support banks give to us."
The program operates in 23 states, but several large banks are considering substantial grants that could expand it, she said.
Banks are also more attuned to the growing problem of elder financial abuse, because many states are toughening their laws. In California banks can be fined $1,000 if their employees with direct contact or knowledge of an elderly customer's transactions fail to report suspected abuse, or $5,000 if the failure to report was willful. Other states mandating that banks report suspicion of this abuse include Florida, Georgia, and Mississippi.
Lora Bartholomew, a branch manager in Oregon City for Washington Mutual Inc., said Wamu branches in the area waive certain fees, such as for check ordering and some processing functions, for program participants.
Wamu provides technical support to the program and helps agencies monitor the accounts. The Seattle thrift company has opened more than 150 checking accounts on behalf of program participants through Ms. Bartholomew's branch, and she expects that number to double in 2007. Accounts are opened in the name of the customer, the AARP volunteer, and the local agency that monitors the accounts.
"We think this is very important to the community, and we also hope that the participants will continue to bank with us," Ms. Bartholomew said.
