The Consumer Financial Protection Bureau said on Wednesday (March 23) that it has issued an advisory alongside a report detailing recommendations for financial institutions, ranging from credit unions to banks, offering information on how to recognize, report and also prevent financial exploitation of older customers.
The bureau stated that the exploitation is tied to the improper use of funds, property or other types of assets, and it costs those victims billions of dollars annually, said the report.
These consumers represent attractive targets for perpetrators of such abuse, said the CFPB, because they have relatively more in terms of assets in general or in equity tied to property, with additional streams of income, such as a pension or Social Security. They also tend to have health problems, with isolation or cognitive dysfunction, and thus are vulnerable. The CFPB said 17 percent of seniors say they have been the victim of such fraud, but many cases go unreported.
The CFPB guidelines offer up, for the first time, a series of voluntary best practices to guide banks and credit unions. The recommendations include, but are not limited to, training staff to recognize abuse, with technologies in place to detect unusual activity, and also to offer assistance in planning for age-related events. In addition, the financial institutions can offer “age-friendly products,” such as opt-in automatic cash withdrawals. Firms should also be proactive in reporting suspicious activity to the proper local, state and federal authorities.
In a statement that accompanied the release, CFPB Director Richard Cordray stated: “This action gives financial institutions best practices and tools to protect older consumers from financial abuse. When seniors fall prey to a scam by a stranger or to theft by a family member, they may be too embarrassed or too frail to report it. Banks and credit unions are uniquely positioned to look out for older Americans and take action to protect them.”