Denise Hutchings, a Financial Crimes Research Specialist with Verafin, recently provided a list of red flag indicators for financial institutions to consider in connection with possible fraud on elderly accounts. Below is a summary of those red flags indicators.
Three red flag areas of concern deal with (1) Changes in spending and transaction patterns, (2) Changes to accounts and/or documentation, and (3) Changes in Appearance or Demeanor.
1. Changes in Spending and Transaction Patterns
A set of "out-of-sync" check numbers.
A sudden flurry of "bounced" checks and overdraft fees.
Transactions showing multiple small dollar checks posting to the elderly account in the same month. Possible indication of telemarketing or charity scams.
Large withdrawals from a previously inactive account, credit account, or a new joint account.
Increased account use after the addition of a new authorized signer on the account.
Abrupt increases in credit or debit card activity.
Sudden appearance of ATM/Debit Card transactions with no prior history of these before on the account.
Withdrawals or purchases using ATM/Debit Cards that are repetitive over a short period of time. Different patterns of time and location usage of cards as well.
Vulnerable adult appears confused about the account balance or transactions on the account.
A caregiver appears to be getting paid too much or too often.
Significant increases in monthly expenses paid which may indicate that expenses for persons other than the senior are being paid.
Increased cash withdrawal activity, especially when being escorted by another (caregiver, family member, "friend") who appears to be directing the changing account activity.
2. Changes to Accounts and/or Documentation
Recent changes or additions of authorized signers on an elderly account.
Statements are being sent to an address other than the vulnerable adult's home.
Vulnerable adult has no knowledge of newly issued ATM. debit or credit cards.
Sudden appearance of previously uninvolved relatives claiming their rights to a vulnerable adult's affairs and possessions.
Sudden unexplained transfers of assets, particularly real property.
Refinance of vulnerable adult's property, especially when significant cash out from the new loan is taking place.
3. Changes in Appearance or Demeanor
Vulnerable adult has a companion who seems to be "calling the shots".
Change in the vulnerable adult's physical or mental appearance. Signs that could indicate self neglect or early dementia leave the the vulnerable adult open for financial abuse.
Vulnerable adult acknowledges providing personal and private account information to a solicitor via the phone or email.
Excitement about being the "winner" in a sweepstakes, lottery, or email contest.
Comments to the financial institution that indicate confusion on time frames and people in their lives.
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Elder financial abuse is becoming an epidemic and represents such a tragedy to the elderly population who have saved their entire lives for their retirement years. Financial institutions, caregivers, and family members need to be alert to these warning signs that may indicate financial abuse. Sadly, family members are often the source of the financial abuse as they use a vulnerable adult's confusion as cover to steal their assets. The best advice is to closely monitor transactions and follow the paper trail on where funds go.
