Elder Financial Exploitation

  • Words 714
  • Pages 2
Download PDF

Elder financial exploitation is unfortunately an ongoing and common issue in the financial industry world today [1]. Elder financial exploitation is the act of an individual, or group of individuals, taking advantage of an elderly person and defrauding them of their assets. This is done by utilizing various known fraud trends including, but not limited to, family scams, technology scams, grandparent scams, and romance scams. Additionally, it is not always scammers or unknown strangers that takes advantage of the elderly. A study done by Keck School of Medicine of The University of Southern California [2] showed that elder financial exploitation is more often perpetrated by trusted family members or close friends of the victim, as opposed to a stranger.

When elder financial exploitation takes place, generally the elderly person is coaxed into giving away their assets in the form of monetary instruments due to a fabricated story made up by a fraudster or a family member with malicious intent. Family members that conduct elder financial exploitation are usually successful due to their close relationship with the potential victim and the dependence the victim may have on the family member. The possible victim trusts this person to take care of them, and this trust is exploited to financially benefit the perpetrator.

Click to get a unique essay

Our writers can write you a new plagiarism-free essay on any topic

Strangers that attempt to take advantage of elderly victims use various scams that prey upon elderly people’s general lack of knowledge of these scams. One common scam, known as a technology scam, occurs where the elderly person is contacted via phone or email and they are told that their personal electronic device (usually a personal computer or laptop) has a virus or some other problem with it. The elderly person is convinced to allow the scammer to access their device via free screen sharing software where they then pretend to do work on it to remedy the aforementioned problem or just lock the device immediately for the benefit of fake billing the victim. The scammer then forces the victim to send them money for either a false service or to simply unlock their device. This benefits the fraudster as they acquire financial gain from the victim without performing a real service.

Another common scam, known as the grandparent scam, consists of a stranger contacting an elderly person to tell them that a family member, usually a grandson or granddaughter, had something happen to them, such as they are in jail or in financial trouble, and needs money sent quickly to aid them [1].

The final scam is a romance scams. A romance scam is when a fraudster will create a fake online dating profile and attempt to lure in unknowing victims and attempt to build an artificial relationship with them in order to get them to send them money or surrender other finances. This is commonly targeted towards the elderly as the fraudster will create either a story to convince the victim they are in need of financial support and prey upon a person’s giving nature and take advantage of their need for companionship [3].

The Consumer Financial Protection Bureau provides information regarding the obligation that banks and other financial institutions have in preventing this activity [4]. It is up to banks, fin-tech companies, money-service-businesses, and anyone else dealing with the potential victims to be vigilant and make sure the transactions they see occurring make sense and do not raise any red flags, due to the critical position that play in the occurrence of this type of activity. They offer a line of defense that is important to catching and stopping this activity before it becomes a significant issue in a victim’s life.

Common red flags to be aware of are for banks or other financial institutions are; large transactions that do not match prior account activity, withdrawing the maximum daily amount of funds from an ATM, money transfers (ACH, e-commerce, or wire transfers) being sent to individuals with no apparent relationship with the victim, especially if they are located internationally, and sudden changes to any relevant financial documents. It is very important for these industries to have quality know your customer (KYC) policies in place, have efficient and accurate transaction monitoring software and alert rules, and have training in place so that employees know what to expect when this type of activity crosses their deskand how to prevent it.  


We use cookies to give you the best experience possible. By continuing we’ll assume you board with our cookie policy.