Banks can help to fight “elder financial exploitation”
Reported instances of elder financial exploitation are on the rise. The Consumer Financial Protection Bureau (CFPB) has attempted to track the losses and its estimates range wildly, somewhere between $2.9 and $36 billion per year. This significant spread is caused mainly by the difficulties in determining actual abuse cases versus innocent changes in a customer’s normal banking behavior, such as covering an unexpected home repair or sudden increase in medical costs.
How to spot red flags
Customer-facing staff (tellers) on the front line and operations employees on the back.
Members of this elderly demographic tend to be loyal to routine; they usually visit the branch on certain days of the week or a specific time of the month, usually to conduct the same transactions. Changes in these patterns could potentially serve as warning signs.
Back-office personnel have the ability to view an account over its lifespan and more precisely pinpoint erratic account patterns, including frequent overdraft charges, balances start to decrease after a change in living circumstances or caregivers, increases in ATM withdrawals.
Often credit card companies have a handle on fraudulent usage with automated analysis of purchases. Over the past ten years or so, I have had 4-5 instances where fraudulent purchases were attempted and caught by the credit card company before I was aware of the fraud. At least 3 of these instances were initiated when I paid for gasoline at the pump. Now, I only pay for gasoline at the pump if it is a highly reputable gas station or convenience store that I use frequently. Otherwise, I pay inside, but never leave my card with the cashier. If I pay inside, I purchase a set amount of gasoline, not an unknown fill-up.
Banks may or may not have this ability for usage of ATM (debit) cards. I never use an ATM (debit) card for anything except cash withdrawals from an ATM machine at a bank. If someone gains access to your bank funds through fraud, it could take a couple of days, weeks or longer (if ever) before you have your stolen money back. That’s your money that is missing, at least temporarily. Whereas, if you use a credit card, your cash/bank funds are not affected.
Get to know your bank branch personnel. If at all possible, frequent the same bank branch. If possible, inform bank branch personnel if/when there is a change in your money handling methods. If you need assistance, assign a financial power of attorney to someone you trust. Trust is a key word.
If your credit, ATM, or debit card is lost or stolen, federal law limits your liability for unauthorized charges. Your protection against unauthorized charges depends on the type of card – and when you report the loss.
Credit Card Loss or Fraudulent Charges
Under the Fair Credit Billing Act (FCBA), your liability for unauthorized use of your credit card tops out at $50. However, if you report the loss before your credit card is used, the FCBA says you are not responsible for any charges you didn’t authorize. If your credit card number is stolen, but not the card, you are not liable for unauthorized use.
ATM or Debit Card Loss or Fraudulent Transfers.
- If you report an ATM or debit card missing before someone uses it, the Electronic Fund Transfer Act (EFTA) says you are not responsible for any unauthorized transactions.
- If someone makes unauthorized transactions with your debit card number, but your card is not lost, you are not liable for those transactions if you report them within 60 days of your statement being sent to you.
- If someone uses your ATM or debit card before you report it lost or stolen, your liability depends on how quickly you report it. If your ATM or debit card is lost or stolen and you report the lost or stolen card,
- Within 2 business days after you learn about the loss or theft.- your maximum loss is $50
- More than 2 business days after you learn about the loss or theft, but less than 60 calendar days after your statement is sent to you – your maximum loss is $500
- More than 60 calendar days after your statement is sent to you – your maximum loss is “All the money taken from your ATM/debit card account, and possibly more; for example, money in accounts linked to your debit account.”