Financial institutions are reporting an increasing number of suspicious activities involving financial abuse targeting older adults, according to a new government analysis.
Financial companies in 2017 filed 63,500 reports with the Treasury Department of suspected cases of financial exploitation of older adults—though the age range is undefined—up 19% from a year earlier, and nearly three times the level reported in 2014, according to a report released Wednesday by the Consumer Financial Protection Bureau.
The financial damage related to suspected activities in 2017 totaled $1.7 billion, the CFPB report said. When a monetary loss occurred, seniors lost $34,200 on average. In 7% of the cases, the losses exceeded $100,000.
Treasury doesn’t specify who is considered “elder,” and nearly 30% of reports filed by financial institutions don’t specify the age of the targeted older adult. One-third of all filings involved targets 80 and older. Those in their 70s accounted for 23%, and those in their 60s made up 13%.
Most of the reports in 2017, 58%, were filed by businesses that provide money-transfer services, including Western Union Co. and MoneyGram International Inc. Banks and other depository institutions accounted for 35% of the filings, with the remaining 7% coming from other types of businesses such as brokerage firms.
The CFPB report analyzed suspicious-activity reports on financial abuse of senior citizens filed between 2013 and 2017 with the Financial Crimes Enforcement Network, part of the Treasury Department.
The analysis offers a rare overview of practices that appear to be rapidly spreading as baby boomers reach retirement age. While the available data suggest a growing problem, its extent is largely unknown. Many cases go unreported, partly because the victims often feel too embarrassed to speak up or fear the loss of independence.
The CFPB said the number of filings reported in 2017 may account for less than 2% of actual incidents. Researchers estimate as few as 3.5% and as many as 15% of seniors may fall victim to financial exploitation.
The U.S. Census estimates that there were 71 million people age 60 and older in 2017.
Fewer than one-third of the filed cases indicated that the financial institutions reported the suspicious activity to law enforcement or state adult-protective services.
The types of suspected activities differed greatly depending on the kinds of businesses that filed the reports. At money-services businesses, 69% of the cases between 2013 and 2017 involved scams, such as online-dating schemes in which victims are deceived into relationships before being swindled out of their savings. Scams purporting to involve lottery winnings and grandchildren in trouble are other types of scams that involve money transfers.
“Money services businesses could prevent more losses by blocking money transfers to people who previously aroused suspicion, providing conspicuous warnings about current scams on money transfer forms and thoroughly training all agents,” the CFPB said in the report.
In contrast, at depository institutions, only 27% of reported cases were scams. Instead, many involved theft of funds from checking or savings accounts by those who were known to the victims, such as family members or caregivers, the CFPB said.
The losses were far greater when the suspected perpetrators were known persons. While the average loss in cases involving strangers was $17,000, it was $42,700 in cases involving a family member and $57,800 in those involving nonfamily caregivers.
The average length of time of suspected activities was approximately four months. The duration was longer when a family member was involved (197 days) and when the targeted person had diminished capacity (158 days).