Financial abuse of older adults a growing problem for credit unions | Credit Union Journal

An elderly member of a credit union recently received a phone call informing her that her personal computer was locked and that she would need to wire money to regain control.

“She wired $200,000 because she thought she didn’t have access to her computer. It was a shocking lesson,” said Cynthia Hagan, director of compliance and fraud risk at Vizo Financial Corporate Credit Union, with assets of $7 billion, in Greensboro, North Carolina.

Such cases of financial abuse of older adults are of growing concern to credit unions and other financial institutions. Elder fraud is responsible for more than $3 billion in losses each year, according to the Federal Bureau of Investigation.

Last year, the most common financial crimes with victims over the age of 60 involved “tech support” scams. There were nearly 14,000 reported cases nationwide in 2021, the FBI said.

“Your members rarely come in and admit they’ve been taken advantage of. It’s embarrassing,” said Cynthia Hagan, director of compliance and fraud risk at Vizo Financial Corporate Credit Union.

And those are just the ones that have been reported. Hagan said there is a big stigma attached to being exploited, and so elderly victims often remain silent. Adding to the stigma, most of these crimes are committed by someone the victim trusts, such as a family member or caregiver, according to Hagan, who spoke at the recent CrossState Credit Union conference. Association. CU Reality Check Conference in Hershey, Pennsylvania.

“Your members rarely come in and admit they’ve been taken advantage of. It’s embarrassing,” Hagan said.

Bret Fisher, the new CEO of Achieve Credit Union in Elyria, Ohio, said financial abuse of seniors was on the rise for its members, both from outside scam artists and “vile” family members.

“This is truly one of the most heartbreaking situations we have to deal with in the financial industry,” he said.

Time is the single greatest resource the $179 million credit union devotes to trying to prevent such abuse, Fisher said. He spends a lot of time making sure his security and management educate themselves on the various scams, situations, and red flags that can identify potential abuse situations. Then he devotes time to the next step, which is making sure his staff knows how to have “tough and delicate” conversations with his members.

“The goal being for the member to start realizing the potential abuse and then come to terms with what is happening so that we can then help them take appropriate action,” Fisher said.

One of the hardest parts of elder abuse is trying to get the victim to communicate what’s going on, Fisher said. Credit unions and banks can usually uncover a problem by simply having a conversation, asking the right questions, and maintaining an open and friendly relationship with its members.

“However — and this is the tragic part — sometimes members just can’t believe they’re being taken advantage of and refuse to take action,” Fisher said. “And in some of those cases, it’s hard to help.”

Hagan said some of the warning signs of elder financial abuse include sudden changes in a will or other financial document, or unexplained disappearance of funds.

Credit unions have a responsibility to advocate for these victims, she said. “We play a pivotal role to completely avoid financial loss.”

Michel Poulos, who recently retired as CEO of Michigan First Credit Union in Lathrup Village, Michigan, said there have always been frauds perpetrated against members, but the methods of doing so have changed over the years.

“As more and easier to use electronic channels become available, fraudsters are simply adapting to the new channels,” said Poulos, who had been CEO of the $1.5 billion asset credit union. dollars over the past 22 years.

The credit union has plenty of safeguards in place to help, as well as fraud-aware members, Poulos said. But he warned that scammers rely on members choosing to share personal account information, despite being warned not to.

“Ultimately, fraud prevention requires members to be diligent in protecting their information,” he said. “Without that, it’s difficult for any financial institution to fully protect them.”

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