A recent article in The New York Times suggested that banks may play a key role when it comes to schemes intended to defraud older Americans. Is elder financial abuse a significant problem, especially when many people in the U.S. are dealing with money troubles despite their age?
Financial Elder Abuse
According to The New York Times, older Americans may be particularly susceptible. When it comes to financial fraud, elderly persons tend to be more vulnerable due to their increased financial worries and loneliness. If you are concerned that an elderly loved one has become the victim of financial abuse, you need an experienced elder justice advocate on your side.
While anyone can become a victim, older adults may spend more time at home by themselves and may be more likely to respond to “deceptive pitches that arrive by telephone, mail and the Internet.” And what’s worse is that certain banks have allowed this financial abuse to occur, while some have even benefited monetarily.
Banks as “Quiet Enablers” of Financial Fraud
In recent filings connected to civil suits against Zions Bank of Salt Lake City and First Bank of Delaware, federal authorities indicated that these so-called reputable banks actually played a key role in permitting the fraudulent transfer of money from the accounts of older adults into the hands of scam artists.
For example, Bruno Koch, 83, answered a call from a telemarketer who asked if he’d like to “update his health insurance card.” Naturally, Mr. Koch said yes, he would, and then proceeded to provide that telemarketer with crucial information concerning his bank account. Soon after, Mr. Koch noticed money missing from his account from unauthorized charges, and he never received a new health insurance card. Mr. Koch became a victim of what is known as “mass market fraud.”
He banked with Zions, and as it turns out, the bank actually “served as a gateway between the dubious Internet merchants and their marks,” such as Mr. Koch. The bank also “made money for itself in the process.”
How does this happen? Banks such as Zions collect fees for transactions that seem questionable, but they ignore “warnings of potential fraud,” and in some cases they even “enable dubious merchants to prey on consumers.” The Times describes these banks as “financial conduits and quiet enablers for questionable businesses.” In some cases, banks such as Zions permit billions of dollars of fraud in any given year.
Holding the Banks Accountable
In response to the harmful bystander roles that these banks continue to play, the Justice Department has decided to “take aim” at financial institutions that enable predatory lending and mass market fraud. Michael Blume, the director of the consumer protection branch at the Justice Department, said that he operates under the assumption that banks “can’t close their eyes” to fraud that’s happening under their noses, and if they do, they’ll be held legally responsible.
First Bank of Delaware recently reached a $15 million settlement with the Justice Department after it allowed “merchants to illegally debit accounts more than two million times and siphon more than $100 million.” According to court records, Zions allowed about $39 million to be debited “from hundreds of thousands of accounts,” and the Justice Department intends to hold the bank similarly accountable.
If you suspect that an elderly loved one has been the victim of financial fraud or financial abuse, an experienced attorney can discuss your case with you today.