Despite concerted efforts to stamp out the problem, financial fraud targeting elders continues to flourish. “Elder fraud is rampant,” says Marnie Stewart, president of the Senior Housing Crime Prevention Foundation. 

Seniors often make ideal targets for scammers. “Many are isolated,” Stewart says. “COVID did a number on that. They may have lost a spouse and they’re lonely. Many times, they don’t report the fraud because they’re embarrassed.” 

At the same time, tech-savvy fraudsters are gaining the capacity to run rings around their most vulnerable targets. Artificial intelligence, in particular, is escalating fraud capabilities in some alarming ways.

Technology-fueled fraud

Elder fraud by the numbers

In 2023 in the U.S.:

101,068

Complainants


~$3.4B

Total losses


$33,915

Average dollar loss per complainant


5,920

complainants lost more than $100,000

Source: Federal Bureau of Investigation

Scott McComb is the former chairman of ICBA subsidiary CRA Solutions, which helps banks earn CRA credits through funding elder financial abuse prevention programs. He notes that scammers use AI to quickly and thoroughly investigate a target’s background. 

“Before, you actually had a little bit of work,” says McComb, “but generative AI allows criminals to leverage multiple databases instantly and do their research on the ruse they’re going to use.”

McComb, who is also chairman, president and CEO of $2 billion-asset Heartland Bank in Whitehall, Ohio, points out that criminals now prefer tech-driven fraud. “You don’t need to put a gun in somebody’s face to get $3,000 anymore,” he says. “You can do it on the telephone.”

Kelly Gibbons, senior VP at $675 million-asset 1st National Bank of Scotia in Scotia, N.Y., observes that fraudsters are combining tech skills with greater sophistication in banking and legal system terms to manipulate their targets. During a frightening phone call from a “family member” in distress, for example, the scammer might include a legal case number and then pass the fraud target off to another impersonator of the legal system who references the supposed case number. 

According to Gibbons, a recent fraud target had been told that her grandchild needed cash for bail and that there was a “gag order” on the case. The victim was instructed not to speak to anyone about the case. 

“‘Gag order’ is a really unusual phrase,” she says. “Criminals are very in tune with what banks do and what we ask. They tell the target what to say to the bank, how to say it and how to push back if the bank representative asks questions.”

Gibbons has had several difficult conversations with elders who’ve been targeted for fraud but don’t want to admit it. “It is heartbreaking for someone to lose their hard-earned money to a scam that never should have happened,” she says.

Pathways toward resolution

As a result of these experiences, Gibbons and the 1st National Bank of Scotia team developed an affidavit to be read to the suspected target line by line. The affidavit outlines multiple scenarios, such as different types of coercion or promises the scammer has given or instructions on how the target should speak or not speak with bankers and other third parties. 

“It’s not a legal affidavit. The purpose is for the customer to read through it one by one and have a chance to reflect on the transaction,” explains Gibbons. “We go through all the talking points to see if any have happened with the customer. We add to it every time a new fraud comes up.” 

In response to rising elder fraud, ICBA CRA Solutions has been ramping up its efforts to help community banks earn CRA credits through elder financial abuse prevention programs. Banks can choose to make a loan, an investment or a grant that supports CRA elder abuse prevention programs in housing facilities in their assessment area. All loans and investments are collateralized by CRA‑qualified securities. 

“CRA Solutions offers multiple solutions for community banks,” says McComb. “We have a nationwide database of retirement homes and care facilities that banks can support. It helps the institution qualify for CRA credit, and it’s the right thing to do.”

Bank3 in Memphis, Tenn., chose the community development loan option. “We are an [intermediate small bank], and the regulators grade us according to the community development loans on our books,” says Ed Gentry, EVP and COO for the $450 million-asset community bank. “As our bank gets larger, we hope to eventually [participate in] all three: loans, investments and grants.”

CRA Solutions has two program tiers that both provide turnkey fraud prevention programs for veterans’ homes and residential facilities. Features include educational videos, 24/7 toll-free tip lines, elder financial abuse prevention toolkits and documentation, and support for the bank’s CRA exam. “The turnkey operation makes it very simple for the bank to do what it needs to do to comply with CRA requirements,” Gentry says. 

Heritage Bank in Burlington, Ky., has partnered with ICBA CRA Solutions for three years. Allison Dubbs, the $1.8 billion-asset bank’s SVP of marketing, praises the program. “We’ve been pleased with the organizations [that] ICBA CRA Solutions partners with to improve the quality of life and financial literacy in greater Cincinnati,” she says. “We like to support programs that help seniors enjoy independence and protection against fraud.”

Education is the best defense

Stewart has found that the involvement of community banks gives added credibility to fraud education. “When a local bank comes in and shares their experiences, it becomes more real to the residents,” she says.

One of the more popular features of the CRA Solutions program is “fraud prevention bingo,” a game that Stewart created. The bingo sheet has more than 50 tips, tricks and conversation starters on frauds and scams. “Seniors love bingo, and you’re not lecturing to them; you’re having a conversation,” she says.

Gentry reports that his Bank3 team visited a senior living facility in Jackson, Tenn., and were impressed with how effective the bingo game was in getting elders to open up about their experiences of fraud. “It was amazing,” he recalls. “A few members spoke up and talked about experiences for themselves or family members. They warn the other residents what to be careful of.”

McComb believes that because most community banks know their customer base so well, they’re especially effective at spotting potential fraud. He acknowledges, however, that training is always useful. “You need to train people in the latest scams.” 

Heartland Bank has combined CRA Solutions training with training from local law enforcement to keep bank employees updated on the latest scams. “Our training of elder abuse has seen great effectiveness in our client base,” he reports.

Gentry is enthused about the effectiveness of the CRA Solutions program. “This is a great way for us to make investments back into the community,” he says. “You can make an immediate impact with local seniors that really have a need.”

Elder fraud may be a challenge, but ICBA CRA Solutions partners and others are working together to overcome the threats. “Protecting seniors is paramount, and we love the opportunity to bring banks together with these facilities,” says Stewart. “It’s a win-win as far as we’re concerned.”

Senior Crimestoppers: Enriching seniors’ lives

The enhanced ICBA CRA Solutions tier, Senior Crimestoppers, funds Wish Comes True grants that senior facilities can use to improve their amenities. A facility funded by Memphis, Tenn.- based Bank3 was able to buy equipment for an internet café for residents. “They can congregate there and communicate with their families,” says Ed Gentry, Bank3’s EVP and COO. “It’s nice to see that everybody could use it.”

Heritage Bank sponsors Rosedale Green, a facility in Covington, Ky., that has used Wish Comes True funds for a “slip and slide” outdoor activity as part of a summer carnival. “That was an ‘out of the box’ program,” says Allison Dubbs, SVP of marketing for the Burlington, Ky., bank. “Through ICBA CRA Solutions, we’ve been able to fund sensory rooms and restock arts and crafts programs as well as the slip-and-slide parties. We’re committed to improving the quality of life in our region, so we’ve enjoyed supporting fun activities for our seniors.”