Educate Your Members to Help Reduce Elder Fraud
By Todd Rovak, CEO, Carefull
November 20, 2024
Elder fraud is growing at a dizzying rate. The number of victims increased 219% and losses soared by 419% from 2021 to 2023. However, those figures likely don’t represent the true scope of the problem because it’s estimated that only 1 in 44 cases of elder fraud is reported. The good news is that credit unions have a simple and powerful tool to help combat fraud: education.
Educating members about fraud is surprisingly effective at decreasing susceptibility. Research by FINRA found that if consumers have heard about a particular scam, they are 80% less likely to engage, and if they do engage, they are 40% less likely to fall victim. This is especially important given the increasing sophistication of scammers. By raising member awareness about fraud, credit unions can keep pace with the threat. As each new scam is revealed to members, the credit union is, in essence, removing the mask of the criminal before the crime can be committed.
Member education can take many forms. Articles detailing the latest scams and how to avoid them are a great place to start. Because scammers look to scale their operations, they will follow a pattern in their interaction. Alerting members to these patterns arms them with the ability to spot warning signs and limit the probability that they will interact with fraudsters.
Beyond articles, creating short videos could also be powerful, adding sight, sound, and motion to the interaction. Regardless of the format, putting these alerts in some kind of monthly roll-up would help education and lead to great engagement from your members.
Member education is only one piece of the puzzle, though. The other key part is educating the frontline staff of your credit unions.
Raising awareness of fraud and scams among staff adds a powerful backstop to protect your older members. The power of a credit union is that there is a real relationship between the staff and members, especially those who have been a member for many years. That means that credit union employees are that much more equipped to identify when an older member’s financial behavior changes. By training the front-line staff to identify the patterns, your staff can put a reason behind their suspicions and raise the issue to the appropriate person, hopefully stopping a small problem before it becomes a big one.
Education, while powerful, also needs to be part of a robust system of prevention and detection. The hard truth is that elder fraud is a never-ending wave crashing on your doorstep. Fraud is going to find its way in, and when it does, detection becomes necessary to uncover and remediate the threat. As scams become more complex, the detection you choose needs to be tailored to the unique threats older members face to be most effective. The threat profile of a person over 55 is different from that of a younger adult. Therefore, having standard fraud protection is often not enough.
The good news is that there is a solution. By staying current on the newest threats and leveraging progressive fraud detection partners, credit unions can start winning the battle against elder fraud.
Connect with Carefull to learn more.
Sources: https://www.fbi.gov/news/press-releases/fbi-highlights-growing-number-of-reported-elder-fraud-cases-ahead-of-world-elder-abuse-awareness day#:~:text=From%202021%20to%202023%2C%20elder,the%20rising%20use%20of%20cryptocurrency.
About Carefull
Carefull is a PRT (protect/retain/transfer) service for credit unions purpose-built to protect older members, retain deposits, and bridge to the next generation ahead of wealth transfer. It is the first and only digital platform designed to help credit unions protect the daily finances of seniors while assisting the adult children who often support them.