From Reactive to Proactive: The next layer in fraud defense for older adults and caregivers
By Becky Ross, Head of Marketing, Carefull
Multi-layered problems need multi-layered solutions.
The fraud landscape has changed, especially for older adults. While traditional tools such as basic authentication systems and simple transaction checks have long been a backbone of financial institution defense, they’re no longer enough. The biggest threat today isn’t stolen credentials or forged checks – it’s emotional manipulation. Scammers now use persuasion, urgency, and perceived trust to convince members to willingly send money or share sensitive information.
These socially engineered scams have surged, becoming the most common type of fraud reported by financial institutions (FIs). Scam-related losses rose 121% in 2024 alone, according to PYMNTS. What makes these scams so dangerous is that the transactions are technically authorized, allowing them to slip through the cracks of most back-office fraud systems.
To keep pace, credit unions must layer smarter, proactive member-focused solutions on top of their existing fraud infrastructure. A LexisNexis study found that institutions using a wide range of fraud tools saw 41% lower losses than those relying on fewer methods. The missing link in fraud prevention is end-user engagement. When AI and behavioral intelligence are designed around how real people, especially older adults, read, click, and respond, members can help protect themselves, loop in trusted family members, and unlock the full value of proactive alerts, education, and holistic account monitoring.
Fraud Detection: Catching what traditional tools miss
Many fraud prevention tools are designed to catch transactional fraud such as check washing, account takeovers, or unauthorized logins. While these tools are needed, they only address a portion of the risk. What happens when fraudsters manipulate members into transferring funds themselves or sharing credentials willingly? The transaction seems legitimate, so traditional detection tools likely won’t flag it as fraud.
That’s why credit unions should invest in technologies built to detect more complicated socially engineered scams like romance scams, money mule scams, and grandparent scams. Innovative tools that incorporate behavioral analytics powered by machine learning and AI can spot subtle changes in how someone normally interacts with their accounts—such as unusual withdrawal patterns, abnormal transaction timing, or high-risk transfer behavior. The real value emerges when these insights are paired with extensive knowledge of how older adults behave, the latest fraud and scam threats, and combined into experiences members actually understand, trust, and want to engage with.
Account Alerts: The basics aren’t enough
Credit unions often already provide account alerts, but these standard alerts catch only a fraction of the threats, and the real risks are often lost in the sea of irrelevant alerts. To be effective, alerts must be clear, smart, specific, actionable, and based on the known patterns of behavior for the specific individual. This is backed by a recent survey of financial institutions by KPMG.
Alerts must be delivered in a way people won’t ignore with clear language, calm tone, and specific guidance on what to do next. This becomes especially important when talking about older adults. When members feel supported rather than blamed or overwhelmed, they’re far more likely to pause, question, and act.
Alerts shouldn’t stop with the member. When alerts are shared with trusted contacts, families become an active part of the fraud prevention process, helping loved ones pause, validate suspicious requests, and make informed decisions in moments when scams rely on isolation and urgency to succeed.
Comprehensive Monitoring: Protection across accounts
Providing members with full financial monitoring across an array of accounts expands a credit union’s line of sight, but just as importantly, it expands the member’s understanding of their own financial life and potential risks. Today’s members often manage multiple accounts across various financial institutions and platforms such as Venmo, Zelle, PayPal, investment apps, and even crypto wallets, making it difficult to recognize risk when activity is viewed in isolation.
For example, a member’s credit union account shows a $200 grocery charge, which looks normal on its own. But paired with a new Venmo account sending odd transfers to unfamiliar names, this could signal a gift card scam or mule activity. Without a comprehensive view across accounts, these patterns are easy to miss, by both institutions and members.
When members can see this wider picture themselves, and understand why certain activities look risky, they’re better equipped to pause, question, and take action. This trust encourages earlier intervention and helps people address small warning signs before they escalate into catastrophic financial events, especially for older adults who benefit from clarity, context, and reassurance rather than complex or fragmented alerts.
Staff Training: Building a fraud-aware team
While technology is essential in detecting fraud, human involvement remains crucial. Employees need to be trained to identify signs of fraud and respond appropriately. Regular staff training ensures that employees are up-to-date on the latest fraud tactics and know how to handle suspicious activities.
Credit unions that train their employees to detect and report fraud are more effective in protecting members from losing money to fraud. A study by AARP found that FI employees who underwent training reported four times as many suspicious incidents and saved older adults 16 times as much money over a six-month period as untrained employees did. A teller notices a member nervously asking how to wire money to “fix a problem with their computer.” With the right training, the teller intervenes, halting a tech support scam before the money leaves the account. This protects the member and the credit union.
Having a well trained in-house team is important, but it is also helpful to have a partner that has a team of fraud experts ready to step in and handle memberr concerns. For older adults in particular, having a knowledgeable human slow the conversation down, walk through details more than once, and validate concerns can be the difference between hesitation and action. This added layer of support reduces confusion, reinforces education at the moment it matters most, and helps prevent emotionally driven decisions that scammers rely on.
Member Awareness: Strengthening the weakest link
Member awareness is often the weakest link in the fraud prevention chain. Unfortunately, the least-prepared individuals are often the most targeted, and most vulnerable, while educated members are less likely to engage when targeted, according to the FINRA Investor Education Foundation.
Credit unions should provide ongoing education about common scams – phishing, identity theft, social engineering – and how to avoid them. This can’t be one-and-done. Effective programs use multiple touchpoints: emails, web content, in-branch materials, workshops, and webinars.
The key is meeting people where they are. Education must be approachable, relevant, and designed for how real people consume information, especially older adults who may prefer clear explanations, reassurance, and the ability to involve trusted family members.
Bottom Line
Scams are no longer purely technical. They’re emotional, manipulative, and personal. That’s why credit unions must evolve beyond back-office tools to layer in forward-facing, intelligent defenses that protect members before, during, and after fraud attempts. Behavioral analytics, smarter alerts, full financial monitoring, family engagement tools and education help credit unions reduce losses, build trust, and protect members from increasingly personal and sophisticated scams.
Don’t stop at back-office solutions. You must also layer in member-facing tools that empower members directly. Tools that not only detect fraud but also prevent it by helping people recognize and respond to suspicious activity in real time. When members are actively engaged, supported by AI, behavioral insights, proactive education, and family involvement, the rest of the fraud stack finally clicks into place.
These efforts don’t just reduce financial losses; they build trust, safeguard reputations, and protect members from irreversible harm. As scams grow more personal and sophisticated, credit unions must be just as smart, vigilant, and proactive. A layered approach isn’t just a defense, it’s a competitive advantage.
Connect with Carefull to learn how your credit union can provide a multi-layered approach to fraud prevention.
