June 15th, World Elder Abuse Awareness Day, is a reminder to financial institutions of their responsibility to protect and support vulnerable customers and help prevent devastating losses before they occur.

Elder financial exploitation is one of the most underreported and persistent threats facing older customers. In 2024 alone, adults age 60 and older reported $4.9 billion in fraud losses. During the same period, financial institutions filed more than 155,000 Suspicious Activity Reports (SARs) related to elder financial exploitation, representing about $27 billion in suspicious activity. These figures underscore both the scale of the problem and the critical role banks play in identifying and reporting potential exploitation.

Scammers use many tactics to manipulate and deceive vulnerable individuals. Understanding the most common schemes can help us recognize warning signs and better protect our customers. Common scams include:

Older adults may become vulnerable to financial exploitation when scammers use impersonation, repeated contact, urgency, secrecy, or emotional pressure to gain trust. Victims may believe they are responding to a legitimate request, protecting an account, or helping a family member in distress. Scammers also discourage victims from listening to bank employees or others who raise concerns, making timely intervention more difficult.

For community banks, this creates a unique challenge. Unlike many other forms of fraud, victims of elder financial exploitation often do not believe they are being victimized. When a customer believes the scam is legitimate, they may view our efforts to intervene as an obstacle rather than a safeguard. In many cases, the scammer has spent time building trust and creating urgency, making it harder for the customer to accept that they are being deceived. By approaching these conversations with patience, empathy, and clear communication, we can help customers recognize warning signs, ask critical questions, and pause to verify the situation before proceeding. Our role is not only to protect accounts and finances, but also to support customers through what can be a confusing and emotionally charged experience.

Federal agencies have encouraged financial institutions to adopt risk management practices that help identify and respond to elder financial exploitation. Many of these practices align naturally with the relationship-based approach community banks already bring to serving their customers. These include:

In many cases, preventing elder financial exploitation is not about sophisticated technology; it is about a banker who knows the customer, notices something is not right, and takes the time to ask one more question.

When a customer insists on sending the wire, withdrawing the cash, or buying gift cards despite obvious red flags, many bankers ask the same question: “What are we allowed to do?” While the answer varies by state and the specific facts, banks generally have more options than they may realize.

Many states have enacted laws that permit financial institutions to place temporary holds or delays on certain transactions when there is a reasonable belief that elder financial exploitation may be occurring. These laws are intended to give banks time to investigate suspicious activity, contact appropriate parties, and potentially prevent funds from being lost. However, the scope of these protections, the types of transactions covered, notification requirements, and the length of permissible holds vary significantly by state.

Banks may also be able to contact trusted third parties when concerns arise. For example, if an account holder has designated a trusted contact person, the bank may be able to reach out to that individual about potential exploitation or unusual account activity. Depending on state law and applicable privacy requirements, banks may also be permitted to share information with Adult Protective Services, law enforcement, regulators, or other entities involved in investigating suspected exploitation.

Importantly, these actions are generally intended to balance two priorities: protecting vulnerable customers from financial harm while preserving their right to make their own financial decisions. A customer’s age alone is never a sufficient reason to restrict account access or delay a transaction. Instead, banks should rely on documented red flags, established policies, applicable laws, and guidance from legal counsel when determining how to respond.

Because laws differ from state to state, community banks should review institutional policies and consult legal counsel to understand what tools are available in the jurisdictions they serve. Employees should not assume they are powerless to act when exploitation is suspected; rather, they should understand the legal framework governing such actions.

CCI encourages banks to review applicable state laws for additional guidance and protections on detecting, reporting, and preventing elder financial exploitation. Financial institutions should also take advantage of the many tools and resources available through federal agencies, including guidance on trusted contacts, employee training, reporting, and customer education. The strongest defense is often a combination of informed employees, engaged customers, and the trusted relationships community banks have built over generations. By combining sound controls with education and awareness, banks can help protect older adults while preserving the trust at the heart of community banking.

As always, we are happy to answer questions and support our banks in strengthening their efforts to combat elder financial exploitation.