June 15 is World Elder Abuse Awareness Day, which is an international call to action to recognize the threat posed by elder abuse, neglect and exploitation. It is a reminder that today, and every day, we need to take time to talk with the elders among our family, friends, neighbors, and communities about the risks of financial scams that target older Minnesotans.
The Minnesota Department of Commerce and Minnesota’s Credit Unions are working on a daily basis to protect vulnerable seniors from these scams through the Safe Seniors Financial Protection Act.
The law provides tools to Minnesota’s financial professionals to identify and report cases of financial abuse of seniors and vulnerable adults. The state law took effect August 1, 2018. In 2020, the law was updated to allow financial institutions – including credit unions and banks – to delay financial transactions where they suspect scams of elder, vulnerable seniors. Since the law passed, it has had a positive impact in protecting older and vulnerable adults in Minnesota against financial fraud.
What does financial fraud look like? The scammers use the Internet and phones to lure vulnerable elders into scams. A scammer may pose as someone’s granddaughter, with an emergency need to wire $1,000 to her, or contact the victim about winning a lottery or prize that requires “prepayment” to claim the prize, or with romance scams, connecting with elderly people online, through Facebook, Words With Friends and then claim to “fall in love” with the victim.
The number of suspected senior financial fraud cases referred to the Commerce Department has grown exponentially since the 2020 law change added credit unions and banks. Year to date for 2021, the investigations have identified over a half million dollars that Commerce has stopped from ending up in the hands of fraudsters.
Older Minnesotans are vulnerable to fraud and financial exploitation due to a combination of factors – social isolation, cognitive decline, and exploiting emotions and people’s good nature. To stop these scammers requires partnerships, such as credit unions and banks identifying potential scams and working with the Commerce Department to investigate.
According to the FTC’s Protecting Older Consumers Report, older adults are being defrauded out of more money through wire transfers than any other method.
We know this from first-hand experience – an employee at Mid Minnesota Federal Credit Union reported an instance where one of their older members came in at the end of the day insisting that they needed to wire a large sum immediately out of the country. Suspecting fraud, the staff member started asking questions and noticed the member holding their purse behind their back and realized the scammer was on the phone listening to the interaction.
The employee was able to persuade the member to go to the police but there are many times when financial institutions are not able to convince the older adult they are being scammed. Commerce investigators have also intervened in many cases where they had to personally convince the older adult to stop participating in the scam.
That is where this law comes into to play. The Safe Senior Protection Act allows financial institutions to notify a trusted third party and temporarily delay a transaction or a hold on funds when there is a reasonable belief of financial exploitation.
The Minnesota Department of Commerce has tips to prevent fraud and how to report suspected cases of financial exploitation of older and vulnerable adults: Senior Safe / Minnesota.gov (mn.gov). Working together in partnership, we can all help protect Minnesota’s seniors from fraud.
Grace Arnold is the Minnesota Commerce Commissioner. Mark Cummins is the president and CEO of Minnesota Credit Union Network.