Keeping Your Bank Account Safe from Fraud
Financial exploitation of
seniors is an increasing problem (National Center on Elder Abuse),
including cases where money is stolen directly from a senior’s bank
account. The research company Gartner Inc. estimates that two million
people in the United States have had money stolen from their bank
accounts in the past year. The average amount lost was $1,200.
We often think that fraud is committed by people we don’t know who gain
access to our personal information. While that can be true, for
seniors, the reality is greater that a family member or caregiver is
the one who takes advantage of them financially. A survey done by the
Adult Protective Services agencies showed that the most common
financial abuser was a son or daughter, accounting for 33% of the
reported cases of fiscal exploitation of seniors age 60 or over.
Red flags for financial abuse to seniors, as reported by the National
Association for Professional Geriatric Care Managers, include:
- Someone is responsible for
paying bills for the senior, but the bills are not paid and there are
not adequate resources to pay for them.
- Unexplained money missing
from the senior’s accounts.
- Family member/caregiver
withdrawing large amounts of money from accounts.
- Someone taking money under
- Seniors are forced to make
property transfers or transfers that are completed through lies or
Fraudulent bank account activity
occurs both through standard accounts and online, so a variety of
safeguards are necessary to defend against fraud. Begin by confirming
that your bank is financially sound and your bank deposits are fully
covered by the FDIC
(Federal Deposit Insurance Corporation). The FDIC is an independent
agency of the federal government that was set up in the 1930s to
preserve and promote public confidence in the U.S. financial system by
insuring deposits in banks. All reputable banks will have
Once you find a bank you are comfortable with, a bank officer can help
you determine a good plan for your specific circumstances and help put
safety measures in place. There are many different precautions
available to ensure the safety of a senior’s bank account.
Standard bank accounts rely heavily on a
paper trail, such as checks, deposit slips, and bank account
statements. With this much information readily available through the
mail and filed within the home, seniors need to create a secure method
for receiving and storing bank account documents.
bank account features just for seniors
Most banks offer special banking opportunities for people 60 and over.
Ask your bank about their offerings for senior citizens. Some of the
common features for senior accounts are:
- Bank fixed deposit.
Seniors can get a slightly higher rate of interest, ranging from 0.25
to 0.75 per cent, depending on the bank.
- Savings scheme. A
higher interest rate is payable on an initial investment that is locked
in for a specified period of time.
- Tax benefit. Seniors
can take a tax benefit in the form of a deduction when they invest in
bank fixed deposits and/or the savings scheme.
To protect standard bank accounts:
banking has become a common and accepted way to manage bank accounts.
It gives consumers immediate access to bank information and the ability
to check that all transactions are accurate. However, fraud can occur
online as well.
statements as soon as you receive them. Review each withdrawal and
deposit for accuracy. Report any inaccuracies to your bank immediately.
leave bank statements or checkbooks in open view around the house,
especially if there is an outside caregiver coming into the home.
precautions with your ATM card. Never lend it to someone or give
another person your password or personal identification number (PIN).
When using your ATM card, shield your transactions from others around
you who may be trying to watch what you are doing.
- Shred old
and unused checks and old bank account statements. Check with your bank
or accountant regarding how long to keep bank records. Store statements
in a secure location and away from visitors to the home.
- Never give anyone a signed blank check.
initiate contact with your bank yourself. If you receive a phone call
from someone saying they are with your bank, hang up and call the bank
- If necessary, get a joint checking account so two signatures are required for withdrawals.
setting up a custodial account. The bank collects the senior’s income
and pays the senior’s bills. If the senior needs money, the bank will
issue a check or debit card so the senior has access to cash.
Precautions to take for online banking include:
- Log onto your account regularly to check accuracy of transactions. Report any inaccuracies to your bank immediately.
do online banking in a public place such as the library or at a coffee
shop. Others may be able to access your information.
initiate contact with your bank yourself. If you receive an email from
your bank requesting that you log in or provide personal information,
- Check for secure connections. One way to do this is to
see if the bank’s site starts with “https.” The “s” means that the URL
address is on a secure server.
- Change your password regularly. A few times a year is recommended.
- Install software barriers such as firewalls, spyware blocking, and anti-virus.
multiple people are involved in the care of a loved one, a plan for
managing the money and putting safeguards in place is even more
important. If each person providing care for the senior has access to
the bank account for his or her part of the care, spotting fraud in the
account would be challenging. If possible, designate one person to
oversee the account, pay bills and provide money or reimbursements to
the people involved in the senior’s care. That way, all money goes
through one place and can be track easily.
monitor bank accounts and immediately report any suspicious activity to
your financial institution for their help in remedying the
situation. A good bank will respond quickly to any questionable
transactions and help you recover lost funds. Protecting your
finances by setting up a sound bank account and banking system for
yourself or a loved one is a proven way to avoid fraud by family
members, caregivers, or strangers.