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 false pretenses.
• Forgery.
• Seniors are forced to make property transfers or transfers that are completed through lies or deceit.

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 FDIC coverage.
 
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. 

• Read statements as soon as you receive them. Review each withdrawal and deposit for accuracy. Report any inaccuracies to your bank immediately.
• Never leave bank statements or checkbooks in open view around the house, especially if there is an outside caregiver coming into the home.
• Take 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.
• Always 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 back.
• If necessary, get a joint checking account so two signatures are required for withdrawals.
• Consider 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.  

• Log onto your account regularly to check accuracy of transactions. Report any inaccuracies to your bank immediately.
• Never do online banking in a public place such as the library or at a coffee shop. Others may be able to access your information.
• Always initiate contact with your bank yourself. If you receive an email from your bank requesting that you log in or provide personal information, do not.
• 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.

If 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.

Consistently 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.