Because victims’ sense of shame often leaves them reluctant to report such crimes, the extent of elder financial exploitation is hard to calculate. The Federal Trade Commission put reported losses at $2.4 billion in 2024, largely driven by investment and romance scams and impersonations, with total losses much higher.
Americans over 60 lose more than $28 billion annually to financial exploitation, AARP estimated in 2023.
As those numbers rise, because the population is aging and predators are growing increasingly resourceful, banks and investment firms are becoming the first line of defense.
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Until recent years, financial institutions placed “more of an emphasis on the autonomy of the client,” said Pamela Teaster, director of the Virginia Tech Center for Gerontology and an elder abuse researcher. Their approach was, “an adult has the capacity to make poor choices, and we’re going to let them make them,” she added.
But changes in government and industry policies and practices have encouraged greater vigilance. Congress passed the Senior Safe Act in 2018, protecting banks and financial firms from liability if they reported suspected exploitation to authorities.
That year the Financial Industry Regulatory Authority began requiring member firms to ask for a trusted contact person when investors open or update accounts. (The account holder isn’t obliged to provide one, however.) And since 2022, it has allowed firms to place holds on older investors’ transactions if they suspected exploitation was involved.
About half of states have enacted laws that permit financial institutions to deny suspicious transactions or impose holds for specified periods to allow investigations, said Jilenne Gunther, the director of BankSafe.
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Dr. Teaster’s analysis of data from BankSafe, during a six-month pilot in 82 financial institutions, found that participants were much more likely to report suspected cases and save customers money than a control group was.
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A 2024 study by the New York Federal Reserve, for instance, found an increased probability of delinquent payments and deteriorating credit ratings in the five years before a dementia diagnosis. Those errors can reduce seniors’ access to credit and raise their interest rates on loans at the very point when caregiving expenses are likely to soar.
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Several related bills with bipartisan support are also working their way through Congress. The National Strategy for Combating Scams Act would require the F.B.I. to take the lead in coordinating efforts to protect seniors. A bill that restores an I.R.S. deduction would at least provide the consolation of excusing scam victims from paying taxes on money they no longer have.
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