Five Things Credit Unions Should Do Now to Protect Older Members

By Cameron Huddleston, Director of Education and Content, Carefull
May 21, 2024

Credit unions pride themselves on their relationships with members and their ability to protect their assets. However, the assets of many of their members are increasingly at risk of fraud.

Adults 60 and older hold about 75% of credit union deposits, according to research firm Raddon. Their accounts are routinely targeted by criminals, with losses to elder financial exploitation totaling more than $28 billion annually, according to AARP estimates.

Credit unions must take new steps to keep older adults’ money safe. Not only will this help protect the large asset base of these valuable members, but it can also drive engagement with their younger family members who are involved in aging loved ones’ financial matters.

To support and protect older adults, make sure your credit union is doing these five things.

1. Train Employees to Detect and Report Elder Financial Exploitation

More than half of states now mandate that financial institutions report suspected elder financial exploitation to local law enforcement, adult protective services, or both. However, many financial institutions remain unsure whether to report suspected exploitation due to privacy concerns, according to the Consumer Financial Protection Bureau. And when Suspicious Activity Reports (SARs) are filed, they often aren’t filed directly with local law enforcement or Adult Protective Services – which leads to missed opportunities to stop exploitation.

Credit unions can report suspected exploitation to law enforcement, social services and other government agencies without violating the privacy provisions of the Gramm-Leach-Bliley Act. Review your credit union’s policies to ensure there are clear guidelines for employees on reporting suspected exploitation.

And make sure that staff are trained in how to spot signs of exploitation and report it. Financial institutions that train their employees to detect and report fraud are more effective in protecting older members from losing money to exploitation. A study by AARP and the Virgina Tech Center for Gerontology found that financial institution employees who underwent AARP’s BankSafe training reported five times as many suspicious incidents and saved older adults 16 times as much money over a six-month period as untrained employees did.

2. Use Senior-Specific Technology to Monitor for Fraud, Exploitation and Financial Mistakes

Standard account alerts don’t go far enough to protect against elder fraud and are not designed for risks and behaviors specific to the aging population. Credit unions should offer older members a financial oversight or protection service that does the following:

• Detects and recognizes senior-specific risks such as gift card purchases, recurring donations, unusual transfers, certain merchant categories and scams as they arise in real time
  
• Uses advanced technology across accounts to determine what is “normal” for each individual
• Detects changes in transactional behavior so members can be notified of suspicious activity or even their own money mistakes

Technology for this demographic has evolved beyond spotting “large transactions” and asking members to set their own limits. Older adults may not know what to look for and often don’t have time. Newer services can do this work for them.

For example, Carefull partners with credit unions to provide their older members additional account protection. Carefull’s technology analyzes checking, savings, and credit card accounts 24/7 and alerts to signs of fraud and a variety of issues that can impact older adults’ finances – such as duplicate or missed payments, scams, behavior change and more. Carefull also provides credit and identity monitoring and $1 million in identity theft insurance.

3. Ensure Older Members Have Trusted Contacts

The CFPB’s 2016 advisory on preventing elder financial exploitation included a recommendation that financial institutions enable older account holders to designate a trusted contact. If your credit union isn’t already providing this service, it should.

Asking account holders to designate trusted contacts gives your staff a valuable tool in protecting older members against financial exploitation. Done as part of a technology platform, it also gives credit unions an opportunity to connect with those contacts and potentially bring them in as new members.

Credit unions partnering with the Carefull service have a built-in option for users to add trusted contacts to their accounts, including an ability to grant varying levels of view-only permissions. This makes it easier for credit unions to ensure that their members’ trusted contacts are informed about any potential suspicious activity.

4. Build a Content and Education Flow Specifically for Older Members

A credit union that prioritizes the protection of its older members should actively inform them how to protect their accounts and financial well-being. This includes alerting members to current scams, providing educational material about staying safe online and avoiding fraud, and offering video courses or webinars.

Through its team of financial journalists and experts, Carefull provides all of this content to its financial institution partners. Carefull creates co-branded microsites for partners to share educational materials with members. And those who enroll in Carefull’s safe money-monitoring service receive weekly activity summary emails and monthly email newsletters.

5. Create a Strategy for Ongoing Engagement With Older Members

The days of credit unions simply shifting older adults to “senior checking accounts” are fading. The generation that is near and in retirement holds outsized wealth, is eager to transact actively and will do so for another 20-plus years. This has created a new and evolving set of risks to investments, real estate, credit, and other account products – and opens the door to more involvement from younger generations. Failing to regularly engage a credit union’s older members increases the risk they will fall victim to the $28 billion of elder fraud that happens annually.

A strategy is needed to combine products, technology, and outside partners to establish ongoing senior engagement as part of a credit union’s core offer. It requires training employees and providing them with the tools to spot and report elder financial abuse. It can also include designating a team member with “senior engagement” responsibility to oversee a structured program. If older adults make up a considerable percentage of your credit union’s assets, commit to funding and implementing this sort of holistic strategy.

Connect with Carefull to learn more.

About Carefull

Carefull is a PRT (protect/retain/transfer) service for credit unions purpose-built to protect older members, retain deposits, and bridge to the next generation ahead of wealth transfer. It is the first and only digital platform designed to help credit unions protect the daily finances of seniors while assisting the adult children who often support them.