Larry’s Story
My family knows firsthand just how devastating elder financial exploitation can be. My late uncle Larry of Herndon, Virginia, lost more than $3.6 million in the final months of his life to overseas scam artists. A decorated U.S. Navy veteran and a meticulous man all of his life, Uncle Larry was left vulnerable to such an attack after a stroke left him neurologically impaired.
As my legal complaint alleges, Navy Federal Credit Union sent $3.6 million of my uncle Larry’s money in 74 wire transfers to a foreign bank, despite being notified that he was the suspected victim of a fraudulent scheme and in need of Adult Protective Services. Navy Federal processed 42 of those transfers, totaling $2.3 million, after reporting Larry’s behavior to Adult Protective Services and continued to process transfers for months after Adult Protective Services notified Navy Federal that my uncle needed protective services. Larry’s story has been covered in USA Today, NBC4 Washington, The Washington Times, and WAVY-TV (NBC Hampton Roads).
My uncle’s story is tragically common. Financial losses from elder fraud have skyrocketed in recent years. The Federal Bureau of Investigation’s 2022 Elder Fraud Report, released in April of this year, compiles complaints from the FBI’s Internet Crime Complaint Center. Per the report, annual financial losses from elder fraud increased 84% from 2021 to 2022 — to $3.1 billion. For more context on the increase, 2022 losses by seniors in populous California alone nearly eclipsed nationwide losses from just five years ago.
In Virginia, where Uncle Larry lived in the final years of his life, seniors lost over $60 million dollars to fraud last year. What’s more, veterans are twice as likely to fall victim to financial scams, according to a survey from the AARP promoted by the FBI.
Online phishing scams are getting more sophisticated, and the advent of artificial intelligence is likely to make them more numerous and harder to detect. The American population is also aging: the number of Americans aged 65 and older will top roughly 80 million by 2040.
The average dollar loss per victim in the state of Virginia was over $24,000 in 2022. Yet the emotional toll can be even greater. The trauma, shame, and humiliation associated with being scammed are burdens no one should have to bear.
The figures the FBI reports are likely just the tip of the iceberg. A report from the National Adult Protective Services Association estimates that only one in 44 cases of elder financial abuse is ever reported.
A report from the Consumer Financial Protection Bureau recommends that banks use technology to better protect their customers. The CFPB also recommends that banks using predictive analytics — a technology that uses artificial intelligence to identify suspicious activity based on account holders’ patterns of behavior — review their filtering criteria to incorporate all possible risk factors for elder financial exploitation.
However, these scammers are unlikely to ever be stopped solely by technological countermeasures. Progress in fighting them requires human vigilance at known points of detectability. This is why I write to you today. In the case of my Uncle Larry, both his bank and Adult Protective Services were aware that Larry was a suspected victim of elder financial exploitation, but yet this awareness resulted in nothing to stop the 74 international wires Larry sent.
What our seniors need most is better preventive legislation.
Two glaring gaps in banking regulatory policy are abetting those seeking to scam the elderly. Whereas the Financial Industry Regulatory Authority requires brokerage firms to ask customers to identify a “trusted contact” in case of suspicious account activity — allowing quick intervention and verification in case of suspicious transactions — banks and credit unions don’t operate under a similar national requirement. Furthermore, whether or not bank employees are mandated reporters for suspected elder abuse varies by state. In Virginia, banks are not mandated reporters.
These issues aren’t limited to Navy Federal Credit Union. Last year, federal regulators fined USAA Federal Savings Bank $140 million for failing to monitor suspicious activity on customers’ accounts. Last month, the Consumer Financial Protection Bureau required Citizens Bank pay a $9 million penalty for failing to manage and respond to customers’ fraud claims and credit card disputes.
By requiring that banks ask their customers to set up a trusted contact and by mandating that banks across the country report suspicions of fraud to appropriate authorities, we can better protect ourselves and our loved ones from falling victim to fraud.
A dedicated stream of federal funding for Adult Protective Services can help these agencies operate with more consistency from state to state and better intervene, especially when individuals are embarrassed or unaware that they were being scammed.