Fraud Against Seniors

Seniors are the prime target to be defrauded.  They are the most vulnerable, most trusting individuals with an outstanding credit.  The most attractive traits that fraudsters are looking for.  We need to be aware how devastating a fraudulent scheme against elderly can be, not just financially, but emotionally, mentally and even physically. The most common scams are:

  • Telemarketing that involve free prices, low cost vitamins and health products and cheap vacations
  • Online and purchasing scams
  • Emergency or grandparents
  • Advance fee loan wire payments
  • Online dating wire payments

The above list is also a list of wire payments that were facilitated by Western Union (WU).  The United State Federal Trade Commission (FCT) and the U.S. Justice Department accused WU of wire fraud and money laundering for lack of due diligence and not doing enough to prevent the people from being a fraud victim.  WU agreed to pay $586 million to refund the individuals who used WU to pay scammers between January 1, 2004 to January 19th, 2017.  The deadline to submit a claim is May 31, 2018. For more information and eligibility please visit Federal Trade Commission

What do we need to do as a financial institution to prevent fraud and money laundering, to protect our seniors and to avoid bad reputation?   Money Service Business (MSB) already has a high risk flag attached to it and we all know about de-risking of MSB’s.  An outstanding compliance program should be in place.  Processes and procedures up to the industry standards.  Fintech should be consulted for identification and transaction monitoring.  Artificial Intelligence (AI) is great but human intelligence (HI) is better, hire the right people.  Only human can investigate and suspect an unusual activity.  A crucial component in this business comes down to knowing who your clients are.  Go above and beyond for the elderly.  They are the most vulnerable and oblivious especially to how fast the technology is evolving.  For more information about tech scams click here.

Artificial Intelligence is only a tool kit and support system for human intelligence.  We have the responsibility as AML Analysts, Fraud Examiners, Compliance Officers to detect and mitigate risk.  We also have the responsibility to report these suspicious transactions to our regulators so they can take action.  For more information how to submit a Suspicious Transaction Report (STR) go to FINTRAC (Financial Transactions and Reports Analysis Centre of Canada) if you are a financial institution.  If you are an individual, please visit Voluntary Information page.  In the United States, more information how to file a Suspicious Activity Report (SAR) can be found on FinCEN (Financial Crimes Enforcement Network site.