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2:48 PM

The Financial Industry can do more to help elders avoid becoming victims of financial fraud

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The Financial Industry can do more to help elders avoid becoming victims of financial fraud.

Combining Forces to Combat Elder Financial Victimization, a discussion paper recently released by the Payment Card Center of the Federal Reserve Bank of Philadelphia, provided a roadmap of what consumers and the financial industry can do to help elders to avoid the “financial pitfalls” that may occur as consumers, after years of financial independence, age and may no longer be able to manage their own financial affairs.

The paper notes that crimes that prey on seniors are “vastly underreported” which is why we believe the paper merits a post by The Lobster. Since The Lobster often covers financial industry issues and is well-read by members of the financial industry, this post will focus on what the industry, including banks, security firms, regulators, and policy makers can do to address the problem.

The authors outline six questions that financial institutions should be able to answer for consumers. They are:

Is the institution’s staff trained to recognize financial vulnerability
Does the institution use software to monitor potential vulnerably
Whether the institution has monitoring tools for account holders and their financial caregivers
Does the institution offer a emergency contact form and have guidelines for when to use the form to reach out to the emergency contact
Does the institution have a way to prevent power-of-attorney abuse
When it suspects financial fraud is the institution’s policy to report that fraud to law enforcement.

Although the industry has done much to combat fraud, there is much more that can be done. The authors point out that regulators and policy makers have not been proactive in regulating protections against senior financial abuse.

Several factors contribute to the problem. Among these are that seniors are taking on more debt. According to the paper, during one recent 12-year period, borrowing by seniors increased by 60 percent. Seniors may have trouble managing all that debt.The paper cites a 2012 study saying that bankruptcy filing grew fastest among consumers 65 and older. All that debt creates opportunity for late fees, foreclosure and bankruptcy.

 Secondly, the shift from defined benefit plans for retirement to defined contribution plans, such as 401(k) plans places the burden of determining how much to save for retirement on the shoulders of the senior consumers, which creates more chances of debt accumulation with its attendant problems such as foreclosure or bankruptcy.

Medical researchers have found a nexus between age-related decline in cognitive abilities even without the presence of disease and financial vulnerability. According to the authors, a first sign of cognitive aging is diminished financial capacity. Evidence of this diminution may be infrequent at first but become more noticeable through time. Eventually the bank may detect a suspicious transaction.

A 1981 report by the House Select Committee on Aging concluded that financial abuse was the second most prevalent form of elder abuse. The report also concluded that financial abuse often was paired with another type of abuse like psychological pressure.

Seniors can be prepared to mitigate the effects of financial abuse that is abetted by age-induced cognitive impairment.

The authors provide seven actions that seniors can take to help prevent financial abuse. They are:

Assign a trusted advisor to all financial accounts.
Have a durable financial power-of-attorney
Draw up a will
Be aware of current financial scams preying on the elderly.
Monitor your credit and identity
Hire a money manager
Think about hiring a financial account monitoring service.

You can find the complete paper on the website of the Federal Reserve Bank of Philadelphia’ Payment Card Center.

The authors of the discussion paper are Jeanne Rantezelas and Larry Santucci
1:08 PM

Social services beneficiaries in California are being advised that their EBT cards may not work for a 24-hour period in late June, because of a planned service interruption in order to work on the system.

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Social services beneficiaries in California are being advised that their EBT cards may not work for a 24-hour period in late June, because of a planned service interruption in order to work on the system.

California counties are advising beneficiaries of the CalFresh and CalWorks programs to prepare for the fact that their EBT access cards may not work for a 24-hour period from 11 pm June 23 through 11 pm on June 24 due to a planned service outage.

EBT debit card, which replaced food stamps, are used in the CalFresh program to purchase authorized food at retailers that have been permitted  by the government to accept the cards for payment. The cards are also used by participants of the CalWorks program to make cash withdrawals.

Because of the temporary service disruption, the customer service number listed on each EBT card will also be inoperable during the same 24-hour period as will be the state EBT website,

Beneficiaries of the two assistance programs are advised to food shop in advance of the system shutdown and to make any necessary cash withdrawals in advance.
1:13 PM

A smart device app solution for merchant processing of government nutrition payments, such as WIC.

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Nova Dia Group, a Texas-based developer of mobile-payment solutions, has announced that its Mobile Market family of products has been certified for electronic WIC transactions by Conduent, a leading EBT transaction processor.

The upshot of this certification is that retailers that use merchant processor WorldPay for their point-of-sale transaction processing and use the Mobile Market products wIll now be able to support electronic WIC as a tender type.

Mobile Market+ Select is billed as an mPOS solution for merchants who want a smart device solution as well as the ability to accept both types of EBT tender: SNAP and WIC.

According to NDG, its Mobile Market products can now provide merchants with a single POS solution to process the following types of tender: WIC, SNAP, credit, loyalty. The company claims the Mobile Market solution is the only smart device app that can process WIC, SNAP, and credit across all state lines for multi-state merchants.