Elder fraud is a growing concern in the U.S.—with seniors losing an estimated $4.9 billion to scams in 2024, a 43% increase from the prior year. To help combat this, a growing number of states are adopting legislation that allows banks and credit unions to reach out to a customer’s “trusted contact” when suspicious activity arises.
While this tool can be highly effective in stopping scams quickly, it also introduces challenges in balancing privacy, family dynamics, and customer trust.
In a new American Banker article on this issue, Rolland Johannsen, Senior Associate at Capital Performance Group, emphasized both the opportunity and responsibility for banks. He noted that proactive fraud protection is not only critical for safeguarding seniors but also a way for institutions to differentiate themselves competitively:
“Banks could and should use this as part of their way to attract and retain this very important market segment. To me, it’s a competitive differentiation to be able to create very robust, effective and proactive ways to deal with scams directed at seniors.”
Johannsen also advised banks to frame the conversation carefully—highlighting the sophistication of modern scams rather than a customer’s vulnerability—and to establish trusted contact relationships well before fraud is suspected.
The takeaway: trusted contacts can be a powerful addition to banks’ fraud-prevention toolbox, but success depends on thoughtful implementation, early communication, and careful handling of sensitive situations.
Read the article on American Banker (subscription required).
