Signs a Bank May Have Failed to Protect an Elderly Customer

When an elderly person loses money to a scam, the first question is usually, “Who took it?” But in many cases, there is another question worth asking: “Who had the chance to stop it?”

Banks and financial institutions are often positioned to notice financial exploitation before families do. They may see large withdrawals, unusual wire transfers, sudden changes in account activity, or a new person accompanying an elderly customer to the branch. Federal regulators have warned financial institutions to watch for both financial and behavioral red flags of elder financial exploitation, including activity that does not match a customer’s typical banking habits.

That does not mean a bank is responsible every time an older customer is exploited. A scammer may manipulate someone privately. A transaction may appear ordinary on paper. A customer may insist that they want to send money, even when family members are worried. But when a bank has reason to suspect something was wrong and still processes suspicious transactions without appropriate review, documentation, escalation, or reporting, the bank’s conduct may deserve closer scrutiny.

In elder financial exploitation cases, the signs that matter most are often the ones hidden in the account history: the first unusual withdrawal, the second wire transfer, the internal alert, the teller note, the family member’s warning, or the decision not to escalate a transaction that should have raised concern.

If you believe that you or a loved one was exposed to a scam due to your bank’s negligence, contact Morgan & Morgan for a free and confidential case evaluation to learn more about your legal options.

Large Cash Withdrawals

One of the clearest warning signs of possible elder financial exploitation is a sudden pattern of large cash withdrawals.

Many older adults have stable financial habits. They may receive Social Security, pensions, retirement distributions, or investment income. They may pay regular bills, use checks or debit cards in predictable ways, and withdraw modest amounts of cash for ordinary expenses. When that pattern suddenly changes, it can be a sign that someone else is influencing, pressuring, or exploiting them.

Large cash withdrawals may be concerning when they are:

• Unusual for the customer
• Repeated over a short period
• Made under pressure or with someone else present
• Accompanied by confusion or nervousness
• Inconsistent with the customer’s usual needs
• Followed by more withdrawals after bank staff expressed concern
• Made despite prior warnings from family members or caregivers

FinCEN has identified sudden, frequent, or unexplained withdrawals as possible indicators of elder financial exploitation, especially when the activity is inconsistent with the customer’s history or when a caregiver, relative, or new acquaintance appears involved in the customer’s financial activity.

A single large withdrawal may not be enough to prove a bank failed to protect an elderly customer. People are allowed to use their own money. But if the bank saw repeated withdrawals that were dramatically different from years of normal activity, and employees had reason to believe the customer was confused, pressured, or being coached, the situation may require further investigation.

Multiple Wire Transfers

Wire transfers can be especially dangerous in elder scam cases because money may move quickly and become difficult to recover. Many scams pressure victims to send funds urgently, often by claiming that a loved one is in trouble, an account has been compromised, a government agency is investigating them, or an investment opportunity will disappear unless they act immediately.

Multiple wire transfers may suggest exploitation when they involve:

• New or unknown recipients
• Large dollar amounts
• Transfers to unfamiliar banks or foreign accounts
• Repeated transfers over days or weeks
• A customer who cannot clearly explain the purpose
• A customer who says someone told them not to discuss the transfer
• Transfers that drain savings, CDs, or retirement funds
• Wire activity that is inconsistent with the customer’s account history

FinCEN’s elder financial exploitation guidance describes scams involving money transfers to strangers or imposters and highlights red flags involving unusual account activity, changes in banking behavior, and transactions that do not align with the customer’s normal financial profile.

For banks, wire transfers are often more than routine paperwork. Depending on the circumstances, they may trigger fraud reviews, compliance checks, suspicious activity concerns, or internal escalation procedures. If a bank processed a series of unusual wire transfers from an elderly customer without meaningful review, that may be important evidence in a potential claim.

Changes in Banking Behavior

Elder financial exploitation often shows up as a change in behavior before it becomes obvious as a theft.

A customer who rarely visits the branch may suddenly come in repeatedly. Someone who has never wired money may begin sending large transfers. A person who previously handled banking independently may arrive with a new “friend,” caregiver, or relative who answers questions for them. A customer may seem anxious, confused, unusually secretive, or unable to explain why they need the money.

Behavioral red flags may include:

• The customer appears fearful, confused, or submissive
• Someone else speaks for the customer
• A companion refuses to let the customer speak privately
• The customer seems coached on what to say
• The customer gives vague or inconsistent explanations
• The customer says the transaction is urgent but cannot explain why
• The customer suddenly changes beneficiaries, account access, or mailing addresses
• The customer seems unaware of recent transactions

Federal guidance recognizes that elder financial exploitation may involve both transactional warning signs and behavioral warning signs observed by bank employees. The 2024 interagency statement on elder financial exploitation notes that financial institutions may consider employee training, transaction monitoring, internal controls, escalation procedures, and other tools to identify and respond to suspected exploitation.

These details matter because bank liability may depend not just on what transactions occurred, but on what employees saw, heard, documented, or ignored. If a teller, branch manager, fraud analyst, or customer service representative observed signs of coercion or confusion, that may change how the bank’s conduct is evaluated.

Internal Fraud Alerts

In many potential bank negligence cases, one of the most important questions is whether the bank’s own systems flagged the activity.

Banks often use fraud monitoring, transaction alerts, internal review processes, suspicious activity protocols, and escalation systems. These systems may identify unusual withdrawals, wire transfers, account changes, or activity that does not fit a customer’s profile. The existence of an internal alert does not automatically prove wrongdoing. But if the alert was ignored, cleared without adequate review, or overridden despite obvious risk, it may support a claim.

Internal records may show:

• Fraud alerts generated by transaction-monitoring systems
• Notes from tellers or branch employees
• Warnings entered by customer service representatives
• Calls from family members reporting suspected exploitation
• Prior suspicious activity reviews
• Wire transfer holds or release decisions
• Escalation notes to fraud or compliance teams
• Reasons a suspicious transaction was approved
• Whether the bank considered filing a Suspicious Activity Report

Financial institutions may be required to file Suspicious Activity Reports when certain reporting thresholds and suspicion standards are met, and FinCEN has encouraged institutions to include elder financial exploitation red flags in SAR narratives when applicable.

Families usually do not have access to these internal records at the beginning of a case. That is one reason an attorney’s investigation can matter. Bank records, branch surveillance, call recordings, fraud notes, and internal communications may help show whether the institution recognized the risk and what it did next.

Documentation That May Support a Claim

Elder financial exploitation cases often turn on documentation. The more clearly a family can reconstruct what happened, the easier it may be to determine whether the bank failed to act reasonably.

Important documents may include:

• Bank statements
• Wire transfer forms
• Withdrawal slips
• Canceled checks
• Receipts for cashier’s checks or money orders
• Text messages with scammers or suspected exploiters
• Emails, letters, and voicemails
• Power of attorney documents
• Account change forms
• Police reports
• Adult Protective Services reports
• Notes from conversations with bank employees
• Names of bank employees involved
• Dates and times of branch visits or phone calls
• Medical or cognitive records, when relevant
• Prior warnings given to the bank

Families should also preserve a timeline. When did the unusual activity begin? Who was with the elderly customer? When did relatives discover the transactions? When was the bank notified? Did the bank promise to investigate? Did suspicious transactions continue after the warning?

The Office of the Comptroller of the Currency advises people who suspect elder financial exploitation to notify the older adult’s bank and report the matter to appropriate authorities, including the FTC, the DOJ National Elder Fraud Hotline, and other agencies depending on the situation. The CFPB also recommends reporting suspected elder financial abuse to Adult Protective Services.

Documentation matters not only for reporting the scam, but for evaluating whether the bank failed to protect the customer. A bank may claim it had no reason to suspect exploitation. Records may show otherwise.

Should Bank Employees Intervene?

Bank employees are not expected to act as doctors, detectives, or family guardians. But they may be expected to follow the law, comply with internal policies, escalate suspicious activity, and respond reasonably when an elderly customer appears to be at risk.

Intervention does not always mean refusing a transaction. Depending on the state, the bank’s policies, and the facts, appropriate action may include asking additional questions, speaking with the customer privately, escalating the transaction to a supervisor, contacting a fraud department, filing a report, delaying a transaction where allowed, or notifying Adult Protective Services or law enforcement.

The Senior Safe Act provides certain financial institutions and eligible employees with immunity for reporting suspected senior exploitation in good faith and with reasonable care when the law’s training and other requirements are met. Some states also have temporary hold laws that allow financial institutions, broker-dealers, or investment advisers to delay transactions when there is reasonable suspicion of elder financial exploitation.

These protections are important because they recognize a practical reality: sometimes the safest thing a financial institution can do is slow down a suspicious transaction long enough for someone to investigate.

When a Bank’s Failure May Matter

A bank’s failure may matter when there were clear warning signs and the institution did not take reasonable steps to respond. This may include ignoring unusual activity, failing to follow internal procedures, dismissing family warnings, clearing fraud alerts without adequate review, or continuing to process suspicious transactions after employees had reason to suspect exploitation.

Potential negligence may be especially concerning when:

• The elderly customer had a long history of conservative banking
• The suspicious activity was sudden and dramatic
• Multiple employees observed red flags
• The bank received warnings from family members or caregivers
• Internal fraud alerts were triggered
• The customer appeared confused, afraid, or coached
• Large sums were transferred to unknown recipients
• The bank failed to document why transactions were approved
• The same pattern continued after concerns were raised

These cases are fact-specific. A successful claim may require account records, internal bank documents, witness testimony, expert analysis, and a close review of state and federal rules. But families should not assume that a bank had no responsibility simply because the customer technically authorized a transaction.

In elder scam cases, authorization is not always the end of the story. If the bank saw warning signs of manipulation, coercion, confusion, or financial abuse and failed to act, the institution’s role may need to be investigated.

What are red flags banks should notice?

Banks may be expected to notice red flags such as sudden large withdrawals, repeated wire transfers, unusual account closures, liquidation of CDs or retirement funds, new people accompanying an elderly customer, unexplained changes in banking behavior, or a customer who appears confused, fearful, pressured, or coached. 

Other warning signs may include transactions that do not match the customer’s history, efforts by another person to control the conversation, or a customer’s inability to explain why money is being moved. A single red flag may not prove that a bank failed to protect an elderly customer, but several red flags together may suggest the bank should have escalated the matter, reviewed the transaction more closely, or followed its elder financial exploitation procedures.

Do banks monitor unusual activity?

Banks generally use systems and procedures to monitor certain types of unusual or suspicious activity. These may include fraud alerts, transaction-monitoring systems, compliance reviews, branch-level escalation procedures, and suspicious activity reporting protocols. In elder financial exploitation cases, those systems may matter because they can show whether the bank recognized that activity was unusual. 

For example, if an elderly customer who rarely moved large sums suddenly began sending repeated wire transfers to unfamiliar recipients, the bank’s systems may have flagged the activity. Whether the bank responded appropriately depends on the facts, applicable law, internal policies, and what employees knew at the time.

Can repeated withdrawals indicate exploitation?

Yes, repeated withdrawals can indicate exploitation, especially when they are large, unusual, unexplained, or inconsistent with the customer’s normal banking history. Repeated cash withdrawals may suggest that an elderly customer is being pressured by a scammer, caregiver, relative, or other person. 

They may also be concerning if the customer appears nervous, confused, secretive, or accompanied by someone who speaks for them. Not every repeated withdrawal is suspicious, and older adults have the right to use their own money. But when the pattern is sudden, significant, and paired with other red flags, it may support further investigation into whether the bank should have intervened.

Should bank employees intervene?

Bank employees may need to intervene when they observe signs of elder financial exploitation, but the appropriate response depends on the situation and the law in that state. Intervention may involve asking questions, speaking with the customer privately, escalating the matter to a supervisor, contacting the bank’s fraud department, delaying a transaction if allowed, or reporting suspected exploitation to the proper authorities. 

Some laws protect financial institutions and employees who report suspected senior exploitation in good faith and with reasonable care. Bank employees are not expected to prevent every scam, but they may be expected to follow internal policies and respond reasonably when clear warning signs are present.

What should families document?

Families should document everything they can about the suspected exploitation and the bank’s response. This may include bank statements, withdrawal slips, wire transfer records, canceled checks, cashier’s check receipts, emails, texts, voicemails, police reports, Adult Protective Services reports, and notes from conversations with bank employees. They should record dates, times, employee names, branch locations, and what was said. 

Families should also preserve evidence showing when the bank was warned and whether suspicious transactions continued afterward. This documentation can help an attorney determine whether the bank missed red flags, ignored warnings, failed to follow its own policies, or violated applicable elder financial protection laws.