Inside the chapter: Elder Financial Abuse: How a Bank Hold Can Stop It

In summary

This is part 2 of 2 of our guide to Protecting Older Adults From Financial Abuse. It picks up where Elder Financial Abuse: How to Protect Older Adults leaves off, and it is written to stand on its own: the key ideas are restated where you need them.

A 78-year-old asks her brokerage to wire $85,000 to a “custodial account” a caller said would protect her savings from a hacker. Because she named her daughter as trusted contact, the firm calls the daughter, places a Rule 2165 hold — 15 business days, about three weeks — and starts an internal review. The daughter reaches her mother, the “protection” story collapses, and the wire is canceled. Without the trusted contact and hold, the $85,000 would likely have reached the scammer within hours, where wire transfers are rarely recoverable. The $85,000 saved is $85,000 ÷ $38,500 ≈ 2.2 times the 2025 average loss for victims 60 and older, and even one prevented scam pays for every safeguard in this section many times over.

The safeguards above assume a brokerage client over 65, a stranger as the scammer, and a person able to accept help. Real cases often differ.

A trusted contact and a temporary hold work like a smoke detector wired to a neighbor’s phone: they don’t stop the fire from starting, but someone outside the house hears the alarm while there is still time to act.

Most of these protections must be set up before they are needed, while the person is well and can choose who they trust. A single family conversation — trusted contacts named, alerts on, a code word agreed, POA agents chosen with care — closes most of the routes that scammers and abusive insiders use.

When a parent turns 65, or sooner at the first sign of memory or judgment problems, set up four things within a month: a trusted contact on every brokerage and retirement account; alerts on every debit, or on balance drops beyond a set amount, sent to a second person, with view-only access; a durable POA naming either two agents who must act together or one agent plus a named person who receives copies of statements; and credit freezes. Never add a child as a joint owner to help pay bills; use the POA or a convenience-signer arrangement without survivorship. When any request to move more than one month’s spending arrives with urgency, secrecy or a new “friend,” pause 24 hours and talk to the trusted contact before sending. If money has already gone by wire, call the bank and file at ic3.gov the same day.

Assumptions: the parent has capacity and agrees; the family members chosen are trustworthy and not themselves the risk. Ignore it where the parent, with capacity, declines: the choice is theirs, and your tools narrow to staying in contact and reporting suspected exploitation to APS.

Adding one child as a joint owner “for convenience.” A widowed mother with three children adds the eldest to her $200,000 savings account so he can pay her bills; her will splits everything equally. While she lives, he can legally withdraw it all. If the account carries a right of survivorship, as many joint accounts do, it passes to him at her death outside the will, and his siblings’ expected shares of $200,000 ÷ 3 = $66,667 each fall to $0 unless he chooses to share. The account is also exposed to his creditors and divorce.

How to avoid it: give the helper authority, not ownership: a durable POA, or the bank’s convenience-signer or agent designation without survivorship, plus payable-on-death designations naming all three children equally.

Report it to Adult Protective Services in the state where the older person lives; the Eldercare Locator (1-800-677-1116) gives the local number. For fraud, call the National Elder Fraud Hotline at 833-372-8311 and file at ic3.gov, and tell the bank or brokerage at once so it can stop or recall transfers. Call 911 if anyone is in immediate danger.

Yes, but in states that adopted the Uniform Power of Attorney Act only on stated grounds. The bank must accept a notarized POA, or ask for a certification, translation or legal opinion, within about 7 business days, and may refuse if it has reported suspected exploitation to adult protective services in good faith. Signing the bank’s own form in advance avoids most disputes (12.2).