An elderly customer came to the bank today and told us that her daughter in law had taken out a loan in her name and the payments are coming out of her account. We provided her with information on contacting the credit bureaus, closing her account, disputing the payments, etc. and she refused it all because she doesn't want to press charges or upset her son. She said she'd rather continue to pay the payments than cause her son stress. (Turns out he just recently had bypass surgery and very nearly died.) Now we are looking for opinions as to what others would do in this situation. For what it's worth I say close the account but management wants me to ask what others. Any responses are greatly appreciated.

It's not only elder financial abuse, but also identity theft and defrauding an insured depository institution. If the amount is more than $5,000 do you see where I am going with this?

What's to stop DIL from doing more loans or credit cards, now that she has her feet wet?

So far it's under the $5,000.00 filing limit but I am worried that there will be more loans or other fraud coming up since there are no consequences for the daughter in law. Our customer did not want to acknowledge that as a possibility though.

Do you have an Adult Protective Services in your state? If so, what are the laws about reporting Elder Financial Abuse? In many states, not only would you be required to notify APS, you would be in violation of state law if you didn't.

We are one of the very few states where it is not required to report. I have referred other cases to the county but management does not want this referred since it would cause problems in the customer's family. I'm not sure I agree with that decision.

I take it you only have the deposit account and the loan is elsewhere?

If so, consider that since the daughter-in-law had sufficient information to establish a loan in your customer's name and initiate payments form her account, that means she also has enough information to fully take over the account. If your customer is not using Internet banking or bill payment, and has no intentions to use them, put whatever blocks you can to keep a profile from being established in her name. If your customer is an Internet banking user, review her recent sessions to ensure they are legitimate.

Also, even if your customer does not want to take any action against her DIL, you might still encourage her to put a freeze on her credit profile. This will at least provide her a layer of protection without calling anyone out.

Here's a thought - ask your elderly customer if she will open another account and transfer the majority of funds to that account so that the payments cannot continue through the first account but simply be returned for non-sufficient funds. Ask her if she will agree to set up blocks on the new account to prevent any outside access.

ETA: It's situations such as this that has caused most states to pass the Elder Financial Abuse laws because they recognize that families will put pressure on elderly relatives to keep quiet about the abuse. The fact that this customer, AND MANAGEMENT, want to keep things quiet is a symptom of this moral sickness. The only way to stop the abuse is to make reporting mandatory and put someone on the hook for reporting.

It is a sad state of affairs when we have to get the government involved in private matters, but that is what happens when people allow bullies to get away with things, and then the bullies get emboldened and create more abuse.

I'm with JacPCB. Your customer at least needs to guard against any more unauthorized loans. She needs to keep her banking info away from her DIL too.

JacPCB, the loan was opened elsewhere. There is no internet access to the deposit account. The customer refused to contact the credit bureaus or do anything else. So the way I see it, at this point our only course of action is to ignore the whole thing and hope it gets better or close the account and send the customer elsewhere. I am the only one here voting for the second option.

Banks hold the patent on hoping problems just go away...

I'm not inclined to tell the elderly how to handle their thieving relations, but it would be wise to at least reduce the situation to writing, particularly if MIL has more than one child. That child may think you should have done something about the fraud.

Write MIL a letter and say "Here's what happened based on what you have told us. We are not going to report it to law enforcement because you asked us not to." (That statement has nothing to do with filing a SAR or complying with any mandatory requirement to report the abuse to the state.)

I would probably word the letter a bit stronger:
"Normally the Bank would report such an unauthorized access to law enforcement, however you have expressed a strong desire that we not take such action as you feel it would have an adverse affect on your family. Because you have requested that the bank not take any action to prevent these withdrawals, we must now consider all of the past and any future withdrawals from your account, for the purposes of repayment of the identified loan to be authorized by you."

I recommend that you have legal counsel review the correspondence before sending. If the bank does not want to pay for that, then you can go with your first recommendation to close the account. If management refuses to do either, then I suggest you write a memo to Bank management as well as report to Audit Committee this situation, the customer's response, and your recommendations.

Take steps to make sure there never is. Put whatever mechanism you can in place to ensure that nobody (i.e. DIL) can enroll your customer's account for Internet banking/bill pay. You've been put on notice that your customer's identity has been stolen and that the thief has your customer's account information. This is an appropriate response to the Red Flag (#26, for those keeping score at home) that you have identified.

I also agree with the other posters that a written follow-up is wise. Your customer has apparently chosen to ratify the past loan payments and authorize the future payments. It will serve the bank well to memorialize this conversation in writing.

Thank you for all your responses.